Since starting Broadleaf Partners three years ago, I have purchased a high-deductible health insurance plan that covers my family of five. My premiums have been running roughly $400 per month, but I also have to cover the first $5,000 in health related expenditures I have each year. To that end, I have established a tax deductible health savings account to fund these expenses and have put the maximum amount each year into the account.
While I could lower my deductible to as little as $1000 per year, doing so would shoot my premiums up to about $800 or so per month. In either case, my maximum out of pocket in a single year would be about $10k, while my minimum expenditure would be about $5k in the event our family experiences a perfect health year. If I make $100k per year, this amounts to a maximum outlay of 10% of my gross. As I think about the relative importance of health care to other items like food, housing and energy in my budget, I frankly don’t know that the percentage is out of line.
A few other thoughts:
1. ) Many democrats have cried foul over health savings accounts, suggesting that they are merely another way for the rich to shelter income in an IRA like vehicle that will rarely if ever be used for medical purposes. I am exhibit A that this notion isn’t the case, but perhaps I am the only one. I use it all the time.
2.) While many are applauding the decision of emerging countries like China to reduce their subsidies on energy prices so that consumers there will have a greater influence on determining market demand and price, it is humorous to know that many of the universal health care coverage proposals would take us in the exact opposite direction. Again, I am exhibit A regarding the false perception that consumers can’t influence health expenditures on their own. Since the first $10k that I spend each year is my own money rather than an employer’s or health insurance company’s, you can be absolutely sure that I shop things around…alot. I ask what things cost. I ask for higher dosage pills and then split them. I question whether or not I really need something now, if it can wait, or if I need it at all. You would be absolutely amazed how little doctors know about what different procedures cost. When I asked a urologist what a vasectomy cost these days, he had no idea and had to ask his receptionist. I was shocked to learn (and somewhat disappointed to know) that it was barely more than a run of the mill dental filling or the cost of getting a couple of cats spayed.
3.) According to the most recent issue of Kiplingers, there are 47 million uninsured individuals in the United States. Of these 70% are in families with at least one full time worker and the rest are retired or unemployed. 8.4 million are eligible for government programs but don’t know it or know how to sign up, 10.2 million are non U.S. citizens, 9.2 million have household incomes of $75k or higher, and 7.5 million are 19-24 years old with either no access to health care, lack money to pay for it or don’t think they need it. Mandatory coverage may be a poor choice for folks that are choosing on there own that such programs aren’t for them.
