for emergencies.

Every year around this time, we have a company meeting about our health benefits. Because every year, the cost of insuring the twenty-odd employees at this little company goes up 15% or so. In previous years, this meant that we would fill our forms to get quotes from other insurers. We'd always end up with Blue Cross again, usually with a slight increase in our copays. This year was different.

We switched from a PPO ("preferred provider organization") to a QHDHP ("qualified high deductible health plan"). I think it's cheaper for our boss, so I assume that we are not paying by the letter. The PPO is basically a discount system. You go to the doctor or you fill a prescription, then you pay the copay. If you have a heart-attack, then there is a smallish deductible, after which you pay 20% of the total cost. In the new plan, doctor visits cost the actual price that the doctor charges, rather than the blanket $15 copay. It's discounted from what you would pay if you had no insurance at all, because the insurance companies work out a deal with the doctors. It's like wholesale. If you rack up enough doctor's visits to meet your deductible, which for me is $1500 a year, then everything for the rest of the year is free. I'm gonna break my arm next year and then get a whole lot of free mammograms.

There's also a health saving account, where you can have money deducted from your paycheck pre-tax. The money in the account, unlike in some flexible spending accounts, rolls over from year to year. And when you spend it to pay for your more-expensive-than-it-was-last-year prescription, it's not taxed then either. Your $1500 pre-tax only cost you about $1000 post-tax. So if you have $1500 or more sitting in your saving account, then you're good for whatever happens.

During the meeting, I felt bad for Mike, the guy who came and explained our new system to us; it was a tough sell. Not that he was selling us anything. Our boss had already signed us all up, and this was what we were getting. But the guy did have to come and tell us how it was gonna be now, and no matter how many pairs of rose-colored glasses he gave us, it all just sounded more expensive. Before, a trip to the emergency room would set us back $150. I've spent more on dinner (plus tip). Now, it might cost the whole of our deductible. Mike said he couldn't argue with that. He added that a trip to the emergency room doesn't actually cost $150, so who is paying the extra $1350?

Our boss, probably feeling a little defensive about his decision to go with this plan, blamed the health care reform bill. No, actually, he specifically blamed the president. He did this twice before Mike cut in and said that the health care bill did nothing about lowering costs. He further said that the bill was not for us. After all, we already have insurance. That's why we were spending our Tuesday morning talking about copays and flexible spending accounts. The bill was for those millions of people who didn't have insurance at all.

I'm not sure if that mitigated anyone's anger, but the topic didn't come up again. I decided that I liked Mike.

Not that there wasn't more politics. I'm glad these meetings only happen once a year, because we have a few outspoken people in the office. Maybe I wouldn't mind so much if their views aligned more with mine. One guy kept asking hypotheticals that bordered on ridiculous. One question started off with "Seeing the direction the current administration is going with regards to taxation," and was followed up by a question about taxing the health savings accounts. Mike responded that it was difficult for him to answer questions regarding legislation that had not even been written yet. I thought about asking what would happen to our health saving accounts in the event of a robot holocaust.

I don't understand why people ask questions like that. I have a hard time believing that he thought he could get an answer, so was it just rhetoric? Was he trying to sound intelligent? Did he assume that most everyone agreed with him, and if they didn't, they quickly would once they heard his brilliant questions? Maybe he was sucking up to those in the office in higher tax brackets.

I don't mind the new health plan. It will be more expensive for me, since I go to the doctor only a couple of times a year. That used to cost me a total of $30, but now will probably be more like $100. In a purely financial sense, that is not in my best interests. But this plan is trying to be a different kind of insurance. It's more like the kind of insurance you have for your car or your house. There is no copay for getting your oil changed or even your brakes fixed. Auto insurance is for when you have an accident. It's not for maintenance, it's for emergencies. In the case of an emergency, this plan is much better. Yeah, they expect you to be able to save up $1500. I don't think that's an unreasonable request for a room full of adults employed in software.

The PPO system just doesn't seem to be very sustainable. If everyone thinks that it actually costs fifteen bucks to go to the doctor, then there is no push from consumers to lower prices. People don't shop around for better prices, they don't care what it actually costs nor who is paying the difference. If health care costs go up overall, it's invisible to us. Mike seems to think that the PPO system is on the way out. I can see why.

Just think - when I'm old I can tell my grandchildren how it used to cost $150 to go to the emergency room!


Anonymous said...

My health care is something like that. I pay about $90 a month for it. It is called a consumer driven option. I am given $1200 to spend a year (in an account, not actual money)on health care. If I go beyond that, I have to pay for the next $1800. After that it is 80/20%. But you can save up the part of the $1200 you didn't use. Since I have not used most of the $1200 for several years, the $1800 is covered also. Also can pay for dental/eyeglasses out of the $1200. I like it. Also it is before taxes dollars.

Carla said...

We have a PPO right now, which is good in some ways because we rarely go to the doctor. But it's also bad because they say you have to go to certain doctors, and that list never includes homebirth midwives. Homebirth is legal here in TN, and when I was pregnant w/ Chloe I actually called BCBS to explain that it would be saving them big bucks to cover homebirth because it is way cheaper than an ob/gyn. The lady I talked to was totally ignorant about the whole homebirth thing (which didn't surprise me). After putting me on hold to "talk to her superiors", she tried to tell me there were all these federal laws about having to go to the hospital afterward to have the baby checked out (UH, NO, LADY, THERE AIN'T). I could see I was getting nowhere so I just thanked her and ended the call. But now we have a (pre-tax) flexible spending account in addition to our PPO and I CAN use that to pay my midwife. Our PPO is very basic and doesn't cover squat for vision and only a little dental, so we basically use our FSA for those things and our co-pays (and for next year, a baby). I like it. It only rolls over for 3 months into the new year (so you have 15 months to spend it).