Basic Insurance for Basically Healthy People is Cheap
It costs half of what traditional insurance costs and for one-third that amount, low-income employees will buy it. So-called 3-Share insurance works like this:
In Galveston, Texas, the University of Texas Medical Branch….. covers 20 doctor visits a year, maternity care, visits to the emergency room, medical imaging such as CT scans and MRIs, and surgery……
Traditional insurance last year cost on average $382 a month per employee at businesses with fewer than 200 workers, according to Kaiser. The total cost for the UTMB plan is $180 a month. Employers and workers each pay $60 of that, and the rest is paid for by UTMB and the Houston Endowment, a philanthropic foundation.
Interesting.
So much for the idea that we need to spend zillions of dollars to insure the uninsured.
The policy described in this article has a lifetime cap of $250,000, a very limited physician network, very limited benefits, and does not provide coverage outside a specific area.
For $135 a month, a 40 year old woman living in Galveston could buy a HumanaOne HSA qualified policy with a $5,200 deductible, a $2 million cap, a nationwide network, and no expenses after the deductible is met.
For $62 a month the same woman could purchase a PPO plan from BlueCross/BlueShield with a $5,000 deductible. The $70 a month savings will pay for a number of physician visits. The $120 a month savings compared to the UMB plan will pay for even more.
For $169 a month Cigna offers a plan that has $30 copays for primary care visits, $60 copays for specialist visits, drug coverage and a $5 million cap. If covers flu shots and labs, an annual pap smear and mammogram. Still less than the three share plan quoted here.
These numbers are from ehealthinsurance.com in April 2009. They suggest that the three share rates are nothing special. Kaiser says health insurance is $382 a month for small businesses. Apparently a lot of people, including those at the Wall Street Journal, don’t yet understand that substantial savings are available to those who think outside the model of business provided health insurance.
How many people would actually qualify for the $62 Blue Cross policy at the quoted price? Is it possible that some of these quotes are effectively ‘teasers’?
At those rates, it would make sense to decline employer coverage and try to negotiate a higher salary to cover the private premium, and to hell with the tax consequences.
If coverage is widely available at those prices, it’s not even worth trying to reform the employer tax exclusion. If everyone bails out of employer-sponsored coverage, there will be nothing left to exclude.
I lean towards Linda Gorman’s interpretation: This is really a beefed up mini-med plan that insures the wrong “end” of medical spending, i.e. the “front end” not the “back end” of catastrophic costs. The reporter missed that.
To its credit, let’s note that the plan is subsidised by a philanthropic foundation, and not taxpayers. For those of us who advocate consumer-driven care, and would prefer these costs to be funded out-of-pocket with pre-tax dollars, I’m not sure how a philanthropist would fund them otherwise. If they gave cash to the beneficiaries, how would they audit the spending?
In my experience, trying to negotiate higher salaries is exactly what prospective employees do when employers don’t offer health insurance. However, a surprising number of people have no idea that they can actually buy health insurance themselves if their employer doesn’t.
Articles like this one don’t help reduce the zone of ignorance.
Recently I read J. Goodman’s March article in Imprimis (a Hillsdale College publication). As he stated, families used to take care of their own and it was not the responsibility of government. Interesting what the Bible says, “Anyone who won’t take care for his own relatives when they need help, especially those living in his own family, has no right to say he is a Christian”. 1Timothy5:8. So much of our problem would be solved if we followed this tenent and it could give many of us our “basic assurance”. Many, many years ago in the Jewish culture one could abdicate his responsibility of caring for his parents or family by declaring that money to be Corban, or a gift to God.Mark7:11. In many cases today we are abdicating or responsibility to the new god, Government.
We need all of our large health systems to offer this type of insurance and for risk pooling sake link them up-heck! While you’re at it throw in the VA. Let’s knock these insurance stiffs off of their high horse.
My Buddy Dr Bill McGuire(ex ceo of United health) needs something to do, so he and I will administer the plan for a small fee, how does 148 million sound? Bill likes that kind of compensation-he’s worth it, just like our medicare spending.
Linda is correct the cost is low for non-employer-based coverage. Some people will be declined, have rate ups or have exclusions.
But that is exactly the reason that those on non-portable employer-based coverage have no security.
All employees should sign a WARNING that they understand that if they get a head full of tumors and cannot work, they will be put to a short term COBRA for insurance termination.
For a few dollars more that $135 HSA premium would cover Rx with a lifetime max to $5 million. You shouldn’t compare these 3-Share programs to real insurance.
LInda: thanks for your comments on this post.
The issue at hand is that small businesses, those with fewer than 50 employees, are unable to afford traditional insurance. Being that a large portion of small business employees fall below poverty level, the 3-Share plan would provide provide preventive and primary care coverage at affordable rates. I would agree that the 3 share-plan is rather limited. However, if I had a choice in the matter, I would enroll in a 3 share plan than go uninsured. Who knows, maybe preventative care from routine physical examinations from a primary care provider will prevent myself from undergoing a catastrophic heart attack.
I don’t have insurance, but will get it in about a month. that’s just for emrieencegs. I usually go to Mexico for treatment. At least there I get a straight answer not another I don’t know. I only went to med school for 4 years.