Healthcare Technology Featured Article

May 16, 2012

No Surprise, but Health Care Costs This Year May Exceed Annual Mortgage Payment

I’ve cried the blues before about our decision to take a high deductible health insurance policy and pray we wouldn’t have high medical bills. Wrong. My husband and I (both self-employed) paid over $10,000 in premiums alone last year (and that was just for me). My husband, a dentist, does not believe in health insurance. We built up $3,000 in medical bills on top of that, so, in essence, we paid $10,000 to pay $3,000. What a bargain.

But the Huffington Post is now reporting that health care costs for a family of four, even those covered by workplace health insurance, will surpass $20,000 for the first time ever this year -- $20, 728 to be exact, will come out of their pockets – $1,335 more than in 2011, according to a new study released Tuesday.

The study found that a family of four will pay $5,114 in premiums for a preferred provider organization plan, a common type of health insurance, where you get to pick your doctor, not have to choose from a list of approved physicians who usually accept lower fees for the guarantee of patients (and who, my husband knows from personal experience, will usually not care for you the best). 

But, as Jeffrey Young writes, you’re not done. You’re still paying $3,470 in out-of-pocket costs like co-payments for doctor visits and prescription drugs, according to the report issued by Milliman, a firm that consults with companies on employee benefits.

Employers pay the remainder, though, as Young points out in his story, money spent on health care and other fringe benefits is money not spent on higher wages. And some spend more on health care than their annual mortgage payment.

Increases in health care costs, which the federal government says rose to $2.6 trillion in 2011, are squeezing employers, workers, families and government budgets every year, according to Young. But interestingly, the growth in health care spending declined in 2009 and 2010 to just under four percent, although, Merrill Mathews writes that President Obama’s health care law – if it survives – may reverse things again.

What’s some people’s answer? Going without insurance. My husband doesn’t think that he’ll live forever, but he eats right, exercises and gets enough sleep and has been mostly healthy his 62 years. He’s hoping he can hold out, without insurance until Medicare. I hope he can.

But almost 50 million Americans had no health insurance as of the 2010 census, according to Young and more people are putting off elective surgery they might really need because of cost. Employees are also being asked to pay more in premiums and co-pays even with employer-sponsored healthcare, and seeing their benefits wither. In addition, more companies are ending coverage for workers.  And somehow, in spite of all the spending, the quality of our health care lags behind other industrialized countries, ranking last of the top seven nations.

"The rate of increase is not as high as in the past but total dollar increase was still a record," Young writes the report says. "The dollar amount of the increase overshadows any relief consumers might derive from the slowing percentage increase." The health care reform law enacted by President Barack Obama in 2010 "has had only a limited effect" on health care costs, the report continues.

And what about President Obama’s health reform act? My husband hates it, feeling it will come out of healthcare providers’ pockets. Yes, the uninsured will have insurance. But at what cost, he asks, pointing to the patients he gets $4 for doing a filling under a similar plan, making many not willing to take on those patients.

Not surprisingly, the New York metropolitan area has some of the highest costs of both health care and insurance, according to the report. You hate to be without it, especially in my case where I have a pre-existing condition, having survived cancer twice, but we are almost thinking of going without it and taking our chances. Or stopping it for our healthy child. But who wants to tempt fate? It seems there’s just no easy answer.

Edited by Rich Steeves

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