Friday, March 9, 2012

Healthcare, Insurance, and the Government: A Personal Experience

Today, I came across a great piece by Dr. Paul Hsieh, Free Market Lessons from Contraception Fight

I started writing this blog post, simply to recommend the article and highlight Hsieh's first point: "[h]ealth insurance should be uncoupled from employment".  However, the expected 2 line blog post, turned into my publicly telling a story, I have yet to share.

If one's goal was to destroy the personal health insurance industry, there is little better one could have done than to tie one's health insurance to their job. I have been against employer-owned health insurance since I first came across it 15+ years ago.  However, it hit me personally last year, when I found out my wife was pregnant.  I had a good job, and a great insurance policy.  However, because I wanted the family to be more financially secure, and I wanted my wife to be able to stay at home with the baby for a few years, I started shopping around for a new job.  I found a job that was a great fit for me, my skills, and my career goals.  It also came with an immediate 25% salary increase and the potential for another 25% within 2 years.  So, even though I knew there was a financial risk given that my wife was pregnant, I thought it was worth the leap. 

The worst possible happened, the company I went to work for had not properly planned for their expansion and they ended up laying off half of their new hires, myself included, within a month.  So I now was looking for a new job.  And given that this was immediate and unexpected, I did not have the time to fully vet my choices (potential employers).  So I took a job that paid well, but that was not the best fit for me.  So 4 months later, I was out of work again.  Thankfully, and with a bit of luck, I was able to quickly find employment (just weeks before the new baby arrived), however I had now had 4 jobs within one calendar year.  Four jobs while my wife was pregnant.  Talk about an insurance nightmare!

So what does this look like.

Insurance/Job 1:  policy fully covered wife's pregnancy. Only out of pocket would have been our deductible. The catch with this plan was that it was back loaded.  Meaning, the insurance company sends no monies to providers until baby was delivered (and/or morbidly miscarried).

Insurance/Job 2: continued same policy, under COBRA, because position was a contract to hire, and so could not get insurance until the contract went permanent (approximately 6 months) in addition to our premiums, we had to personally pay the employer contribution (approximately $700/month)

Insurance/Job 3: new policy when I started at company 3.  At this point we were mid-year...May-June time frame, so even though there was a risk of moving away from policy 1, it made no sense to continue paying COBRA rates.  The new insurance company assured us that they would cover all pregnancy related expenses from that point forward.

Insurance/Job 4: Let go from Job 3 at beginning of September! Oh, my!  We are on the second policy (i.e., two sets of deductibles), and are back to paying COBRA rates!

In addition to the stress both to me and my pregnant wife, we paid close to $10,000 in deductibles, COBRA payments, labs that weren't covered on one policy, but were covered in the other.  We also had to waste many hours, and lots of energy, and patience talking to, and pleading with the insurance companies because of the "back loaded" nature of how insurance company 1 dealt with paying the providers versus the "front loaded" nature company 2 paid providers. If that did not get worked out there would have been another $4,000 to $10,000 worth of charges.

Insurance is not evil.  I am very happy to have had the insurance and have been covered if anything dire would have happened to my wife or baby last year.  However, the fact that government has got into regulating the insurance business has driven up the cost healthcare. The fact that details of policies are removed from employees hands and given to employers changes the nature of insurance and thereby drives up cost even further.  These two together have made it difficult, if not impossible for middle class individuals like myself (50,000 to $150K/year) to do the most basic things, like having a child, without an insurance company footing the bill.

It is insane that a routine pregnancy, would cost a family 10,000 to $20,000 without insurance.  It is insane that even if one buys insurance (through an employer) that the same uncomplicated pregnancy could end up costing $10,000, once deductibles and COBRA payments are factored in.

Like with my home and car insurance, my healthcare insurance should be private.  And like with my car insurance, $50 a month, from which I do not expect the insurance company to cover rotating my tires or change my oil, I wouldn't expect my private insurance to cover my wife's birth control pills or my yearly health checkups.  And given that, my health insurance would not cost my family (employers contribution included) $900 a month, and all of our routine medical expenses would be pennies (or dimes) on the dollar!

As a side note, our pediatrician charged my insurance company $120 for telling my wife and I that starting at 4 months we can begin feeding our baby solid foods (i.e., rice cereal and stage 1 baby foods)...but please oh please make sure you introduce only one new food every week, and go through all the veggies before the fruits.  This 5 minute "conversation" came with 3 printed pages... $120!  This did not include the cost of the visit, or the $700 he charged for the 4 vaccine shots. I know my doctor is not an evil, vile con-artist.  But there is an evil, vile system in where the government controls health care, health care insurance, and a court system that wants to bankrupt every "rich doctor" that may or MAY NOT make a mistake.

And for all of those out there that talk about a "social safety net".  During this period, one where we had to pay $10K worth of medical bills and insurance payments, and I went 6 weeks without work, we received no money from "my" unemployment insurance.  Something I have paid into for over 20 years and have never seen a dime from. We received no help for the medical expenses.  No one from the government did anything to make sure we had food on our table or our mortgage got paid.  Given the timing of when I was laid off, the first time, and the details of the end of the second job, I qualified for a grand total of $900 worth of unemployment benefits.  That's for five weeks...five weeks, of which I would have been paid close $11,000, the most I would of qualified for was a "safety net" of less than 10%, but to collect that, my first action had to have been to contact the unemployment office within 24 hours of being laid off...since I focused on immediately finding work, I lost $300 of that $900.  When I did contact the unemployment office I was told I could not be "paid" retroactively.  So now the most I could claim is $600.  But to do that would require immediate action that evening.  Well, my celebration dinner at Chili's ($25) for getting the new job cost me to miss the window to file, and so I lost the $600.  So on both sides, I lost MY UNEMPLOYMENT INSURANCE PAYMENTS because I focused on working, focused on taking care of my family, focused on values.

In the end, Sara and I have a beautiful healthy baby girl, I have a great job, and the bills we incurred last year are starting to be paid down.  We are happy, albeit still a bit shell-shocked.  The system is indeed broken, and it is getting worse by the day.  But "the system" is not private insurance or private health is a system of control coming from Washington, and feed by a country that thinks we are our brother keepers and that personal values, personal choices, and personal responsiblity are either inconsequential or evil when compared to "the need" of our neighbors.  Well, I paid for my neighbors and my own needs last year.  Let me tell you, it sucked.  And the only gain I got from "the system" was a bit more hatered for my neighbors.

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