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Health Insurance Headaches

by on November 07, 2017 5:00 AM

 

On this Election Day, I’m feeling a bit frustrated.

I’ve spent a good portion of my life subscribing to the “pull yourself up by your bootstraps” narrative often attributed to Horatio Alger and his turn-of-the century novels. This narrative describes individuals working hard and climbing up the ladder of success to the ideal we all know as the American Dream. As a third-generation American I envision myself as an example that honest effort can lead to a solid middle-class existence in this country.

Today being an Election Day, we would normally have heard this “bootstraps” tale from politicians of all parties for the last several weeks and months. But since these are the odd-year elections, the ones with mostly local candidates and only a few statewide justices, we miss out on the salesmanship of those statewide and national candidates who are experts at marketing their allegiance to this most sacred of mantras. Put your nose to the grindstone and you shall be rewarded.

The wonderful part for many Americans is the data shows this appealing and commonly believed narrative is true more often than not – with a few caveats. An oft-cited study published in 2012 by The Pew Charitable Trusts, Pursuing the American Dream: Economic Mobility Across Generations, contends that 59 percent of sons earn more than their fathers did at the same age. Interestingly, only in the top-fifth of wage earners do less than 50 percent of sons exceed their fathers’ earnings (sometimes the rich don’t get richer). Among those in the bottom-fifth, 85 percent of sons exceed their fathers’ earnings.

But the caveat is that a demographic change has occurred over the last few decades which gooses those numbers just a bit. That change is more women, specifically married women, are now participating in the labor force. And, at the same time, there has been a slowdown in men’s earnings gains, reducing men’s contributions to overall family income. In older generations, a fathers’ earnings constituted 75 percent of a family’s total income. Today, men’s earnings only constitute 61 percent of a family’s total income. Meaning that these days, to experience that upward family income requires a couple’s combined earnings.

And we all like to keep up with the Joneses don’t we? So to continue that never-ending quest, both members of the family are constantly striving to earn more. Or, in the converse, spend less whenever possible.

Which brings me to my frustration.

Of the large monthly expenses families have historically had – a roof over their head, food to eat, transportation, taxes – we’ve added another in recent decades: health insurance.

Our family is a bit of an anomaly in that we have been buying our own health insurance for almost 20 years. Either as a one-family group or in the last few years from the “Marketplace.”

When we started buying our own health insurance in 1999 we lived in Bucks County, northeast of Philadelphia. For the first few years we chose plans with average deductibles, co-pays and prescription benefits and our monthly premiums were always between $650 and $800 a month.

Then we moved to Happy Valley and discovered the happiness of the valley extended to health insurance rates. For the first eight years we lived here in the beautiful Centre Region our monthly health insurance premiums were between $440 and $670 a month. To be fair, in some cases we did start to accept a slightly higher deductible or co-pay in an effort to keep our premium reasonable.

Then in 2014 the Affordable Care Act became a reality.

In late 2013 we received a letter from our insurer stating that in 2014 they would no longer be able to insure us. Not that the price would go up, or there would be stipulations or conditions, or certain coverages wouldn’t be available. Simply, you can’t buy insurance from us. The only place we could purchase insurance was through the federal government. After 15 years of a well-functioning consumer relationship with various insurers in an open market we were being forced into government healthcare.

You can imagine this was a bit of a shock for someone with a bootstrap ethos. What followed next was even more of a shock. We were told insurance similar to what we had been buying – for which our monthly premium in 2013 was $592.54 per month – was now going to be more than $1,000 a month. Out here in good ol’ Happy Valley.

For the last two years we have paid more than $1,440 a month for health insurance with high deductibles and high co-pays that is not as good as the insurance we bought for less than $600 just four years ago. We spent more than $12,000 in additional medical expenses in 2016, on top of the o more than $17,000 we spent on insurance premiums. More than $29,000 in medical care. And the worst part – we’re a healthy family.

All of which leads us to the present day. Recently the enrollment window at HealthCare.gov opened up. It’s time to pick a new health insurance plan for 2018. Boy, weren’t we surprised. The premium for a similar plan with the same insurer has risen to more than $1,900 a month. That makes pulling yourself up by your bootstraps a little tougher.

Now if only the folks we’re electing today could do something about it.

 



John Hook is the president of The Hook Group, a local management consulting firm, and active in several nonprofit organizations. Previously John spent 25 years in executive, management and marketing positions with regional and national firms. John lives in Ferguson Township with his wife Jackie and their two children.
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