Revisiting the Evil Empire of my Health Insurance

For some time I've had a sneaking suspicion that I'm not getting such a great deal from my health insurer.  Shocking, I know.  Last year, Anthem raised the deductible on my 2500 plan to $2950 (without changing the plan name, of course), and now they announced yet another rate hike, pushing my family's premiums up to $1,350 a month. Our benefits still seem pretty sorry, if you ask me. Now it's no secret that I am not a fan of the American healthcare system, but this is where I live, so what choices do I have?  I decided to apply my undiagnosed obsessive compulsiveness to exploring my options.

First, I needed to better understand the coverage I HAD.  How many of us actually know what coverage we have before we find ourselves with something that's not covered?  We know what we pay, and maybe we know our deductible and co-pay, but that's it.  It turns out that I had some big misperceptions.  To start with, it turns out my plan only paid a percentage of the price for things that are now free!   Hmmmm….

• Myth #1:  Keep your old plan because it's better than the new ones.  After the healthcare law was passed, Anthem kept encouraging me to switch to a new plan, and being a cynic, I took that to mean I should keep my old plan because it contained benefits no longer offered.  Wrong!  Thanks to the new healthcare law, new plans must cover all preventive care at 100%.  That means you can march your children into the fanciest office in Beverly Hills for their annual check-ups and immunizations, and you can get your annual gynecological exams, mammograms, colonoscopies, etc. done by the doctor who takes care of all the movie stars, and if she's in your network, it's all covered at 100%. No Co-pay, no nothing.  For many of us, that's pretty much the extent of our healthcare usage in a year. Kids can't be denied for preexisting conditions (even though they can be rated up).  Adults, of course, can still be denied coverage for preexisting conditions until 2014.  Lovely.
• Myth #2:  Small group plans will give you cheaper rates, so you should form a business and incorporate it, hiring your spouse as your only employee, and then you can get group coverage and save money.  Wrong!  Group rates are more expensive because they have to cover everyone, regardless of preexisting conditions, and if your group is very small, the risk isn't spread widely, so everyone pays more for the same coverage you might get more cheaply in an individual plan.
• Myth #3:  Kaiser is a cheap alternative. Nope!  It was the most expensive of the options I checked.  Why?? According to the broker, it's because their plans cover maternity.  This was one of the reasons I still kept that Anthem plan -- maternity --- and after kid #3 I planned to drop that coverage and get a cheaper plan, but at that point the Affordable Care Act passed, and I couldn't get a cheaper plan even without maternity!  The Anthem rep I spoke with said that as of July, all California plans will have to cover maternity, but no one is saying that publicly yet.  So if you plan to have a baby, you only have to keep an aspirin between your knees (as Foster Friess so elegantly put it) until July.

Since we would be paying over $16k a year in premiums with Anthem, and I don't think we spend anywhere near that much on healthcare services in a year, what if we just "self insure"?  What if we just don't buy health insurance?  Is that such a bad idea?  Why yes, it is a bad idea!  Doctors and hospitals have one rate they charge you when you're uninsured and another rate if you are.  Assuming you have a PPO, a doctor in your insurer's network of preferred providers, might charge $200 for a visit, but you'll end up paying half that much, because the insurer has negotiated a reduced reimbursement rate ("negotiated rate") with the provider.  And like I said above, if it's something preventative, it's free.  Same for hospitals, medications, etc.  Also, what if something really bad happens, like a car accident or cancer? That's when you can really get your money's worth!  You'd spend a lot more than $16k the minute someone needs surgery.  Besides, after 2014 the option of not having health insurance won't be legal.  Or else we think it probably won't, but we're not totally sure.  There's a lot of uncertainty around the health insurance world right now.  In the two years since the Patient Protection and Affordable Care Act (A.K.A. Obamacre) was signed into law, some of it's provisions have already been enacted, while others won't take effect until 2014, unless the courts tear it down, or we will end up with a modified version of it, so any kind of health coverage you get, think of it as a temporary solution while all this is being sorted out.

Ok, so you need some kind of health insurance, but with so many moving parts, comparing plans is simply dizzying.  Deductibles, premiums, co-insurance, prescription drugs…. it's clearly a conspiracy to prevent us from ever trying to change plans.  And what if you make a mistake, and choose a plan that gives you inadequate coverage when you need it?  The fear of making a catastrophically bad choice is kind of paralyzing.   You've learned from car insurance that higher deductibles mean lower premiums, and we want cheap premiums.  But is there any way to prevent those premiums from rising? In California, rates are up 150% in ten years, but that's nothing --- Wellpoint (the parent company of Anthem California) has raised premiums in Maine over 400% since 1999! It turns out that in California, no one has the power to limit premiums, and the insurers can charge whatever they want, raising prices whenever they like.  In 30 other states, that's not the case.  Click here  to read more about this and sign the petition to get this changed!  Let's be clear, the U.S. healthcare system is expensive, inefficient and unfair, and healthcare should not be a "for-profit" business.  I personally favor a hybrid single payer solution, and I believe that is ultimately where we will end up, one way or another.   One proposal is to open medicare to all (HR 676 Conyers medicareforall.org/pages/HR676), and there is also a movement to create a single payer system in California (californiaonecare.org).  

And by the way, Myth #4 is that health insurance companies oppose Obamacare.  They're actually pretty psyched about having all those young, healthy people who never need medical care having to pay them premiums!   

ok, so back to ME and MY problem (because I know you can't stand this suspense another minute).  I figured out that I could probably live with higher deductibles in exchange for lower premiums, as long as I had the benefit of negotiated rates, a low-ish co-pay, a big network of participating doctors and hospitals, and free preventative care.  At most I'll pay a little more for occasionally going to see a doctor outside of my network.  I finally settled on a Cigna plan for my family with a $5000 deductible (for each of us), after which all services were covered at 100%, and the premiums were quoted at $925. They even guaranteed my rates won't go up for one year.  Of course, they rated up my two and six year old kids for the "recency" of ear infections they both had a month ago, so we ended up paying $1,003 (Grrrr).  Anyway, I think this is slightly better than what we had, and I decided to go for it. 

And what if we need some really expensive procedure done?  Maybe a trip to India or Costa Rica will be in order!  Medical tourism is booming.  You will often save 50 to 80 percent, and that's even including travel expenses.  The major insurers are even testing programs to cover overseas healthcare services because it's cheaper for them too.  And what if there are complications?  You buy a medical tourism insurance policy (not covered in my last column on unusual insurance policies) of course!  

So goodbye Anthem, I'll think of you while I'm not spending that $4,200 a year on your premiums.  I'm hoping it was the right thing to do.  Pray for me.  At least this should hold us until we get a single payer plan (or we discover the Mayans were right, and the world comes to an end in December).
Now, can anyone tell me why teeth and eyes are not covered on a medical insurance policy?