Monday, May 22, 2006

Health insurance...a crock.

Now before you try to skewer me for saying that, let me outline why.

Let's take a hypothetical scenario of a young couple about to have a baby.  Let's say that the husband gets insurance through work.  Let's also say that he has a small contribution for himself like say around $50 per month but to add his wife to the plan he has to pay something like $400 per month for the premium.  This is not an abnormal situation.

The average deductible for such a plan is around $1,500 to $2,500.  Let's compromise and go with $2,000.  Let's also factor in a co-insurance of %20.  Let's also not forget the out of pocket max, which is on average of about $6,000 now.  So let's do some really simple figures..

Average uncomplicated delivery of a healthy baby with healthy mother will run a hospital bill of about $12,000.  First you meet the deductible, so you are paying up front about $2,000 at least.  Then your co-insurance kicks in and you "only" have to pay the co-insurance until your out of pocket max is reached.  That's going to be another $2,000 that you'll have to pay before full coverage.  Now, let's factor in the $400 per month premium over a year.  You are now up to $8,800 you'd have to pay.  The out of pocket max, mind you, doesn't apply to your premium.  What's this?  A family premium?  Those run for around $600 per month, suddenly you've accrued $11,200 over the year...  This means that out of $12,000 in medical expenses, it's quite possible that having insurance that you pay out the nose for will have only saved you around $800.  Fine deal indeed.... *rolls eyes*


Anonymous Anonymous said...

The situation you describe here is absurd and abnormal. $400 per month?

Maybe it's just in premium states like Californianized Colorado?

I would consider looking for a new insurance provider outside of the job.
Or ask the current provider about getting in on a group policy.

It seems to me that the health care providers are the ones gouging young families.

11:40 AM  
Blogger Ardor said...

You would be very surprised actually to see how common this is.

8:20 PM  

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