Mathematically: Insurance is a pooled risk program. For the insureds, the pool works better the larger it is and the more representative of the population of a whole. In the arena of health care, where there does seem to be a general consensus towards the necessity of universal health insurance coverage (100% of the population covered), having private insurance breaks these pools apart, decreasing their financial stability, increasing the costs on the enrollees, and imposes additional costs by the duplication of effort - from staff to executive - needed to run 6+ major insurance organizations instead of 1.
Personal: Delores Claireborne works at The Texas Mental Health Association, a non-profit which is the major mental health services provider for a three-county area in Texas centered around Cotulla. Delores gets paid 26 times per year, has 1 child, and per her divorce agreement from that drunken bastard, has to provide the child with health insurance.
Delores has the following employee+child options (Plan, per paycheck cost, annual premium, deductible, Out of Pocket Max, amount paid out of pocket before insurance covers 100% of medical expenses)
- High Deductible, $234.06, $6,085.56, $5,000.00, $5,000, $11,085.56)
- Medium Deductible, $295.34, $7,678.84, $2,500, $5,500, $13,178.84)
- Low Deductible, $362.57, $9,426.82, $1,000, $4,000, $13,426.82)
Oh, in addition to this, her employer covers $4,919.78 for her medical and life insurance. Group life is $20/month/enrollee (it’s cheap), so the employer pays, in addition to the 2nd item in each of the rows above, $4,679.78.
Total cost of insurance if Delores never goes to the doctor and has the cheapest plan: $10,765.34 ($6,085.56 out of Delores’s pocket)
Total cost of insurance if Delores has $5,000 of expenses: $15,765.34 ($11,085.56 out of Delores’s pocket)
Total cost of insurance if Delores has $700,000 of expenses: $15,765.34 ($11,085.56 out of Delores’s pocket)
Median household income in Cotulla is $34,567 - Delores earns $40k pre-tax, $37,500 after tax.
Out of pocket health insurance premium as a % of take-home income: 16.22%
Out of pocket health insurance as a % of take-home income, assuming Delores hits the out of pocket max: 29.56%
Notes:
- These are real numbers. Names are made up, I mixed and matched clients, we do business in Cotulla but not with anything called “Texas Mental… whatever”. But the numbers are real.
- This is, in no way, unusual for small business group medical insurance rates for the state of Texas.
- The employer is rather generous here - they effectively pay for the employees insurance*, meaning this is the cost to cover her 1 child.
- The most expensive plan: $763.20 per pay period, $19,843.20, annually for employee, $24,522.98 total annual premium
The above is repeated… 4.7 million times… across Texas.
That’s my argument against.