In many areas where there is an expensive option and a cheap option the car metaphor is a standard way to set up the comparison of the products. The computer or stereo sales person will likely show you the top of the line "this is the cadillac" and then maybe something in the middle "this is the Chevy" and then finally a real cheap POS (this is the Hundai, Kia, etc).

Of course in the healthcare debate the differences between health plans arent being discussed enough. The Cadillac isnt really "better" if you consider its cost...its simply less inconvenient and wont leave you in debt if you get hit with big cost medical care. It also places few if any limits on what it will pay for....that semi-experimental cancer treatment is withing reach and the local health club membership is part of the plan.

So what about the Chevy plan? The typical Blue Cross/Blue Shield HMO plan for a family in MA is about $1200 a month or about $14,000 per year and note that is the REAL cost, not what most people pay for it where they work. It has limits but not something you are likely to encounter unless you are seeking experimental medical treatment or expect a lot of perks like free gym memberships. It is not asking for an unreasonabe copayment and it is generally not going to take too much out of my paycheck if my employer pays 50% or more of that premium. It has reasonable copayments of about $20 for each visit to a doctor. While I dont complain about the plans quality I know that if I suddenly had to come up with that $1200 a month I couldnt and most people I know couldnt.

The insurance plans out there which are reasonable in terms of premium offer signficantly higher copayments and often dont cover a lot of things. Typically these plans are $5-600 a month for a family plan. They generally pay ZERO unless you are in the hospital and then only about 80% of the bill after a deductable which ranges from $5-10,000 of your money. Outpatient care is also generally pretty close to being cash and carry. In other words it is like having a coupon for catastrophic injury or illness but otherwise damn close to not having insurance at all. This would be your "cheap" plan.

Now I should point out that there are many many plans out there which have unusual membership requirements or exclusions which affect their costs but these plans are rarely available to the public at large. The quality of the plans is usually somewhere between the chevy and the Kia in terms of cost and quality but not available to most people. So yes, your minister or your boss might proudly say he has a reasonable priced insurance and it doesnt completely suck....but chances are you couldnt get it.

The fact remains that human health is unpredictable. Sure, you can look at odds and there are things you can do to minimize risk, but the risk is always there.....very healthy people really do have heart attacks and other people drink, smoke, and live well into their nineties. The point is that all the number crunching in the world cannot develop a comprehensive solution to a problem with such a variable subject. Trying to slice and dice the coverages, costs, and risks when we are discusing health care is the problem--ask anyone who has ever been denied coverage or been charged more premiums...exceptions are a rule in insurance. The problem is we are seeking to cover everything and everyone and therefore there arent supposed to be any more exceptions. That is why so many nations have simply gone to single payer systems.

Its not about cadillacs and chevys.....both break down.

That's not a bad summary; however, you're not really factoring in HSA/HDHP policies which don't really fit into the Cadillac vs. Chevy mold. I really like my plan through work because it's simple and I know what my responsibilities are with it. I pay 100% out of pocket until I reach my deductible of $2,500. After that, it kicks in and covers 100% of costs.

I used to have a traditional PPO (a run of the mill BC/BS policy) and between co-pays, the deductible, the 80/20 breakdown, etc. it seemed like a crapshoot to determine what I'd pay for when the EOB came around.

Two problems there.

The HSA is a crap shoot....maybe you can save up enough and maybe you get hit before you can save much.

Secondly, $2500 is a lot of out of pocket expense for a good number of people. People living paycheck to paycheck are unlikely to easily save that amount easily and to refer back to the HSA, they have largely been a failure as much of the population has so much debt and so many bills (with less credit available) that the savings element is a little much to manage.

Insurance is not a logic or a business based thing. People get hurt or sick when they get hurt or sick and there is no telling if it will be at a financially convenient time or not.

I think a better way to approach the reality of the problem would be to make 100% of all medical,dental, prescription, OTC drugs, and vision deductable. Today you can rack up a lot of out of pocket expenses and you see no benefit. It's absolutely amazing that I can write off my mortgage interest but not the medical bills that might keep me from paying the mortgage.....

