I need to make a decision, and I would like your input; and my guess is that there are others here facing similar decisions who may benefit from a discussion of the pros and cons.
I live in North Carolina. As was reported in many blogs here on Daily Kos, Blue Cross Blue Shield of North Carolina (BCBS) sent letters to its policy holders last month raising rates. Coincidentally, a week or so before sending out the letters, BCBS robo-called its customers to tell them that BCBS was sending out a mailer that would include a postcard to be mailed to our Democratic Senator Kay Hagen voicing opposition to a Public Option in Health Care Reform. And sure enough, days later, such a mailer was received by BCBS customers.
I logged on to the BCBS site and found a breakdown of my rate increase. There are three components of my particular increase.
- Medical trend cost – 3.22%. This increase appears to have been applied to all customers.
- Benefit choices & other factors – 3.14%. This increase appears to vary depending on which plan you have. Since I have a high deductible plan, my guess is that my increase was not as high as others with lower deductibles may have experienced; but I’m just guessing here, I really don’t know.
- Age/gender adjustment – 20.09%. Every few years, customers move into a higher age bracket, as I did this year.
According to Health Care for America Now (HCAN), BCBS raised rates on North Carolina customers by an average of 11%. Most folks did not hit higher age brackets like I did; so I’m guessing that for many the increase in "benefit choices & other factors" was even higher than it was for me. So I see three possible outcomes of the increase, all of which are good for BCBS.
- Pay the higher premium.
- Get a higher deductible.
- Cancel the policy.
The highest increases were probably age bracket increases. If it costs more to provide health care to older folks than it does to younger folks, then profits will increase if you can drive the older customers away.
Similarly, for all customers, profits will increase if you can drive your customers into higher deductibles since your customers will be paying more of the health care costs incurred out of pocket.
And if you can’t drive them away, and they won’t settle for a higher deductible, then let them pay higher rates.
So that’s the background of the rate increase. Oh, and in case anybody asks, I have read the latest annual financial statements of BCBS, including the salary amounts of the highest paid officers; and I don’t find arguments suggesting that these increases were "necessary" to be compelling.
Now here’s where I need your thoughtfully considered opinions. As those who have added up the percentages shown above have determined, BCBS raised my health insurance rate 26.45%. It is a substantial increase. My monthly health insurance premium is already a significant component of my household budget, and it is about to become even more significant. I am very seriously considering canceling my coverage for two reasons.
- Cash flow. My business is currently operating at a loss and I am already drawing heavily on funds that I had set aside for retirement in order to meet monthly household expenses.
- Principle. There is in my view a compelling argument to be made that continuing to pay these premiums is to continue to support a corrupt system.
Obviously there are many who are in far worse situations than I am. Many Americans do not have the luxury of being faced with the decision that I’m considering as they already have no health care coverage and do not have the income to purchase health insurance. Additionally, I have no dependents; the only person whom I would be putting at risk by canceling my coverage would be me.
As already mentioned, my current deductible is high. Thus in any given calendar year, not only do I pay my monthly health insurance premiums, but if I incur health care costs, they are paid by me until they reach the deductible amount during the calendar year. And if those costs were incurred at such times that some claims were filed by providers before the end of the year and some were filed after the end of the year, then deductibles in two calendar years may come in to play.
On the other hand, the rates negotiated by BCBS with providers for some services can be substantially less than the standard rate billed by the provider. Thus someone without health insurance would be billed at a much higher rate.
And of course there is the possibility of a catastrophic health care event. That’s the really big risk here. As a generalization, my guess would be that I’ve paid in significantly more in premiums and out of pocket costs than I would have incurred had I not had insurance (I haven’t done an accurate analysis of this point, but glancing through my records that appears to be the case). I am very healthy; but that is no guarantee. My past personal experience suggests that by "self insuring" I would in the long term be saving money; but a catastrophic event would change that very quickly.
Admittedly, I am not looking at this decision solely from the standpoint of financial objectivity. It’s a very emotionally charged issue for me. I have long thought our system was broken and corrupt. I have long thought that health care should be about people caring for each other; that it should not be about profiting on the misfortune of others. I have long been a supporter of a single payer system because a community, no matter what size, should be a group of people that care about and for each other. So, until relatively recently, this was for me an issue that was of utmost importance to me politically; it was an issue that was all-important as I watched all the debates among the Democratic candidates vying for the party nomination for the office of President of the United States, and participating with all of you in the Daily Kos threads that accompanied those debates. I, along with most of you, parsed each declaration uttered in the debates, and struggled with the fine nuances of mandated coverage and other differing views in judging the positions of our candidates. Now, it’s personal.
So, if any of you care to share your perspectives, objective and subjective as they may be, please do so. I really don’t know what to do at this point; but emotionally, I am very drawn to calling BCBS this afternoon and canceling (receiving the 26.45% rate increase letter just days after that card asking me to oppose the public option was, for the momentary lack of a better word, just a bit on the side of outrageous). And as stated at the top, I would imagine there are others here who face similar questions, most of them with far more serious impacts on family health and economics than those that I face.
Thank you.
David