High Health Insurance? Three Questions to Remember

Christine blinked, and checked again. It was no mistake. Her health insurance was going up 40%. She hadn’t really expected it to go down, but this was ridiculous! 

Christine is one of millions of Americans waking up into the nightmare of overpriced healthcare. Most of us never realize how much we depend upon having many choices, and an open market, to enjoy low prices and high quality .

For the best burger, it helps to have not only Burger King and McDonald’s, but also Wendy’s, Hot and Now, and the local burger joint. And Pizza Hut. Healthcare is not so different: more options give competition and innovation, which translate to higher quality and lower prices.

But healthcare leaders don’t think this way. When mergers are proposed, they talk about economies of scale and future savings. Hundreds of mergers later, prices continue to rise, and savings never seem to trickle down to those of us paying the bills. The trend involves both hospitals and insurance in a seemingly inevitable plunge into a single system. Motives to merge are here; the connection between consolidation and high prices is documented here.

So, I have some questions. Last week’s proposed health insurance mergers  would shrink the American market even more, from five to three companies. Promises of future savings are back again. But mergers do seem as though they could enable efficiency more than maintaining separate entities.

So when prices continue to rise, is the new Mega-Corp necessarily taking advantage of the lack of competition, and hogging the extra savings? Or is there some natural limit to economies of scale that we blew past years ago without anyone bothering to tell us?

One healthcare CEO assumes the natural limit is indicated by falling credit rates when the market dings organizations for structural weakness. Health economists might give another answer, and anyone with experience or a common sense might have their own take. Maybe we’ll never get a complete answer.

One certainty of basic economics, however, is that the trend to monopoly owes its existence to a regulatory environment of mandates, subsidies and tightly-defined plans. The contrast is stark. Never would an open market system allow this narrow selection of expensive, unstable options to survive unchallenged.

After all, security is what we expect of insurance, and for different people that means different things. Your needs at 20 are not his at 80 or mine in rural Michigan or hers in New York City. Demands for choices of price and coverage are simply too broad to be satisfied with a single system of limited options.

The real question is, do we still have a choice?

Yes, we do.

Americans need not accept expensive monopolies, much less a British, Canadian, or another version of national healthcare. Christine’s story has a happier ending, and so can yours.

… the premiums were bad enough, but her out-of-pocket medical expenses were far below the sky-high deductible. She’d never see a dime of pay-out, and she had other claims on her income. All those premiums down the drain…. Something had to give. What could she do?

Christine thought, and began to search online. In the end, she found a consultant who confirmed some of her findings, and found her even more options for saving.

Christine’s Questions:
1. What if… she could cut her premiums in half, without incurring the penalty?
She can. The sharing organizations welcome new members every day, and they are exempt from the ACA penalties. Their monthly payments average half the price of ACA-compliant premiums.

2. What if… she could safely eliminate health coverage entirely?
She probably can. Many qualify for the 20+ ACA exemptions, and for those who don’t, the individual penalty is usually far cheaper than ACA-compliant insurance premiums. That leaves a lot of cash for her own personal emergency fund. (If she decides to enroll after all, the ACA says she cannot be turned away.) She can gauge her risk/comfort level for self-funded coverage by using this information.

Do you have questions or suggestions for future blogs? I love comments from readers. In case I address your question in a future blog, be sure to subscribe so you don’t miss it!

For private individual and small business consultations, you can reach me at abby.healthcarefreedom@gmail.com.


This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *