I was home with my family last week. That meant a lot of time at the playground, a lot of reading Seuss and then once the kids were slightly more exhausted than I was, grown-up task time. The first three days was cleaning up the basement tool room. It is no longer an eligible Super Fund site. The other major task was doing last year’s tax return and talking through the family budget with my wife for 2017. Yes, very exciting stuff.
The start of the process was box 12-DD on my W-2. This was how much of the family’s health insurance cost. It was significantly under the Cadillac line and 3% more than last year. We spent some more this year as my wife had a surgery but even with that surgery, we were a net profit center for my former employer. The family’s individual medical loss ratio was under 75% of the total premium.
My family had three distinctive utilization patterns that are fairly common. My daughter and I are part of the 50% of the population that uses 3% of medical resources. We each had a well visit, a flu shot and no other interactions with a billable service. I had a couple boxes of mint and honey tea for sniffles and a box of Claritin for allergies. My daughter had ice cream several times for psychological placebo effects. This utilization pattern is common and it means that basically any system of reform won’t matter to us if we repeat the same pattern next year.
My son had a well child PCP visit, a few vaccines, a flu shot, and a pair of sick child PCP visits for a nasty rash and a nasty case of daycare crud that turned out to be nothing. He also has successfully been able to control his asthma with the combination of a brand name preventative inhaler and emergency generic nebulizer tubes. The nebulizer tubes cost $5 every six to nine months. Without the inhaler, his total spend would be under $600 for the year. With the inhaler, he probably costs $1,500 for the year. At this point healthcare reform could touch matter as he has a low level chronic condition that we hope he will outgrow at some point.
My wife is usually healthy. She normally has a utilization pattern that looks a lot like mine. This year she had a one-off event of a surgery. We have fairly high actuarial value insurance so the insurer paid some for most of it and we paid for some of it. In 2016, my wife was around the 75th percentile in healthcare costs. In 2015, she was in the 15th percentile. And we hope that she’ll be down in the 30th percentile in 2017 (I need to bug her to get her well visit in every year) As a one time event, health care reform of any sort would hit us to some degree as the push towards lower actuarial value plans with more cost sharing would have made this surgery more expensive.
My family’s utilization patterns are why health finance reform is so difficult. We have protection from “get hit by a meteor” events including getting old, and other than that, we don’t touch the system too much. Even in a high cost year like 2016, we are net contributors to the pool that pays for people who got hit by a bus or who have long term chronic conditions. Since this is what I do for a living, I’m more than fine with that, but this is where people scream that why should they pay for XYZ when they’ll never need XYZ (or until they need Z). There are far more no and low utilizers than super utilizers but that is common in every form of insurance.
Baud
We appreciate your subsidy.
rikyrah
I really appreciate it when you use the simple to explain the complex, Mayhew.
WereBear
You make things make sense!
gvg
I went without insurance in my 20’s as restaurants don’t offer much and what they do offer is a rip off (blue cross bad experience). I didn’t really get sick except colds. Then I went back to college and got hired by the University and got state insurance. for 20 years I was a low users as I still didn’t really get sick. I had some allergies and colds, once pneumonia with a nebulizer, maybe that cost something to the insurance company but probably not much. Then I got cancer. Surgery and months of chemo and now check ups every 3 months, no end even mentioned but it’s been 3 years. It can happen to anybody. When I told my coworkers, I was surprised and kind of alarmed at how many opened up about their cancers. I had never known how many people I knew, had had it. sometimes it was decades before they worked with me, sometimes they just didn’t tell anyone who hadn’t had it but opened up to encourage me. Serious illnesses happen alot. Many people are just rather private about this kind of thing. People should not assume they don’t need the coverage and those fools who whine about not getting what they spent back are overlooking the future. They haven’t got it all back YET but one big illness tomorrow and they could need more than they have put in yet.
Ruckus
@gvg:
I think this is a lot more common than understood. My sister was uninsured because of costs and preexisting conditions and got cancer. This was pre ACA. Because she had no insurance she was unable to get checked out regularly, by the time she was seen it was too late. It took a bit of time but it killed her. This is what the people who complain about the cost never consider, that an event can/will cost them far more than they can ever imagine and in ways that they can’t comprehend. Now I understand about being young and getting paid crap wages and not being insurable under the old system and just going on until you can’t. It’s called normal in our pre ACA lives. If every employer had to provide insurance, that might be one thing, but of course they don’t, that would cost too much.
And of course assholes like the “freedom caucus” aren’t interested in freedom, they are interested in low/no taxes because that for them has to be better. They have jobs, health insurance, stability….. and an all burning stupidity that everyone is or should be like them.
I have no answers, David provides those.
wenchacha
Thanks for all you do to explain health insurance in a simple, clear manner.
I’m curious about the comments made on CNN (I think) over the weekend. A group of voters weighed in on Trump’s efforts so far. When they spoke of ACA, an older man said his wife was on chemo when ACA kicked in, and now the premiums are $1200/mo? I may be misrepresenting.
I know so much depends on the state, and there are other variables. I just wish when somebody reports such a giant bump in premium costs, we simple viewers could get an idea of what actually was going on. People couldn’t always keep the insurance they had that made them happy, because in many cases, the insurance was shitty, right?
Another show I watched, same thing: “my premiums went up by XXX%!” No clear explanation of how and why, of course. It serves mainly to scare the public.
People get upset about change, especially when it costs money. I wish America was smart enough to be able to look at competing plans (as if) and make informed decisions.
StringOnAStick
My husband has been considering becoming a contractor for his company so he can work 3-4 days/week; what they offer as part-time is a 32 hour week with no benefits so contracting at a much higher rate is the better choice. I just got a general quote of between $1021 and $3111 for the both of us per month from a health insurance broker that I met at a health initiative meeting last week (e.g., not the typical conservative broker, he’s an ACA fan since it saved his life). And that’s for this year, where prices are stable, who knows what the hell is happening right now as insurance companies try to read the tea leaves coming from the shitgibbon and his crew plus the congressional wrecking crew.
Looks like becoming a contractor is something my husband will have to put on hold.
pseudonymous in nc
@wenchacha:
Nobody is smart enough. That’s why actual healthcare systems take that stuff out of the reckoning. I wish that the competition was all in the margins, like the Euro-insurers where the choices are “fancier hospital room” or “discounted gym membership.”
Per capita spends are a useful view from the other side: even if you high-ball the OECD averages, the US could probably have universal healthcare at $5000 per person per year. That’s a lot of money, but it’s doable.
rebmarks
WE are why it is so important to have insurance no matter what — because no one thinks it is going to happen to them. My husband had a catastrophic motorcycle accident (minding his own business, hit head-on on his side of the road) which landed him in intensive care for a week, critical care for 3 weeks, in-patient rehab for an additional 4 months, home care for an additional 5 months, and then outpatient care 3 days a week for another six months or so. After about a year I asked the insurance company how much he had cost them, and they told me that he had just reached the ONE MILLION DOLLAR mark. Luckily he had a good plan through his work, but which we had to pay for through COBRA because of course he lost his job. This was before ACA. I made sure that even if we couldn’t pay the electric bill, we always paid the insurance premiums. I say premiums, because at the time we were not married yet, and I had my own COBRA payments to make. A few days after his accident, I discovered a lump in my breast — breast cancer — and had to have a lumpectomy and radiation while he was still an in-patient. I don’t know what that cost — I never asked. Our premiums for two single adults together cost about $1500 per month, and that was 12 years ago.