Is having healthcare insurance worth it anymore?
Depends on what type of healthcare insurance you can get!
Many Americans find themselves asking this very question every time they get a bill from their doctor’s office. The answer is clearly yes, if you’re one of the fortunate 160M Americans, or roughly 50%, who get their insurance from their employers…through so called Group Insurance. For these folks, their employer foots three-fourth of the cost…believe it or not. Even so, these lucky souls still have increasing premiums each year (the amount you pay to the insurance company), rising co-pays and co-insurance (the out-of-pocket costs you pay each time you see a doctor or have something done)…and high and higher deductibles (the total out-of-pocket you have to pay before the insurance kicks in a penny). The table below shows how insurance works for those with good jobs and good healthcare coverage.
As you can see, both the amount employees pay and their percentage of the total cost of healthcare premiums is increasing. Specifically, in 2019, employees paid $6k or 29% of the total cost of the premium to their insurance companies. Employers kicked in the other $14k, in 2019, or 71% of the total premium. However, over the last ten years, employees have seen their portion rise from $3,500 in 2009 to over $6,000…that’s a 71% increase. Meanwhile, employers’ contributions have only increased by 48% during that same time period.
Now let’s turn to the hidden out-of-pocket costs of insurance, even for those with the so-called good Group Insurance. Over the past decade, insurance companies have increasingly offered plans with lots of hidden costs in addition to those hefty premiums you pay every month. These seem complicated, but really fall into three buckets: Co-pays, Co-insurance and Deductibles. Simply put, Co-pays are the little amounts you have to pay each time you go see a doctor…usually anywhere from $5 to $25. These are more annoying than anything else, but they still add up. Next, is the harder to understand Co-insurance. This is the amount of the bill you split with the insurance company. Usually this could range anywhere from you paying 20% - 80% of the bill, depending on whether the provider is a part of the insurance company’s network or the type of procedure you need. This can really add up…and even worse…the Co-insurance doesn’t kick in until you’ve met your dreaded deductible. The deductible is the worst kept secret in the insurance industry…it’s the total amount you have to pay before the insurance kicks in anything. Isn’t that nuts…you pay thousands of dollars for the privilege to pay thousands more before your insurance company pays anything? Deductibles have gotten higher, and higher to the point where these plans are now referred to simply as High Deductible Health Plans (“HDHPs”). For perspective, in 2014, 20% of employees had HDHPs. In 2019, that grew to 30%. Even worse, the HDHPs with deductible over $2,000 grew from 18% of the total to 28% since 2014. There’s even a holiday now called Deductible Day…the day of the year most American’s meet their deductible…in 2019 it was May 19…I’m not making this up.
Bottomline, even if you have great insurance…you’re constantly being asked to pay more and more of the bill…either to the insurance company…or in terms of total out-of-pocket costs.