Yeah, it's definitely a lot of money for the deductible. When compared to a PPO/HMO, for many it can work out to be cheaper even when you factor in the deductible.

At my office, the lowest PPO plan has a $750 deductible and a (I believe) a $1,250 out-of-pocket maximum. The premium (paid by employee) is also about a $100/month more expensive than the HSA plan. Not counting the inherent tax advantages of an HSA, the total cost of a cheap PPO vs. an HSA are virtually identical.

For an HSA to work, people have to be vigilant in regards to their contributions. In my case, the premium was significantly less than the traditional PPO, so I just put the difference directly into my HSA. Unfortunately, I have several co-workers who simply picked the HSA/HDHP plan because it was cheap and never caught up with the HSA contributions.

Over the course of the year, I also have a significant tax advantage to use my HSA, because there is a laundry list of what it can be used for (essentially anything medically-related, as deemed by the IRS). In a year, I spend a surprisingly large amount money on things like eyeglasses, dental care, prescriptions, over-the-counter drugs, etc. This is all tax free when paid for through an HSA but would otherwise be taxable.

I'm very happy with my plan and am a bit disappointed that all signs point towards them being done away with the pending reform.

KB i am also signing up for my HSA plan. I need an employee +1 plan and for a young healthy couple the HSA plan is clearly better, especially since my employer deposits $1K into the HSA account. The deductible is also 2,500 (for the 2 of us), but an annual exam is covered. Dental and vision is already covered through add-on very cheap plans (like 10 a month). The out of pocket cap is 5K. Thus between the 1K my employer provides for the account and the 5K cap, at worst we will be hit with 4K - highly unpleasant but not devastating for your average 2-income middle class family. Also, we would owe this money only if someone ended up hospitalized or required a major procedure, where as with the PPO we would pay 300 a month no matter what (compare to 130 for the HSA plan) and would still face a deductable of 1K, and not have HSA benefits.

HSA plans are not for older and sicker people or for those with small children, but they are great for younger, healthy ones. Also, I buy my prescription from Canada (although it can not be reimbursed through the HSA) - years supply for about 220, where as i would pay 70 a month here before my diductable ran out.

You do know that technically purchasing your drugs in Canada is illegal right? I know it goes on and I know it is hardly ever enforced, but it remains technically illegal.

As to your point about the young couples not needing a PPO, that is a clear example of what so many people just dont get....sure, you can play the odds and more than likely you will win...but what if unexpectedly you get in a car crash or that nice young couple has an ooops and you will soon be that nice young family sooner than you planned? Life is just filled with unexpected turns of events and all too often people try and gamble......if you lose, we all lose....health is NEVER a sure bet. NEVER.

RML:

Its been a bit. You did do a nice job on this post and I can't disagree with your thoughts here. I think revrick has it right though, those without insurance . . . take a bus and go to the hospital ER.

My insurance plan for now is the castatrophic one at about $145/month with a 70-30% (I would declare bankruptcy). Cobra for me would have been $600/month and would have zoomed up to $800/month once Cobra ended. I thought there mignt be a doctor discount to this plan since it was BCBS? Nope, you are on your own for that too at ~$180/visit and it doesn't go against your deductible. The plan is basically the last ditch effort before the coffin (which is all paid for by-the-way). Personally, I would have a tough time telling allowing my family to bankrupt themselves to pay a system that extorts money from the sick, elderly, and young.

Thank god or myself, I am pretty damn healthy.

Sorry to hear that Run.

I lost my health insurance once during the 2002 mini recession and COBRA would have cost me $1200 a month because I have kids. My choice was clear--pay the mortgage or get insurance--I couldnt do both.

We were a reasonably young couple at the time and not in especially poor health, but as fate had it, My wife had serious internal pain one day and was soon in the ER with emergency gall bladder surgery to follow.....outpatient surgery with a $20K plus bill (and it was only because we were technically poor with me on unemployment and her working part time for Catholic Charities (worst work to pay ration I have ever seen)

Within a month the hospital and various collection agencies wanted the full $20K in one year or less...Becasue we owned a home (although the bank would tell you not yet) we didnt qualify as poor enough for a program...one asshole even told me to sell the house and pay my medical bills.

