Health Insurance: the Uniquely American Jungle

VCphoto2To paraphrase a quote from a friend, it doesn’t matter who helps you with insurance until it does.

There’s no single policy or company that provides “complete” health insurance in the US.  Truly complete coverage involves stitching together policies from multiple sources while keeping costs manageable.  It’s the insurance version of quilting.

Your daughter breaks her arm playing basketball at school.  The doctor’s bill is $1200.  How are you paying for it?

You’re overdue for a colonoscopy.  Do you know that the cost can vary wildly depending on where it is done?  Will you be out of pocket for this or will your insurance cover the cost?  Do you know?

In medicine, it is the case that “an ounce of prevention is worth a pound of cure.”  Catching any illness in the early stages of development makes it easier and less costly to treat.  Most Stage I cancers are easily treatable at little cost; most Stage IV cancers are fatal and very expensive to treat.

For consumers, this means that annual check-ups aren’t optional.  doctor-clip-art-doctor-clip-art-4Nor are mammograms, colonoscopies or esophageal endoscopies.   By the time you become aware of a blockage of the esophagus (without a screening), it’s Stage IV and your five-year survival rate is less than 10%.  You’re basically done.

The problem for consumers is being able to pay for check-ups and screenings.  That’s where the fine print in your health insurance becomes critically important.  Some policies will cover screenings and some don’t.  If your policy doesn’t, and you have a high deductible, you could be liable for thousands of dollars in costs.

As the New York Times reported (10/17/2014 and 11/15/2015), there are consumers who have health insurance and still can’t afford to see the doctor.  They can’t pay the deductibles and co-payments, so the simple act of buying insurance becomes largely irrelevant.  The Affordable Care Act (aka ACA or Obamacare) simply didn’t go far enough to solve the problem of affordability.  A lot of that is related to accommodations required to overcome resistance to passing the law.

There are some resources, although some in Congress and the states are trying to cut the budget for them.  Planned Parenthood provides mammography for poorer women, but has become a target for other services in which it is involved.  There are also public health clinics, but these are only in limited locations.

Ultimately, the consumer is faced with an array of options and costs:

  • Private insurance, Marketplace insurance, Company-sponsored insurance or no insurance
  • Low or high deductibles
  • Low or high co-payments
  • Whether to include options such as dental, vision or supplemental health insurance
  • Choice of insurance company
  • Choice of doctor and hospital
  • Whether insurance covers travel out-of-state (some plans don’t)

Even seniors have to make choices between Medicare, Medicare Advantage and Medicare supplement plans.  Nothing is simple anymore.

Very few people can afford the high-end plans that cover everything with next to nothing out of pocket.  Even in the Marketplace, such plans can cost upwards of $2,000 per month, which is more than a  lot of people make in a year.  That’s higher than most mortgages.

That brings us back to the question of who advises you about health insurance.

  • Most agents are sales reps, trained to sell a particular policy and not necessarily familiar with the options that consumers may have.
  • With substantial turnover among agents, a lot of agents you meet will have been in the business for less than a year.  Some of these will make mistakes in presenting what their own policies do and don’t do.  That’s not a criticism.  Think about it: that’s why there are learner’s permits for drivers.
  • Under a new and controversial rule, investment advisors are required to place the well-being of the consumer ahead of the advisor’s financial interest.  There is no similar requirement for health insurance agents, although there should be.

So you can either hit the books and become an expert in health insurance yourself, or find someone who is.

There are agents with experience, knowledge, and who place the well-being of the consumer first.  We’re not perfect, but if we don’t know something, we tell you and then we do research and find the answer for you.  We don’t rush you into purchase decisions, but when we work together, we design a plan or set of complimentary plans that will take care of what you, your family and your employees need within your budget.

We’re here to help you complete your insurance quilt.

Vic Crain
Partner
Crain Insurance
vic@craininsurancellc.com
609 510-3712

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