I received a standard-looking letter from my health insurance company recently, so naturally, I ignored it.
When I finally decided to open and actually read it, I nearly had a heart attack: Somewhere in the third paragraph, I was informed that my health insurance premium is going up…by nearly $200 a month.
Actually, they didn’t tell me it was going up—the letter just briefly mentioned a new, much higher amount and apparently hoped I wouldn’t notice.
But I did, and I was pissed. Since I’m self-employed and my husband and I buy our family health insurance straight from the company, this is a BFD. As of January 2016, we’ll have to pay $1,059.05 a month to cover us and our toddler—that’s a mortgage for some people.
It’s worth pointing out that nothing about my health insurance has changed, other than the amount I have to shell out each month. In any other industry, we’d laugh at the absurdity and find a new service provider. (Can you imagine if your hairdresser started charging 18 percent more just because and didn’t even explain why?)
The letter also informed me that we could look into ObamaCare (we don’t qualify) or look at other plans (doctors in my area don’t take anything else). So…we’re stuck.
I was informed that my health insurance premium is going up…by nearly $200 a month.
What the hell?!
I called my company’s customer service, and the rep I spoke with seemed confused. “Huh. Are you going to a new plan next year?” she asked. When I told her no, she quickly shifted into corporate mode. She informed me that the “cost of health-care coverage continues to increase each year” and, basically, I’d just have to deal. I also spoke to an independent insurance broker who, while sympathetic, told me the same thing.
Unfortunately, I’m not the only one dealing with this. Health-insurance premiums are skyrocketing next year for people, and according to a recent report from health policy research group the Kaiser Family Foundation, deductibles (the amount you pay toward your medical bills each year before your coverage kicks in) are rising faster than people’s incomes.
“I don't know any entrepreneurs, professionals, or small-business owners who aren't feeling the sticker shock of rising premiums, shrinking networks, and increased out-of-pocket costs,” Sarah O'Leary, founder of Exhale Healthcare Advocates, a national consumer health-care advocacy group, told me.
What’s going on here? And how is this even legal?
O’Leary and Alan Balch, chief executive officer of the National Patient Advocate Foundation, say there’s a lot at play, but there are a few major factors:
- There isn’t a lot of state and federal government oversight and regulation when it comes to the health-care industry. “Some state governments are attempting (albeit often failing) to keep insurance costs in check, and the Affordable Care Act theoretically has measures in place to protect consumers,” says O’Leary. “However, enforcement is difficult, and not enough steps have been taken to protect consumers’ financial wellness.”
- We have to have insurance to avoid tax penalties, and we have to purchase it from private companies. Health-insurance companies are well aware that we can’t go without their services if we want to avoid a fine, and they’re taking advantage of the situation.
- Competition is shrinking. Thanks to company mergers, there will soon be just three U.S. health insurance providers—Aetna, Anthem, and UnitedHealth Group—if government officials allow the mergers to take place.
- And so are health-care networks, making it more difficult for people to get less costly in-network care. “Most out-of-network options now carry hefty deductibles that must be paid by patients before they even have access to the often small percentage of out-of-network costs the insurer agrees to pay,” says O’Leary.
There’s also a lot of finger-pointing going on. The customer-service rep for my health-insurance company blamed drug companies and rising health-care costs for the increase, but O’Leary isn’t buying it. “Looking at major insurers’ profit margins makes this an extremely weak argument,” she says.
It’s difficult to pinpoint exactly why costs are going up because health-care and health-insurance costs aren’t very transparent—and are often confusing as hell.
“There remains limited ways for consumers to get specific information regarding what treatments and services the plan covers, the services not included in the plan’s benefit design, and how much patients must pay in deductibles, copayments, and coinsurance,” says Balch. “As a result, insured individuals are asked to act as consumers in a marketplace in which price—a fundamental driver of consumer behavior—is often unknown until after the service they purchase has been performed.”
So what can you do about it? While you can’t change the industry—at least not yet—you can be smart about your coverage.
If you’re not planning to have a baby or major surgery in the next year, O’Leary says it’s worth considering a plan with a lower premium and higher deductible that still covers your medical needs. (Just make sure you have money set aside in case something bad happens.)
Once you choose a plan, make sure that everybody you see is considered in-network. O’Leary suggests calling your health-care providers after you receive your insurance cards to make sure they’re still in your network. (You typically have a grace period to switch plans if the network has changed by the time you get your cards, she says.)
"It’s difficult to pinpoint exactly why costs are going up."
Also, verify that health-care providers are in your network before having any nonemergency tests and procedures done. “Pathologists, radiologists, and anesthesiologists are historically the biggest out-of-network culprits,” says O’Leary.
And finally, speak up. Talk to people about the sh*ttiness of the situation, and reach out to your local politician. It’s easy to just roll over and pay more for health insurance, but things won’t change unless we do something about it.