Put Pencil To Paper (Gwen Moritz Editor's Note)

by Gwen Moritz  on Monday, Nov. 13, 2017 12:00 am   3 min read

I’m not saying this just to make you jealous, although it will undoubtedly have that effect on some readers: My husband and I no longer have any dependents on our health insurance. Our younger son became eligible for his employer’s generous insurance benefits in September, and dropping him from our family plan was like sticker shock in reverse.

But now that a new year is approaching, we have a decision to make: Should we continue together on my husband’s employer’s plan, which had been a no-brainer when we had three or four family members to cover, or should I get my insurance through Arkansas Business Publishing Group?

I sat down last week and ran the numbers — premiums, deductibles, out-of-pocket maximums. The University of Central Arkansas, where my husband works, has a match for contributions to health savings accounts, and that must be factored into the decision, as must the variations in physician networks.

I’ve been on my company’s benefits committee for about 15 years, so I understand this stuff pretty well. I was writing in this space about high-deductible policies and HSAs as long ago as 2005, when ABPG began a three-year experiment with a concept that was clearly before its time. And still it took me a couple of days and much discussion with my husband and other victims before I decided on what is probably the best route. (But only probably, because we can’t know until we see what 2018 brings whether we made the right choice.)

While I was thinking through our situation, I noticed on Facebook that an acquaintance was facing a similar decision for her much younger family. “We’re becoming eligible for Health Savings Accounts,” she wrote. “Listened in on a discussion about them today. Feels wrong to mix health care with investments.”

I obviously didn’t hear the presentation, but her comment makes me think the presenter placed a little too much emphasis on one small advantage of HSAs — that you can actually earn a return on the balance. I encouraged her not to dismiss high deductibles and HSAs out of hand without doing the math.

Now that high deductibles and HSAs are becoming more common, I suspect a lot of employers are trying to educate themselves and their employees about what is a very different way of thinking about health insurance. For the past three decades, health insurance has been seen almost like a discount card that makes a visit to the doctor cost only $25 or $30. But high-deductible plans are more like auto insurance. No one expects auto insurance to cover an oil change, but it’s indispensable when your car is wrecked or stolen.

(Dental insurance, to my eternal consternation, remains the opposite of auto insurance. It covers routine, low-cost maintenance but is woefully limited when it’s time for a crown or implant.)

Taking on more risk — more “skin in the game” — is supposed to make us savvier consumers who carefully seek out the most cost-efficient treatment. But most people are risk averse in the first place, and there is no market more opaque than health care for those of us who are willing to shop around. (Left-leaning Vox.com had a viral hit last year with a video of an expectant father calling a half-dozen different hospitals in a futile attempt to get an idea of what a normal labor and delivery would cost.) We’re trained not to ask what we’re spending, to accept that the provider’s bill is a fiction and to trust that the discounted price our insurer has negotiated is fair.

So HSAs aren’t really serving that function very well, but I’m still a fan because I would rather pay a lower premium and set aside money, tax-deferred, for the out-of-pocket expenses that may or may not arrive in any given year.

While I’m thinking about all this, I realize that my husband and I, our son and my Facebook friend are fortunate to have employer-provided health insurance that is reasonably affordable. I have a self-employed friend who is paying $20,000 a year for family insurance with deductibles so high that he calls it “bankruptcy insurance.” I have another friend who feels lucky that her self-employed husband can pay more than $25,000 a year because she has a pre-existing condition that is very expensive to treat.

There has to be a better way.

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.

 

 

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