As I said before, you need insurance the most when you need it, not when everything is hunky dory. No one at these teabag rallies is poor or lacking insurance.

RML:

everything else is speculation. Private healthcare insurance can disappear in the blink of an eye which most people do not understand. They argue about the quality of it in comparison to a public option without any realization of reality. Its still a "I got mine world."

No need to feel bad for me. Like I said I am healthy and there a re far worst-off in this world today. I'll get healthcare eventually if not a public option than a private option. I do need to write the VA and see if they will not let me in the door for private visits.

I will share a bit of the future with you as put out by the Urban Institute. It is alarming:

Key Findings:

1. In the worst-case scenario, the number of uninsured Americans would increase to 57.7 million in 2014 and to 65.7 million in 2019. In the best case the number of uninsured grows to 53.1 million in 2014 and 57.0 million in 2019. All of these estimates assume that states would continue to maintain current eligibility levels for public coverage. Without this, the number of uninsured would be even higher.

2. In all three scenarios, we see a decline in ESI coverage rates. The ESI rate would fall from 56.1 percent in 2009 to 49.2 percent in 2019 in the worst scenario and to 53.9 percent in the best case.

3. Under all three scenarios, there would be substantial increases in employer premiums for businesses of all sizes. We estimate that employer spending on premiums would increase from $429.8 billion in 2009 to $885.1 billion in 2019 in the worst-case scenario and $740.6 billion in the best case.

4. Individual and family spending would increase significantly—from $326.4 billion in 2009 to $548.4 billion in 2019 in the worst-case scenario and to $476.2 billion in the best case.

5. Medicaid and CHIP coverage would increase substantially with enrollment increasing from 16.5 percent of the population in 2009 to 20.3 percent in 2019 in the worst-case scenario, an increase of 13.3 million more Americans covered under public programs. Even in the best case, enrollment would increase to 18.3 percent of the population.

6. Medicaid and CHIP expenditures would grow substantially both because of increased enrollment and because of higher health care costs. In the worst-case scenario, Medicaid and CHIP spending for the non-elderly would increase from $251.2 billion in 2009 to $519.7 billion in 2019. In the best case, spending would increase by 60.7 percent to $403.8 billion.

7. The cost of uncompensated care would also increase as much as 128 percent in the worst-case scenario and by 72 percent in the best case. Together with the increased spending for Medicaid and CHIP, this would inevitably mean higher taxes even without reform. <link> "The Cost of the Failure to Reform Healthcare"

As presented in a worst, internediate, and best case scenario. There is no hint the situation will get better and will indeed get worst.

I get pretty tired of defending the logic of doing something rather than staying status quo. I hope when they do the public option, all of the federal government (Senate, Reps, etc.) go on it. We will be guaranteed the best of healthcare then.

I have had my go-arounds with hospitals/doctors businesses also. Fuckem!

This whole idea makes me sick. I'm 62 yrs old, in a group plan and pay $9,800 for a $2,500 deductible plan with $25 copays. It does include dental and limited vision coverage (not glasses only tests).

I tried to get an individual plan. Many insurance companies won't even give me a quote. I did qualify for one company BCBS which is the same company that I have my group coverage. They quoted me $24,000 per year for $1,000 deductible. If I wanted the "Cadillac Plan" with $100 deductible, the cost would be $31,200 per year ($2,600/month). I live in the Midwest, I'm sure costs would be higher in NY or CA, but maybe I could make more money there?

So because I'm old and have high blood pressure, I get stuck with this stupid excise tax. I would go for a plan with $5,000 deductible but that one cost $7,700/year and did not cover prescriptions. Without prescription coverage, my drug cost would be $3,500/year. Great, I can change plans to avoid the excise tax and pay $1,400 per year more for less coverage. Doh!

As usual the people in Washington don't have the slightest idea of what life is really like out of the public sector. My next writing will be to my Congressman and Senators.