A year ago, when we were telling our friends and colleagues that I was leaving my teaching job in order to return to full-time work on the farm, the first question they would ask was about giving up our health care benefits. Increasingly, health care benefits seem to be the critical issue for many people about employment. Both my mother and mother-in-law continue to work into retirement age because of the high quality medical benefits they receive, and I know several people who would love to give up working for someone else and enter the satisfying realm of self-employment, but fear of not being able to afford health care stops them.
So it seems like a good time to share our story about health care, not because our story is especially unique or exemplary, but simply because sharing such details often seems taboo, like so many important aspects of our life (income, marriage problems, parenting difficulties… you name it). Why we cut ourselves off from sharing some of the most important practical details of our lives when we have so much to learn from each other is a puzzling paradox indeed. In so many areas, we’ve cut ourselves off from the support and wisdom that we can offer to each other, choosing instead to go it alone, groping in the dark out of embarrassment or habit when what we really need is a little shared light.
When we moved to Pennsylvania eight years ago, we signed up the whole family (just three of us at the time) for my employer’s offered health insurance. It was good coverage, but expensive. Of course, expensive is a relative term. I think we paid about $300 per month for the three of us, with my employer providing at least as much or more, so the real cost was something like $600 to $800 per month for the three of us. Considering we used the coverage infrequently, it seemed like a lot of money. By contrast, our car insurance ($100 or so per month) and my life insurance ($50 per month) seemed like a real deal.
And even though $300 per month for health insurance would seem cheap to many people today, it was more than we could afford. We had one income ($30,000 per year) and our budget was really tight. We went into debt and knew that we had to trim our expenses. Health insurance seemed like an area we could cut because we were healthy.
Somehow we found out about the Children’s Health Insurance Program (CHIP). Sort of like Medicaid for the slightly less poor, CHIP offered our first child (and later the next two) with high quality free medical insurance with no co-pays or deductible. Of course, to some, our enrollment in this program will be offensive. After all, why should someone else’s tax dollars be funding free insurance for our children? I’m not insensitive to this point. On the other hand, it was a real godsend for our family at a time when we could barely pay our bills without going into debt.
I stayed on my employer’s plan because for just me they paid the entire premium, which was generous. But enrolling Dillon would have cost something like $200 per month in addition, which we couldn’t afford, so we looked for alternatives. At the time, we found low cost, high-premium insurance for her for only about $60 per month. With a $5000 deductible, we would be paying for all of her medical expenses unless something major came up, but we had to weigh the costs and benefits, and it seemed unlikely that we would be spending more than the $200 per month which the insurance would cost us. Luckily, nothing major came up.
But the next year it did, because Dillon was pregnant again. Her low-cost insurance didn’t even cover pregnancy, so we would have been on our own. Except, now that Dillon was pregnant the income limits changed for Medicaid, and we just barely qualified. Dillon went on Medicaid, and like the kids, received coverage without copays or a deductible. Talk about a godsend. After the baby was born, she got tossed from Medicaid, and she went back on the cheap, high-deductible catastrophic insurance. We paid for bills out of pocket, but spent far less per year than we would have on my employer-offered coverage.
Two years later, when pregnant with our third child, Dillon once again went on Medicaid, and I can’t imagine what we would have done without it. Afterward, she went back on the low-cost, high-deductible insurance.
But even though it was a godsend for us, the interesting thing about Medicaid which few people know about, is that it is second-rate coverage. No doctor has to accept any given type of insurance, and since the government pays doctors less for Medicaid patients than most insurers pay, there is a serious disincentive for doctors to even accept medicaid insurance. What this means is that Medicaid patients have fewer doctors to choose from and might not be able to go to the best ones or those most in demand. In Dillon’s case, she received excellent care for her pregnancy, but I remember showing to a dentist I had been seeing the list of dentists in the area who accept Medicaid, and he thought so poorly of them, that he offered to see my wife and family for free rather than send us to one of them. So the reality about Medicaid, is that it is a second-class system and that the poorest among us often have to settle for second-rate medical care. And that’s a sad reality. It reminds me of VA patients who live in rural areas who have to travel more than an hour or two each way to see a VA-approved doctor. Is that really how we want to treat our veterans?
By this time, however, Obamacare was being enacted and we hoped that we would qualify for a subsidy to be able to afford higher quality insurance for Dillon. At the same time, we were thinking very seriously of leaving my teaching job so that we would be shopping for insurance for both of us. What we found was higher quality Blue Cross insurance, still with a high-deductible (about $5000 each), but with a monthly premium of $125 for two of us, after a government subsidy of around $200 per month. This was insurance we could afford, and we were willing to accept the risk of paying for most medical bills out of pocket, while having the assurance that if something catastrophic happened, we would be covered. If I was in an accident, for example, we would be out $5000 at the most.
What’s interesting to me is that even my employer-based insurance still had a deductible of around $1000, so even then I was paying most of my medical bills. I’d go for blood work and get a bill for $400. I’d go to a specialist, and get a bill for $500. So even though the school was paying something like $500 a month for my insurance, I was basically getting nothing for it and paying for everything anyway. The $120 a month insurance seemed like a great deal and made it much easier for me to leave my teaching job.
