Health Insurance for Dummies

The H1B and I spent an evening this week trying to make sense of our new health insurance package. We have to reassess what we require because of the increases caused by Obamacare (aka, the Affordable Health Care Act).

In over-simplified terms because insurance companies now have to offer cover to everyone, with subsidised rates for those who couldn’t previously afford it, the same companies are recouping costs elsewhere.

Our health package will be going up from $155.40 every two weeks (most US companies pay bi-weekly rather monthly), to $250*.

$500 per month is quite a bite out of our budget – that’s a flight home or a weekend away, or our monthly food budget actually.

Admittedly, we have boosted some areas of our package. For example, we’ve upped our dental plan from basic to comprehensive, and opted for increases in the H1B’s life insurance payout and the evocative Accidental Death and Dismemberment clause.

With or without the hike in costs, the biggest decision to make is over deductibles, which are similar to the excess you might pay on your car insurance in the UK. That is, you dutifully pay your monthly premium but the insurance company will also make you pay the first £300 or so of the bill.

Thieves.

Likewise, if you go to the doc with a chronic chest infection in the USA, you have to pay a deductible before the insurance company cough up (pun intended) the cost of the examination and all the horse pills you’ll be over-prescribed.

So, the H1B and I had to decide whether to go for the Gold or Platinum package (it’s already starting to sound like Airmiles), with the latter being the superior package in terms of coverage and payout, plus it covers things like obstetrics and protection for dependents.

While the Platinum package costs us more in terms of cash every two weeks (about $39 more), our deductibles are much less.

EG: if the H1B needed a trip to the emergency department, like he did in the summer, and we guesstimate that the visit cost around $10,000, if we had the Gold package we’d have to pay $1200 in deductibles. If we went with the Platinum package, it would only be $250.

These figures don’t take include the mystery “co-pay” and “out-of-pocket maximum”, which you would also be charged.  (The H1B asked his insurance company why they exist and what they do, and the customer service rep couldn’t tell him.)

There are extra costs if you don’t want to go with the approved doctors  (car insurance works the same way in the UK – if you don’t use approved car mechanics or garages, your car insurance company is likely to charge you more – unless you go with an independent non-fault accident claims company, such as Vamco**).

And legal services cover. If you are a smoker, you pay more too.

I have a great deal of sympathy for the ordinary worker in this country. I don’t understand how a family with, say, a nurse and teacher as the breadwinners can actually afford health insurance. Most liberal thinkers agree, I’m sure, which is why Obamacare ever got anywhere near the House of Representatives (or was it the Senate – still working that one out).

In Britain, most take the NHS for granted – the wait times, the moody nurses, the unsympathetic GPs with their eight minute appointments – but really, we don’t know we’re born.

When was the last time you saw a cleft lip in the UK, or a club foot? Never, right? These are fairly common sights on the New York subway – people just can’t afford to get them fixed. Imagine the ordeal of someone in your family getting cancer and then having do deal with a bill for several thousands of dollars landing on your doormat.

Brits (me included, a few times, I’m sure) gripe about surgery visits for tonsilitis or a bad cold, but when something really bad happens – like the big C, or you’ve mangled your leg in machinery, or you’ve been run over by the proverbial bus – the NHS foots the bill and you’ll get the best care in the country from private doctors who have to work for the NHS too. We don’t have to think about it.

Obama is a visionary and a brave man for approaching the issue of a free health care system but when health insurance premiums are soaring for the majority of people living in the USA, it’s a bitter pill to swallow (if you can afford the deductible on the pill, of course).

PS: If you’d like to read a better analysis of Obamacare, and the health insurance in general, here are some recommended places to start (I tried to find non-partisan sources – not that easy when it comes to this political stink bomb):

*There is, of course, the issue of why we are even having to worry about paying for health care at all – it seems to be a basic part of the relocation package for most companies. We’ve had to wave several large, colourful flags in the faces of our employers to get them to think seriously about health care, pensions (we stand to lose a big chunk of our pension when we move back to the UK because of taxes), and the H1B is also missing out on some other bonuses (such as grade allowances for a company car), which he would have in the UK.

The most frustrating aspect is that I don’t believe these oversights aren’t down to lack of duty of care, just failure of process – the managers didn’t know the issues involved, and there doesn’t seem to be anyone in HR who actually grasps the implications of moving to a city like New York.

It would be interesting to hear your stories if you’ve been in a similar situation (if your experience, however, is a relocation package that includes a no-limit expense account at Crate & Barrel, free flights back home and a fully paid-up off-shore pension, you can keep that to yourself).

**Vamco is my dad’s business, which I help him out with from time to time; which is how I can I write about car insurance for any length of time without curling up my legs with boredom and falling on my back like a Raid-sprayed cockroach.

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