Health Insurance. A Dangerous Game to Play or A Huge Gamble Without It?
Have you ever wanted to change something in the American culture? Have you ever felt so passionate about something that needed changing and are incredibly frustrated by it? We have… and it’s completely related to Health Insurance.
There are certain limitations, ahem…many limitations in our country and one of the most daunting is Health Insurance. The question I like to ask is, how is it that we have a company (Space X) actively pursuing transporting humans to Mars and reusing rockets, but we have Americans in our country struggling to afford both their health premiums and out of pocket expenses for necessary medical procedures?
Is this some sick form of population control? I’ve blogged about the state of Americans’ health and how much of it correlates with the lack of time these days with employer demands, kids, and life in general. Technology has also created a society of “always connected” voiding availability for down time.
Health Premiums and Deductibles
It’s no secret that the cost of healthcare is astronomical in our country. I recently read a post online about husband and wife who gave birth to a child (2 years ago) who have health insurance, but are STILL making payments to the hospital stay for their child. Their child was sick and spent about 5 extra weeks in the NICU. The part of their story most alarming…they met their original deductible which was something around $3k. Once the deductible was met, insurance would cover 80% of expenses. Here’s what happened though. Because the child was sick and the insurance benefits would only cover the routine care, the 5 weeks of NICU care resulted in these parents having to cover the full cost as their deductible shot up to $10k!
Are you kidding me? Why? Why is this ok? Truthfully, it isn’t, but who’s going to stop it from happening? Our Government? They cannot figure out how to play nicely in the sandbox at the moment, which leaves insurance companies to do what they want, when they want, and how they want. Not that I would want the government to intervene necessarily, because I will admit our healthcare is leaps and bounds better than our neighbors in Canada, but not as cost effective as our neighbors over the pond in Europe.
Are you upset yet? Has something similar happened to you as the above? What do we do about it?
Health Insurance isn’t a ‘broken’ system, but more of a ‘flawed’ one.
Recently, we did the math on our payments to our health insurance that is deducted from our bi-weekly paycheck. Back in 2011, I suffered a torn ACL and meniscus in my left knee that required arthroscopic surgery. After meeting our $2400 deductible, our insurance would step in and cover 80%. Great right? It did, and I didn’t have any complications, fortunately. Unfortunately, I still had something like $3k to cover that insurance wouldn’t. Happily, this is behind me now.
As I am typing this post, I am simultaneously knocking on wood, not that I am superstitious, but maybe a little ‘stitious’ (any The Office fans?).
Since my torn ACL and reconstructive surgery 8 years ago, I’ve not needed to rely on my health insurance as I’ve maintained my health outside of seasonal colds, etc. Here’s the issue, I’ve made required contributions to our health insurance from each paycheck consistently over the last 8 years without needing one cent. That means that someone at this health insurance company is sitting in some ivory office somewhere just counting cash…passively.
No big deal, right? HELL YES it is! Essentially, we have health insurance for catastrophic purposes right? Essentially meaning all insurance regardless of the classification exists for what MIGHT happen, since in life there aren’t any guarantees.
A Honest Proposition On How to Improve Health Insurance
So here’s the math. Over 8 years time, I paid in $52,000 to health insurance to be a glorified member on the premise that they will step in for their 80% after deductibles for what MIGHT or COULD happen.
Here’s my proposition. Could we not have an individually based Medical IRA type of account that is tied directly to our health insurance that is transferable between employers which we fund exactly as we do from our paychecks currently? No, I am not talking about a HRA/HSA or FSA which is similar, but in most cases those funds ‘expire’ if you don’t use them (FSA) or are capped to a certain amount (HSA/HRA). HSA Info Which is another blog post for a different day.
What I am talking about is an account that operates similarly to an employer based 401k/IRA that we can build ourselves and withdraw money from when ‘catastrophe’ strikes? Essentially, that $52k I’ve paid in becomes someone’s passive income or in reality covers the cost of someone else. Why couldn’t I have access to these funds I’ve paid in if I have a large deductible or serious health condition rendering me disabled from working to pay for the care I need?
My wife and I would consider ourselves very healthy 30 somethings who diligently take care of our health. We do what we can to make healthy choices, exercise, eat well, etc. We live in a society where we setup processes to put out fires instead of preventing them from starting to begin with. Americans are sicker now more than ever and there’s quite of bit of it that can be avoided.
Medical IRA/Self-Funded Medical IRA/Employer Matching Medical 401k
Regardless of what you call it, would you fund one if it were an option? Would you sleep better at night knowing that even if you have a massive deductible to meet, you would have an account you actively funded being a fulltime employee that could be used to supplement medical costs? There are plans like the Self Directed 529 that allows you to save money for future college tuition costs. 529 Plans. Why isn’t there something comparable to this for individual/family based health and medical insurance?
Maybe I should go start a Kickstarter.