We now make about $50,000 per year, still modest by most standards but relatively comfortable for us. Our kids are still on CHIP (the income limit for our family size is $56K) and Dillon and I are comfortable with our low-cost, high-deductible insurance. Most years we spend about $500 each on medical expenses, for a total of about $2000 per year for insurance and expenses. Considering that many families spend triple or quadruple this amount, we feel blessed. It is true that we receive great generosity from the government from both CHIP and our subsidy, which (again) some would find objectionable. All I can say is that I don’t feel guilty, given that our economic system itself seems fundamentally unfair, weighted as it is in favor of those who have more. In our capitalist economy, wealth accumulation is exponential. That is, the more money people have, the more money they can make. The wealthy grow wealthier, and those with little have a hard time growing wealth at all, a strange economic system for a country that ostensibly prides itself on equality and social mobility. Is it not shocking that 15% of Americans are poor enough to be on food stamps? Of course, this is a reality hidden from us and made invisible since few of us interact much with the poor.
At the heart of our story and struggle with health insurance is another shocking fact: In our country, private health insurance companies are run as for-profit businesses. Of course, some would argue that such for-profit industry increases competition and keeps prices lower. I find this an ideological and rosy view. The truth is, to be for-profit, the insured have to lose out. The insurance companies have to take in more money than they pay out. For most people, insurance has to be a losing proposition. Perhaps this is the best way, but imagine if our police force were a for-profit business. What services would be cut? Who would be left out? Imagine if our road-building and paving were for-profit businesses. What areas would be neglected and left to decay? What if our military was a for-profit business? All of these government programs are deemed too important to be put under the forces of the marketplace. Is our health not considered as essential a benefit as police, or roads, or the military?
Of course, this raises the issue of why medical services are so expensive in the first place. This is surely a complicated story, but a major part of it is that doctors are compensated not by successful outcome, but by procedure. If a doctor orders an X-ray, he or she gets paid for the X-ray, regardless of whether it was necessary or makes a patient healthier. I have a friend who works in the ER who was once told by a doctor to perform an EKG on a dead man so that the hospital would be paid for it. Certainly that last example is a rare outlier, but still the system does nothing to discourage it. This is slowly changing. About 25% of payments to doctors are now based on quality rather than quantity of care. This percentage is increasing, but it is still a small percentage, and many hospitals and doctors resist it because it is less profitable for them.
Another reason for the high cost of medical procedures is insurance itself. Because insurance pays for many of our bills and keeps them somewhat hidden from us, there is a disincentive for us to shop around. If one hospital charges twice as much as another for an MRI, I’m unlikely even to know that. And since my insurance will probably be paying it anyway, there is little incentive for me to choose the cheaper MRI. In a way, hospitals can charge whatever they want for these services. What else do we pay for, only knowing the price after the fact? Do we buy a car, and then just get a bill in the mail? This is madness. If our car insurance paid for our gasoline, would we even look at the cost of gas at a given station before filling up? I’m sure if our car insurance started paying for our gas purchases, gas prices would grow exponentially. In this sense, I’m not sure we should even call it health insurance. What other insurance do we use on a regular basis? Car insurance we might use once every few years. Life insurance, hopefully never. Most insurance is cheap because it is rarely used. Perhaps we need a different term for health insurance since it’s not really operating as insurance typically does.
So in a way our health care system is shielded from market forces in certain ways, and based upon them in others. In both cases, it seems, we are the losers. Until Obamacare, we could also choose for philosophical or practical reasons to opt out of the system and not have coverage. Now of course it is mandatory. We were promised that costs would be lower under the ACA, but at least at the low end of the cost spectrum, costs have gone up. Before, we could get low cost insurance for $60 per person per month. Now, the cheapest unsubsidized covered is more than double that. Although average costs have risen more slowly since the law came into effect, costs are still rising, and it’s not clear what will keep them from rising in an unsustainable way.
Our family has been extremely lucky, especially in benefiting from CHIP and Medicaid during Dillon’s pregnancies. Those who make a little more than we do and don’t qualify for these programs have the hardest time of it. Those who make a lot more should have enough that these costs aren’t a serious issue.
To those who struggle with these issues as we have, I would offer the following advice. Look into CHIP if you have kids. Even if you make too much for no-cost CHIP, there is also low-cost CHIP, and the quality of the coverage is high. Second, look really hard at the benefits you’re receiving from your coverage. We could be paying a lot more for our monthly premium and yet not getting anything for it. As long as you have coverage for something catastrophic, I think buying the cheapest insurance possible makes sense.
Finally, although being bitter about the whole situation is never a healthy thing and is counterproductive, I do think we need to speak up publicly and to each other more than we do about the insanity of the system we have. One thing that characterizes our age is disempowerment. Rightly or wrongly, in the 1960s people believed the world could be made better by their efforts. Now, we cynically believe nothing will change despite our efforts. I think we need to return optimism to our basic worldview, not in the sense of glossing over injustices or problems, but in the sense of taking them on and calling them what they are. Even if a problem can’t be immediately changed, there is great health and liberation in identifying a problem and calling something what it is. Action is also an antidote for bitterness and disempowerment. The more we speak up and out about such things, the more chance there is of gaining a critical mass and of change actually taking place.