Man who is born of woman is of few days and full of trouble. Job 14:1
The first items on the budget are living expenses. If you’re in good health, health care may not be your first consideration, but without it, your days may be fewer and filled with more trouble. I chose this as the first living expense because many are having a hard time fitting it into their budgets, and everyone will probably have some tweaking to do. But is healthcare affordable? What happened?
Health insurance is not true insurance
Through most of the first half of the 20th century, medical costs were cash and carry. The patient went to the doctor or pharmacy and paid for services or medicines on their way out; or in the case of house calls, on the doctor’s way out. Those who couldn’t pay were allowed to pay on time by the provider, and many doctors extended charity to poor people. Then unions started negotiating for health insurance coverage, and big businesses that could operate with large pools of employees saw the benefit, since they could get insurance at lower costs.
Insurance—true insurance—covers risk only. You never want to actually file a claim. Who wants to see his house burn down so he can put in a claim on his fire insurance? The insurance company doesn’t want to pay claims. It’s a win-win situation. But with the business sponsored health insurance, it became more of a maintenance program where you paid during years of good health without filing a claim so you could claim as much as you needed in later years. The influx of new workers could pick up the tab.
When the greatest generation came back from WWII they got to work, building the American dream, and then celebrated by having a lot of babies. Everything was going fine until those babies got older and started claiming more health care than the new workers could carry.
The insurance companies started negotiating with providers to agree to lower fees and at the same time started increasing premiums over the inflation rate.
This got the attention of politicians who are always looking out for our interests—especially when they want our vote. On top of this, the people unable to pay health insurance increased. Sometime in the 70s or 80s Congress passed a law that emergency rooms would have to take anyone regardless of the ability to pay. Hospital costs went through the roof. In the meantime, health insurance companies kept increasing premiums and decreasing the amount they’d pay providers.
Enter the Affordable Care Act—a wonderful premise. If the pool of insured covered the entire country, there’d be enough young, healthy people to take care of the old, sick people, with any condition. Why, there’d be enough to cover kids on their parents’ policies until the kids were 26. This was a wonderful premise for the insurance companies, they’d increase their member pools. Providers loved it because, on theory, there’d be enough money to pay what they were worth. Businesses would love it because prices would stabilize. People would love it because it would cover everyone at a lower cost.
Writing has taught me a lot about premises. They never work out as intended. This makes fiction writing fun, but it doesn’t work out like that in real life.
For two years, politicians screamed at each. But don’t they do that about everything? And the act didn’t actually go into effect until after elections.
Everyone in the pool???
I don’t know how the ACA works, and those who claim to know are probably overestimating their knowledge. Even the bureaucrats writing the rules don’t know because they’re still writing the rules. All I know for sure is it will all work out—or it won’t. But even if it doesn’t, that leaves us where we should have been all along—accountable for how we spend our healthcare dollars. You’ve heard that we reap what we sow, but it’s equally true we can’t reap what we don’t sow. We’re in this mess because we’ve failed to concern ourselves with healthcare costs.
Most were like me. After I got health care insurance, I stood back and let them take care of the cost. I got these bills I couldn’t understand, and after some grumbling, I’d pay the balances not covered by insurance and tossed the bills into the shredder.
Next time I’ll explain my wake-up call, and it came before the ACA. Below is a sample of the monthly budgeted costs for healthcare for a family of four using the gold plan provided by my rather unhappy assistant. No, there are no typos.
Monthly Healthcare Expense
- Insurance Premium $1,006.00
- Out of Pocket* 300.00
- Drugs 60.00
- Dental 60.00
- Eye Care 30.00
- OTC 25.00
- Gym 40.00
*This includes co-pays and deductibles, plus saving for max out of pocket. For this policy it’s $6,000 for medical and $12,000 for drugs. Pray you won’t need that much until you reach these totals.
Next week I’ll be examining these costs to see how they can be reduced. I’m always looking for ways to reduce costs. If you have any ideas, please share them.