Health insurance costs went up this year. Mine went up 24%, which I understand is lower than many experienced. The increases are entirely the result of the so-called “Patient Protection and Affordable Care Act” (PPACA), otherwise known as “Obama Care.” The official name is misleading and untrue as it has neither protected patients nor made healthcare more affordable.
Assuming a 24% increase I used the back of a napkin to compute approximately how much Obama Care is costing America and the average American:
$2.5 trillion (approximate U.S. spending on healthcare in 2009)
64% (Spending by private health insurance) Insurance costs more than this because companies have overhead and make a profit.
24% (my rise in insurance costs)
$384 billion increase in insurance costs for America.
312,741,601 (US Population)
$1,227.85 increase in insurance costs for the average American
President Obama wants to give every American an extra $1,000 by raiding the Social Security Trust funding for another year. His hypocrisy is made more clear by the thought that if Social Security were privatized he would be raiding your private retirement to give it to you now in order to encourage you to spend it early and boost the economy to help get himself re-elected. Had he not pushed his healthcare plan through over the top of Republican opposition you would not need the extra $1,227.85 each year to pay your increased medical insurance costs.
My coverage (for a family of four) increased from $352.00 to $437.00 a month. If you are wondering why that is so low, it is because we have a High Deductible Health Plan (HDHP) along with a Health Savings Account (HSA). That coverage provides us with a $3,500 deductible and then coverage at 100% after that. We’ve never come close to our deductible, but even if we did, our maximum out of pocket expense would be: $8,744 ($437 x 12 + $3,500). Most years our coverage is closer to $5,244 ($437 x 12).
Average health care premiums for non-HDHP+HSA coverage rose to $10,944 for employers and $4,129 for workers for a total of $15,073 in 2011. HSAs are a better deal for healthy Americans. Why pay $15,073 when you can max your out of pocket expenses at $8,744? Most healthcare costs are on account of life-style choices. Avoiding destructive lifestyle choices saves money.
Here are some of the articles which describe how HSAs work:
If the high cost of healthcare is sinking your business, talk to a comprehensive fee-only financial planner and learn how each employee can own their own health care insurance.
This blog post is part of “The Economics Of Healthcare series“.