Health Care Costs Ex-Insurance

At the beginning of this year, I decided to keep a running list of what I would have to pay for all of my health-care-related expenses if I didn’t have insurance. That’s the retail sticker price. So far, the tally has been pretty enlightening, as itemized below... the biggest expense was actual my very generic Rx.

Retail for my Generic Rx $59.99 x 12 months = $719.88
OverTheCounter Meds = $42
Contacts = $114
Annual OB/GYN visit = $180
Dermatology Screening *EST* $175
Dermatology – Routine Removal *EST* $450
Dental Exam - *EST* $150
Dental Cleaning - *EST* $140
TOTAL Year To-Date: Closing in on ~ $2000

Interesting A-Ha's about COBRA

Couple new fun facts I learned about COBRA, in case you’re leaving a company soon… either by choice or not so much by choice.

1.My healthcare benefits are terminated on the last day of the month in which I terminate my employment. I was originally thinking about my last day at work being July 31st, but then I realized that if I worked one more day (August 3rd), I would then have healthcare for the remainder of August. (This was relevant to my Blue Cross Blue Shield healthplan, and I’m definitely not sure that this applies everywhere).

2.The second item does apply everywhere because it’s new legislation just implemented by Obama. Apparently, you can elect COBRA retroactively, up to two months after you terminate employment. So, I can basically not pay for healthcare for the month of August… but if I break my leg, I can go to the hospital and say “I need to elect COBRA to pay for this!” The whole impetus behind the new legislation is making coverage easier for people that are in transition. Awesome, real world implications benefitting me from having all of that hope in the Oval Office.

Going COBRA

Recently a friend of mine and I were sipping iced chai’s at a cute little café a few blocks from my house, and I was talking about how I wasn’t sure what to do with the one month gap I’ll have between leaving my current company and starting school, when she interrupted with:
“So are you going to go COBRA?”
Not sure if this was some kind of freaky code name for backpacking through South America, I paused.
“Huh?”
As it turns out, her mind instantly went to my one-month gap in health care. COBRA is an acronym which stands for Consolidated Omnibus Budget Reconciliation Act, which is the federal law that allows employees to continue coverage in a group health plan after quitting. Provided I’m still insured the day before I quit, I can extend my coverage up to 18 months after I leave. Good thing I’ll only need it for a month as I’m preparing myself for extreme sticker shock.

But since I am young, single and healthy, I may look at short term individual health insurance too, just to compare. Employers can charge the entire premium (so what I paid, PLUS what they paid), as well as an extra 2% for administrative costs.

I’m only paying $47 a month now, but I’m not sure how much my company is paying in my stead?

Bonus De-Anticipation

So much has been made about these crazy bonus payouts for bank execs which have remained unchanged or not significantly deflated in these crazy economic times. The fat wallets are easy targets, sure, and the anger is justified, but it does make you wonder from a human resource management perspective – what is the best way to reward and incentivize people? At my company our bonuses are clearly tied to performance. We set targets for ourselves at the beginning of the year, and if at the end of the year, we don’t hit those goals, we see a big hit in our year-end bonus. Having faced two major crises this year: 1) the impact of the peanut butter recall and 2) consumers having less discretionary income to buy the food we make, our teams are likely NOT going to be making our targets this year, which means, we’ll take a hit as a company (from Wall Street) and I will take a hit in my direct-deposited bonus. I am a lowly peon for said company, so honestly, I feel this is NOT a good incentive. I am doing my part everyday but I feel it is pretty far removed from our overall performance, so I wish I was seeing a more equal paycheck bump as many of my same-company peers who made their targets. However, in terms of sheer corporate “fairness,” our current system makes intuitive sense to by-standers.

I was relying on a bump about the same as last year’s bonus to meet my 2009 Net Worth Goal. But if it doesn’t happen, c’est la vie – I am young, still employed, and happy.

The "Why" Behind Expensive Health Care

I wanted to do a series about how much health care costs (i.e. literally answering the “what” for all of these services), but the more I researched, the more I found answers to a different question, the “why.” As in “Why does U.S. health care cost so much?”

The variations in how much health care costs in various nations are mostly explained by G.D.P. per capita. And everything else is being attributed to:

1. Simply higher prices for the same thing
2. Higher admin/overheard costs
3. More widespread use of high tech equipment
4. More defensive medicine and tests to fend off malpractice suits

I wonder if any of Obama’s universal health care plans are addressing any of these specific issues or if universalizing will simply being evening the playing field for lower income families who can’t even get the baseline of care being offered in the U.S. I will be interested to learn more.

To my original question of how much health care costs… does anyone have ideas for good resources on where to find better itemization of what things cost?

In the meantime, I'm doing a pretty good job of noting Rx costs on my recipts (that little line that tells you how much your insurance saved you....)

Read more in-depth in this great Economix article from Nov. 14 NYTimes

Why is enrolling in health care benefits so damn confusing?

I finally re-enrolled in the same health plan I had last year… but I still don’t feel completely confident in my choice. Mostly because I still don’t feel like a very savvy consumer of my benefits. I work for a company that has great, comprehensive health care, so I can supposedly breathe easy.

What I did differently: Upped my Health Care Spending Account $300 (I didn’t fund this at all last year). That means my monthly premium will go up $25, but hopefully I can maintain my very minimal out of pocket costs. For me, I would much rather stagger my spending in a predictable way. Nothing worse for me than having an unexpected medical bill dropped into my monthly budget.

The Deductible Details: My effective deductible is $600 annually. I technically must pay full-sticker for health care until this deductible is met. High, but reasonable for my annual budget, in my view. Then, I pay copays for everything afterwards - $15 for a doctor visit or prescription, etc. etc. Then in the details there is a different figure: Maximum Out of Pocket Costs: $2,600. I guess that means there is a $2,000 cap on all copays that I would pay in the course of a year over my deductible.

What I don’t understand: The impact of my Health Care Spending Account on my taxes. I get that these dollars are tax-free. But I really don’t understand how it effects my April tax return on a dollar basis.

My Health: Being in my mid-twenties and a relatively healthy person with no chronic conditions, I have to say my health is good. But I’ve had a few issues that I could see escalating. I’ve had some eye issues that don’t seem to be getting better, and I’m also having some semi-serious medical testing conducted this week. I also decided to get the HPV vaccine Gardasil this year.

What I’m not sure about: Under this Health Plan last year, due to employer pre-tax contributions in my personal health account, I never paid any significant out of pocket costs. Once I had some pricey dental work done, which was a chunk, but I knew that wasn’t covered in my insurance – so it was separate. I guess what I worry about is that this year, I will start really nicking into that $600 – and I’m guessing that would happen in several high-dollar due-all-at-once incidences. That worries me… but I still think this is the best plan.

Sigh. Why is Open Enrollment for Health Benefits so damn confusing?! I’m linking to an article on tips for evaluating health care coverage. It is very basic, but does give you a good checklist of things to think through as you decide.