How Much is Too Much for Insurance?
Recently I received a notice from the Human Resources department about health care and insurance. The memo talked about the rising cost of health care, the fact that the city has so far been able to absorb these costs, and information about the rising price of the plans offered by the city.
Yes, it’s true that insurance is increasing. Lets look at a few statistics:
- In 2006, employer health insurance premiums increased by 7.7 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $11,500. The annual premium for single coverage averaged over $4,200
- The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $11,500 in 2006.
- The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712).
We’ve got two different plans at Madisonville; a standard, and a premium plan.
| (P)= Per person (F)= Family | Standard | Premium |
| Deductible (P): | $500 | $0 |
| Deductible (F): | $1,000 | $0 |
| Out of Pocket Max (P): | $1,000 | $500 |
| Out of Pocket Max (F): | $2,000 | $1,000 |
| Coverage after Deductible: | 80% | 100% |
| Non-Preferred Providers: | 70% | 70% |
So you can see by the chart above that the premium plan gets rid of the deductible, and pays 100% of all in network providers cost, while the standard plan has a higher deductible and only pays 80% of the cost after the deductible is met.
Now, this is nothing new. But let’s look at the price that Meritain Health is charging the city of Madisonville for health insurance.
| Standard Plan |
New Rates / Month | Old Rates / Month |
| Employee | $0 | $0 |
| Emp / Dependant | $324.62 | $295.11 |
| Emp / Spouse | $446.35 | $405.78 |
| Family | $892.69 | $811.54 |
Now I’m sure you’re looking at this and saying to yourself that this doesn’t seem like much of an increase. I’ll have to agree with you to some extent. It isn’t much of an increase. However, you must also realize that $900 is quite a bit of money to have insurance on your family. This would break down to a minimum wage worker basically working for free 175 hours / month. That’s like working a 44 hour work week for free. But with the rising cost of health care, would you want to take a chance on needing an extra $250,000 to pay for a triple bypass?
I hear you, thats a bit extreme… I’m not even 35 yet. Well… yea, but just think about what it’s going to cost when you’re 50. So, lets get a little less extreme. It’s not that outrageous that you might break your leg sometime soon is it? How much do you think a broken leg costs? Try $50,000 if you need surgery, titanium pins, and physical rehab. Oh., and another thing. Look at the first row, first column of the table above. See it? It says Standard. So, lets take a look at the rate increase for the Premium plans.
| Premium Plan |
New Rates / Month | Old Rates / Month |
| Employee | $127.71 | $72.98 |
| Emp / Dependant | $824.93 | $471.39 |
| Emp / Spouse | $1086.38 | $620.79 |
| Family | $2044.99 | $1168.57 |
See the difference? We’re talking almost double the previous price for a premium insurance plan. Thats $24,540 dollars per year! Lets look at our poor minimum wage worker now; he’s going to have to work 4,765 hours (roughly 595 8-hour days) just to pay for 365 day worth of medical insurance. Thats outrageous… no, actually outrageous doesn’t even begin to come close. Oh, and last I heard, there were only 6 people in the entire city with family insurance so it’s not like Meritain is out a load of insurance
claims every year.
So now the big question… WHY? WHY is it so much for health insurance for my family? WHY is it more than double last years rates for premium insurance? WHY are we still with Meritain? There has to be a better way!
