The Cost Of American Health Care: A Personal Story Without The Spin

I’m one of the lucky ones: I have the skills, time and resources to analyze the situation and find the best choice for my family. I’m also lucky that I make enough money to afford the ever higher costs to insure my family. But what happens if the luck runs out?

I’ve heard a lot of talk in the media lately about the Affordable Care Act (or Obamacare), and whether they’re for or against it, this is what some of the talking heads have said:

“Now that everybody can get health insurance, people are no longer forced to work a job they hate just for the insurance.” (This is either great news, or terrible news, depending on your ideology.)

“Obamacare is making health insurance more affordable for everyone.”

“It’s true that some people lost their existing coverage, but those were only people on the cheapest, particularly low-quality plans who really should’ve been upgraded anyway. Now they’ll get better coverage for the same price, or only a fraction more”

…and so on.

The problem is, I need a lozenge from all the yelling I’ve done at the TV as I keep hearing these statements, which, I am here to tell you, are demonstrably false. Granted, my family is a data point of one, but still, I’m not particularly unusual, so I have to assume there are many more families out there bumping up against the same reality.

I’ve worked at the same small company for over a decade making a good middle/upper-middle class wage and, while I used to be covered under the health insurance plan they offered me, when my wife quit her job (which gave her health insurance) to stay home with our new son, I had to consider what the cheapest option was to cover all 3 of us. My company’s health insurance coverage was the obvious choice, since it was great for me alone, but I soon discovered that if I added my wife and child, my company wouldn’t pay anything at all for them. In fact, it would cost me somewhere in the neighborhood of $15k more per year (I don’t have the exact number in front of me – it was probably quite a bit more than that). They tell me this is because it’s a small company that couldn’t get a discount from the insurance companies by buying a large number of plans at a time, and the local Chamber of Commerce wasn’t any help in lowering our rates either. To make matters worse, I was warned that however high it is this year, it is sure to continue to increase each year, significantly faster than the rate of inflation.

So rather than coughing up that crazy amount of money every year to cover 2 more people (when all three of us were the picture of health, and never saw a doctor beyond routine visits), we embarked on a search for alternative healthcare options. We were shocked at how much work was involved. We had to make multiple calls to multiple companies, multiple times. Then we had to fill out tons of forms over and over again, all slightly different for each company we talked to, and then we had to email or fax or mail (different for each company) the paperwork back, and then work the phones some more. Of course, they also insisted we get a physical to prove we’re healthy. Then, even after we got info about each potential plan from each potential company, we had to come up with some way to compare them, to see which made more sense to us: Which was a better return on investment/value for money, and did it change if we insured one of us at one place and another of us at another place? And how to do we compare one list of features for one price with a different list of features offered under a totally different price structure somewhere else?!? It made our heads spin, but after lots of number crunching with big tables in Microsoft Excel, we managed to settle on the best scenario: I and my new son would go on one plan, and my wife would go on a different plan.

That was back in 2010, and we ended up paying a total of $445.87/month or $5,350.44/year to insure the 3 of us. We paid for ALL medical visits out of pocket up to $2,500 per individual, and then after that our insurance would start to help. We spent a bit over $1,000 in out-of-pocket deductible payments each year, so basically, our insurance was costing us about $6,400 per year. I was saving thousands per year over what it would cost to get insurance through work (even with myself fully covered there), and since we rarely needed medical care, we’d quickly save more than enough to cover the high deductibles, and could use the insurance in a catastrophic emergency. I figured that wasn’t too bad for 3 people (one of which was a baby). I patted myself on the back and commenced paying for essentially all of my own medical bills.

Then the ACA/Obamacare kicked in, and so late last year my wife and I each received a letter from each of our insurance companies telling us that our plans were being cancelled and we’d have to either find a new plan somewhere else, or pay significantly more to be insured under the new policies that they decided we should have. So once again, it was time to dust off the old spreadsheets and get to work. BUT WAIT! Now we have healthcare.gov to help us!

Not so fast. It turns out that the people who made this website appreciated the need to give people info, but then turned off their brains, and didn’t wonder what it would be like to have to actually take in and process and thoughtfully consider it all. So there was no way to compare the same specs of each plan. It would’ve been nice if they had a large table with plans and specs, which allowed you to easily compare two plans to each other, or, in our case, all 21 plans that it told us we could get! But instead, it just gave us a list under each of the plans, and the lists weren’t listing the same stuff!!! To make matters worse, when we called around, we found that some plans weren’t even listed on the site. So once again, we had to resort to spending hours amassing and crunching data. You know, just the thing the average non-geeky person with a million other important things going on in their life wants to do! It’s not bad enough we have to spend hours each year figuring out how much we owe in taxes (and pay penalties if we get it wrong), but now we also have to spend days crunching health insurance numbers. Isn’t America great?!?

This time we landed on putting all 3 of us on a single plan. We’ll now pay $7,434 per year for $6,300 deductible per person!

That’s an increase in our annual health insurance costs of $2,084. Meanwhile, our deductibles increased from $2,500 to $6,300! So we’re paying thousands more per year for the cheapest coverage we could find *and* paying thousands more ($3,800 per person) when we need to use the insurance.

So, tell me again how insurance is more affordable now, or how I’m not forced to work just to pay for insurance…. From what I’m seeing, the costs are much higher now than ever. That money has to come from somewhere – and my employer certainly isn’t coughing it up! For a healthy family like us, it almost makes more financial sense to go without insurance and put the money you’re saving into the bank for when you have a big medical bill.

Unfortunately, putting a little money aside each month is not an option for millions of Americans. Wouldn’t it be nice if we lived in a country that sees the wisdom and value of a taking care of all of its citizens with a single-payer health care system? If only we could be so lucky.

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