My employer is particularly “generous” in terms of the share of health insurance costs that they pay on my behalf versus the share I must contribute on my own. Our family chooses to “buy” a HSA Eligible High Deductible Health Plan. So for low premiums, we have high deductible insurance that kicks in when we really “need” it.
I’ll discuss how this works in another post. For now, I just wanted to share with you how this is paid for here at UR. I have a family plan, and each MONTH, I contribute a mere $20.18 toward my insurance premiums. In addition, I take $200 per month of my pre-tax salary and put it in a savings account to be used to pay out of pocket medical expenses (tax advantaged). My employer? They contribute $878.78 each month on my behalf! This amounts to an annual contribution toward my medical care of $10,545 each and every year. How many of you count that when you think about how much you earn from your jobs? I sure do. I’d still rather have the $10,545 in cash, and then have the choice to shop around the country for my family’s health insurance.
In any case, I pay only 2.3% of the total premium costs of my HSA policy each month. Two point three percent! Because of the way the deductibles work, I end up paying a far larger share of my annual health costs than that – but the share is still nowhere near 50%.
What is my point right now? First, is that if UR did not contribute this huge amount toward my medical care, they would be paying me more. I would happen to prefer the salary – but the “system” is not set up to allow me to make that choice. Second, to claim that UR is at some competitive disadvantage because of this system is silly – they must compensate their workers either way – and it seems awfully costly to have a huge benefits office to administer health insurance benefits to do it – cash is king. Third, I have what you might call “catastrophic” coverage for our family, and that cost is almost $11,000 per year. And I am in a risk pool here at UR that is undoubtely healthier and more well behaved than other risk pools. Just think of what a low deductible plan would cost.
Ultimately, these sorts of facts distort the choices people make about where to work or the health care decisions they make for their families. Some people who only pay 2 percent of their annual premiums might not think there is anything wrong with the health care system and just have no interest in the debate. Others paying only 2 percent think that is actually what health care “should” cost them, and everyone else, and therefore thinks everyone should have access to that sort of low cost care. Each of these are delusions. The only way out is to eliminate the employer tax preference for health insurance, and get them out of the business of offering health benefits to their employees. That will never happen.
UPDATE: The Obama Health Plan will virtually kill the existence of these real insurance plans. You know why? Because people like me who try to save for real large medical expenses and who wish to insure themselves like real insurance, are not “contributing enough” to subsidize the health insulation plans that the President in all his socialist wisdom envisions for the rest of the country. It’s theft even beyond what the income tax system is. The one reform that we KNOW would make the medical system work better and be more cost effective is the first thing to get the scalpel under the “reform.”
Have a lovely day.