I learned more than I ever wanted to know about health insurance last year. This had a lot less to do with the great national debate than it did with my own family situation. In 2009, due to a perfect storm of empty nests, college graduations and job transitions, I suddenly had to find out how it all works.
Before then I had worked for the same company for thirty years. I joined the company, had medical insurance, and didn’t think about it too much except for the annual grumping. Yeah, I complained when we had to start contributing to the coverage, and I complained when we had to figure out which plan to choose, and I complained each year when the cost went up.
I truly didn’t know how good I had it.
In 2009, it became very clear to me why so many people are without medical insurance. Here are my top four reasons:
1. Medical insurance is way too expensive – When I left my job I was offered a transitional plan to continue my current coverage at the same cost (to me) for twelve months. (If you find yourself in a similar situation jump on this deal, it’s the best you will get.) I really thought $300 a month to cover two kids and myself was expensive. It is. But the total cost of the plan (via a straight COBRA option) was closer to $1000 a month. Sure, there are public plans out there if you can qualify (i.e. you have no pre-existing conditions), but they either provide little coverage, or they cost at least twice what I was looking at for the COBRA option. Ouch!
I was very lucky to have access to that transitional plan.
2. Recent graduates are particularly vulnerable to finding themselves uncovered - Fulltime students can be covered until age 23 as a dependent. With my oldest son graduating from college in 2009, I could cover him through the end of the year on my plan, and then he was on his own. In today’s job market, many college graduates will find themselves without access to a medical plan. Those who don’t head off to college are even less likely to have access to a company-sponsored plan. Sure, he’s young, and he’s healthy. But – he drives a car, and he plays sports, and occasionally he crosses the street. Lack of coverage is not worth the risk.
We are very lucky. He landed his own corporate job with his own corporate sponsored medical benefits.
3. Early retirees and older employees who lose their jobs are particularly vulnerable to being priced out - Access to a plan is the first big hurdle, and being able to retire from a big corporation, I do have access to medical benefits – but without the big employee subsidy. As an early retiree, I have a medical account where my company put money aside for me to cover the cost of insurance prior to being able to qualify for Medicare. To cover just myself under the retiree rates (more than double what it cost me to cover myself and two dependents as an employee), this account doesn’t go far. It will last me no more than four years. But (and this is a big but) if I use up every penny in this account I will no longer be eligible to participate in that corporate plan.
Those who have to go outside for coverage, as so many who lost their jobs do, will find outrageously high price tickets (due to the age pool) if (and that’s a big if) they can qualify at all! Short of keeping your job and your medical coverage for as long as possible, the only solution for this group today is to not get sick.
I am very lucky. I could be covered under my spouse’s plan, at a considerably lower cost than my retiree plan.
4. It’s way too complicated – The rules are not designed to help you, or to keep you healthy. I have a stack of medical insurance notifications that I have received in the mail over the past year about four inches high. Some days I received two packages – often contradictory. I logged dozens of hours with my ex-corporation’s benefits department over the past year. I called to select the transition benefits. I called to find out how long my son was covered and then again to take him off my plan. I called when I was trying to decide whether to continue coverage for my second son on my plan or to cover him under his university plan. It turns out his college has a plan at a great price due to the younger/healthier insurance pool. (If you have college-aged children who need coverage this is definitely something to check out!) I called to find out if I can come back to my retiree plan in a later year if I opt out this year. The answer was yes – as long as I can show I had other coverage during that time, and as long as I still have at least $1 in the medical account I mentioned above. Each time I called I learned something new. And each time I called I learn more about ‘qualifying status changes’, and things to watch out for. It’s very murky territory.
What is clear is that there is nothing easy or straightforward about this topic.
Did you notice how many times I used the word ‘lucky’ in this article? I am comfortable with the coverage my family has for the time being. I wish I could say this is due to great planning or hard work or intelligence on my part. It’s not. It really is all about the circumstances.
Share your health insurance stories, and any ideas to navigate this …um… mess… here.
Reminder - today is the last day to enter the WFWF Bad Boss Contest. A big thanks to everyone who entered so far. As I suspected, there are some pretty bad bosses out there! Finalists will be notified by e-mail on Sunday. Check back Monday (yes, I said Monday) to see the first of the finalist stories. There will be guest posts all week next week, and next Friday you'll be able to vote for your favorite!