Health insurance is not sustainable
If the last five years are indicative, my family will be paying $90,000 for health insurance in five years.
Note this is not for medical expenses; this estimate is for the cost of health insurance alone.
You may think the high rates are because of serious health issues. Not true. I have been blessed with a healthy family. The five of us, including my three daughters who are now teenagers, have had very few needs for medical services over the last 13 years.
Consequently, we purchase the least expensive health insurance available: major medical insurance with a large deductible in excess of $10,000.
We are one of the families that buy health insurance on the open market, which we have been doing for about 13 years. In our case, I am self-employed and neither my wife nor I are affiliated with a company that provides health insurance.
I have been satisfied with our health insurance strategy until the trend of the last five years.
Here is what’s alarming …
Over the last five years, our health insurance premiums have risen 353%, from $365 per month in 2012 to $1,655 per month in 2017 (just got the letter from my insurance company of the new rate).
That’s an average increase of over 35% in each of the last five years.
On an annual basis, we paid $4,380 in 2012 and will pay $19,856 in 2017 for health insurance. Of course, to get these “inexpensive” premiums, we have a high deductible of $14,100 in 2017. Which means, we will likely pay almost $34,000 before we get coverage under our health insurance. And this is the cheapest insurance that is available.
And here is what is terrifying … and absurdly insane …
As I look toward estimating our future health insurance costs, and continue that average annual increase of 35% into the future (and I have no reason to believe or trust it will be anything different … do you?), then in five years, we’ll be paying $7,500 per month or $90,000 for the year for health insurance. In 10 years, we’ll be paying $34,000 per month or $408,000 for the year for health insurance. To amplify the absurdity, in 13 years, we’ll pay $84,000 per month or over $1,000,000 per year for health insurance.
Even if the average rate of increase drops to half that amount (17.5%), then in five years, we’ll be paying $3,700 per month or $44,000 for the year for health insurance. In 10 years, we’ll be paying $8,400 per month or $100,000 for the year for health insurance. Still terrifying, still absurd and still insane.
Remember, all of these costs are for health insurance alone. All medical costs are additional, at least until the deductible is reached. We had our first experience of going to the emergency room recently (as I said, we have been blessed) when my youngest daughter was bucked off a horse and broke her wrist. To my surprise, using no more sophisticated technology than x-rays, a cast and pain medication, this visit will cost our family more than $6,000 out of pocket.
As a father, husband and individual, I am not seeing a clear, rational path through this insanity.
Cancelling our family’s health insurance has begun to seem less risky than the assured loss of the cost of the insurance. How much am I, and are we, willing to pay for health insurance? … where does the cost exceed the expected benefit? Am I, are you, willing and able to spend 20% of your income on it? … 30%? … 40%? Where do you draw the line?
