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 health insurance coverage, 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 - especially managerial and executive level effort - 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, 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, $5000.00, $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.