Health Insurance- The Real Costs

Health Choice – What are the real costs?

In this contract year the company has made it clear they want to stick the management health care plan on us. I have some real questions as to what this plan really is. The more I look, it seems less a health-care plan and more a simple catastrophic plan. In other words, a plan that basically starts paying when you run out of money.

Let’s look at a simple, common medical cost, having a baby. Expect to pay anywhere from $5,000 to $7,000+ on top on the payroll contributions. Combine the two costs together and someone making $50k - $75K will be spending 10% - 15% of their salary on this single child. God forbid there be two births involved, don’t forget about dependents now covered to age 26……time for a second job?

Here’s an example from GE’s own site that will show the costs more realistically. While the cost of a baby will be spread out over several months, let’s look at someone having a bad month. It’s January 2012 and, lets call our employee “Joe”. On January 5 Joe visits the Doctor for a sore throat -$200.00 out of pocket. On January 12 Joe refills his cholesterol prescription - $400.00 out of pocket. On January 17 Joe breaks his leg - $2155.00 out of pocket and that is just the hospital bill.
For some reason the company only put in the hospital costs for the broken leg, other known expenses like the Doctors bill, ambulance ride, follow-up care, all of which will be needed, were not included. But I think everyone gets the point, Joe’s out of pocket expenses for January were $2755.00 plus the Doctors bill, ambulance ride and follow-up care. Joe better hope February is better. It might be wise to hide his kids skiing equipment though that may be a moot point, as Joe could probably no longer afford the lift tickets anyway.

When will the Management plan actually start to resemble our current plan? When you’ve spent enough money.

Joe is married with children and makes $75,000/year (not an unusual amount due to the company’s refusal to hire over the past year and the resultant overtime just to keep the work here). Joe’s wife turned down the health-care plan at her job (who wants to pay for two plans?).

From the GE web site, annual out of pocket costs, including payroll contributions:

Option 1 = $11,027.00 – 14.7% of pay

Option 2 = $12,152.00 – 16.2% of pay

Option 3 = $12,152.00 – 16.2% of pay

These figures do not include the company funded HRA, $.5k - $1.5k annually for options 1 + 2 only, as I fully expect the company to drop them in future contracts and I believe history will back me up here.

Do not forget that Doctors and Hospitals, like anyone else selling a service, want their money upfront. Don’t have that kind of money just lying around? Not to worry, GE has considered this through GE Money under a program called CareCredit. If your Doctor or Hospital participates, you can just charge the service with CareCredit, at an APR that would make Tony Soprano proud, 26.99%. But I’m sure their motives are pure, to quote their website:

“Why do doctors offer CareCredit?

Many patients put off treatments and procedures because they cannot afford to pay”

This is the kind of benevolence that will put us all into the poor house.