An example of health insurance calculations
I've come to think that most people, especially those who haven't come face to face with the beast, don't really know or haven't thought about the money issues that go into health insurance and health care. I did a little calculation using my own interesting example.
I worked for PPNYC for about a year and a half, say 20 months. During that time, I paid for health insurance, and so did my employer. After my little incident, I got about 6 months of medical leave/disability and the health insurance continued. Judging from my Cobra amount (which I thankfully didn't have to pay since I was getting health insurance again in a couple of months) we, my employer and I, paid about $550 per month for the privilege. So, in total, we paid about $14,300, or hell, simplify and say $14K.
I probably had a couple of visits with my primary doc and probably one gynecologist visit during this time. Then, my head exploded and I landed in the hospital for ten days. I received all the bills for my time there, all of them covered, thank Jebus. In total, the hospital, labs and individual doctors billed me about $110K to $120K and they were paid by my insurance somewhere to the tune of $10K or $11K. Just about 10% of the total bill, remember. So say all my other visits to doctors before the incident came to a payment of about $1 thousand. That means that, conservatively speaking, the insurance still made a profit on me of 2 thousand dollars. And that is an employee who only paid into the system for a little over two years and who also needed catastrophic care with ICU's, a bajillion labs, various highly paid specialists, etc.
There are two things of note here. One is the fact that they made a profit, even with what I described above. That shows us how well the insurance companies make their calculations. Please know that I had a very good insurance policy. The HR of the company negotiated for months with Aetna to get us good terms, good coverage, and a modest price, and they paid the large part of the policy themselves. I probably paid around a fifth or a quarter of the cost. Many people, like my whole family and now me as well, have it much worse, what with the out of pocket costs that they have to cover before the policy kicks in and the percentage covered and so on.
Thing two is the discrepancy in the actual "cost" of health care. The health insurance company paid about 10% of what was billed. That's because they have the power in this situation. They control the flow of money to the hospitals, doctors, and labs. Correspondingly, the health care providers know this and so bill outrageous prices in order to get something reasonable back. Someone without insurance or who is under-insured will get billed the same astronomical amount and they will be stuck with that bill. And who profits from that situation? The hospitals, doctors and labs who will never get paid this amount because most people just buckled under with health care costs like that? The individual, who will likely declare bankruptcy? It's really a lose-lose in that case. But the insurance companies will always win.
Just a thought.
I worked for PPNYC for about a year and a half, say 20 months. During that time, I paid for health insurance, and so did my employer. After my little incident, I got about 6 months of medical leave/disability and the health insurance continued. Judging from my Cobra amount (which I thankfully didn't have to pay since I was getting health insurance again in a couple of months) we, my employer and I, paid about $550 per month for the privilege. So, in total, we paid about $14,300, or hell, simplify and say $14K.
I probably had a couple of visits with my primary doc and probably one gynecologist visit during this time. Then, my head exploded and I landed in the hospital for ten days. I received all the bills for my time there, all of them covered, thank Jebus. In total, the hospital, labs and individual doctors billed me about $110K to $120K and they were paid by my insurance somewhere to the tune of $10K or $11K. Just about 10% of the total bill, remember. So say all my other visits to doctors before the incident came to a payment of about $1 thousand. That means that, conservatively speaking, the insurance still made a profit on me of 2 thousand dollars. And that is an employee who only paid into the system for a little over two years and who also needed catastrophic care with ICU's, a bajillion labs, various highly paid specialists, etc.
There are two things of note here. One is the fact that they made a profit, even with what I described above. That shows us how well the insurance companies make their calculations. Please know that I had a very good insurance policy. The HR of the company negotiated for months with Aetna to get us good terms, good coverage, and a modest price, and they paid the large part of the policy themselves. I probably paid around a fifth or a quarter of the cost. Many people, like my whole family and now me as well, have it much worse, what with the out of pocket costs that they have to cover before the policy kicks in and the percentage covered and so on.
Thing two is the discrepancy in the actual "cost" of health care. The health insurance company paid about 10% of what was billed. That's because they have the power in this situation. They control the flow of money to the hospitals, doctors, and labs. Correspondingly, the health care providers know this and so bill outrageous prices in order to get something reasonable back. Someone without insurance or who is under-insured will get billed the same astronomical amount and they will be stuck with that bill. And who profits from that situation? The hospitals, doctors and labs who will never get paid this amount because most people just buckled under with health care costs like that? The individual, who will likely declare bankruptcy? It's really a lose-lose in that case. But the insurance companies will always win.
Just a thought.