Monday, July 08, 2013

Monday, July 08, 2013

A week ago a got a nice letter from my medical insurance company.  My policy is a group plan through the American Association of Orthodontists that I have had since 1997.  As you might expect, my premiums have risen at an incredible rate, and my last 6 month premium for Beverly and I was $13,791.  The policy is for a high deductible ($6,000)  and PPO plan, which means that the insurance pays nothing until I have spent $6,000 out of my pocket each year, and that I agree to use providers in their preferred group for which they would pay 80% of reasonable and customary.  If I go out of their preferred group, they only pay 60%.  Since 1997, we have only exceeded the deductible 3 times, which means for the approximately $193,412 we have spent on premiums, they have paid approximately $10,000 total.  This is clearly a policy designed for catastrophic illnesses or injuries, and since we have avoided them, we just get to pay the premiums and feel lucky. 

 It is usual for me to receive a letter a month or so before the premiums are due.  The letter generally tells me that expenses are very high and that they have been able to hold the premium increase to only 11%.  Imagine my surprise that this time the letter informed me that they (New York Life) is pulling out of the medical insurance market because of Obamacare.  Since they would have no choice about accepting clients with pre-existing conditions, their actuaries could not accurately predict what their expenses would be so they are leaving the market. To me it feels a bit like a slap in the face.  I suppose lots of other participants in the plan have been able to have their claims paid with my premium dollars, but I want my chance!  Sort of.  The point here is that they are not the only company with the same hesitation who will be leaving the medical insurance market in the near future.  For me, if the group doesn’t come up with another company, I will be hitting the insurance exchanges with the rest of America.  But look at my premiums for catastrophic insurance…..How can an employer be forced to pay as much for his employee’s medical insurance as he might pay them in wages.  Or how can an individual who makes $20 an hour, or $41,600 gross per year assuming 40 hours per week/52 weeks per year be forced to pay half of their gross earnings in medical insurance. Oh wait, I forgot…..WE are going to subsidize their policy. To the tune of half of their gross wages?  Can anyone with a calculator see how this can work without accelerating the spinning feeling we already are experiencing as we head down the drain?