Oh, I know, you’ve heard that some folks’ insurance bill have escalated.  I will not deny that changing from a catastrophic-coverage plan to a real health care plan is not more (even much more) expensive- but in the grand scheme of things for all citizens, that is not a big change.  Because most Americans get their health care insurance at work.

Back before my first daughter was born, I had both catastrophic and regular health care plans.  And, that came in really handy, since my eldest was born with an APGAR score of 1- so there were significant bills.  Which only cost me about a hundred bucks (the equivalent of $ 500 now).  But, after a while (and after I stopped having “airplane incidents”), I dropped the catastrophic plan coverage.  While it was cheap (the equivalent of about $ 200 a month now), I just retained my health care plan instead (at the equivalent  cost of $ 700 now) for my family.  (Don’t forget I was young back then, too…) That differential is still about the same when switching from catastrophic to conventional health care plans.

Some folks are also covered by what is called an indemnity plan.  (It turns out some companies are devising methods to keep offering such plans to their [claimed healthy] employees, as a mean to save money. Even though these programs are not PPACA (Obamacare) compliant.

There seems to be a quirk in the law that if the employer offers a compliant plan to all, it may be able to offer these cheaper, less useful (unless you are totally healthy) indemnity plans to those who wish to participate.  They (the employers) may not incur any PPACA penalties, if there is a compliant plan available for their staff.

And, why would I (and others) rail against such plans?  Because they seem cheap – the cost per employee month is about $ 80- but, in reality, they aren’t.  Since they indemnify the employee, rather than insure them,  the costs are actually higher than one may think.  Each doctor’s visit yields a reimbursement of $ 70- or up to $ 560 a year.  A visit to the hospital gets one a check for $ 1000 per day.  An ER visit entails the employee receiving a check for $ 75,  while pharmaceutical users obtain a $ 20 check for each drug (up to $ 40 a  month).

But, as I’ve written before, health insurance is not just insurance- it entails the holder to be a member of the “buying club”.  Where the health plan negotiates rates with the various health care providers that are lower than retail- and that alone saves one considerable sums of money.

So, let’s consider one scenario.   A visit to my doctor and the prescription of two drugs- for a year.  My doctor’s bill runs $ 275 (without lab tests or specialized assays like EKG, breathing tests, etc.).  And, if you were prescribed a generic statin and a blood pressure control drug, you would find your monthly drug store bill running about $ 100.  (I understand if I were willing to visit Walmart the drugs may only cost $ 10 to $ 30.  So, I will use that hypothetical- which may or may not be true, since I never go to Walmart.)  As you can see, the subject would have monthly drug bills of $ 30- but after reimbursement, costs him nothing under this indemnity plan.  But, my doctor bill is $ 205.  Assuming I never get sick, never go back to the doctor, never break a leg or arm or step on a nail, then my annual cost for this indemnity plan would be as little as $ 1165.

Compared to my current plan, which requires me to pay $ 10 for each drug and $ 20 for each doctor visit, this is very reasonable.  My annual costs are $ 7560.   That’s why folks often opt for the indemnity plan, because if one is really healthy and never injured- it’s cheaper.

But, let’s consider what happens  if I burned my hand (like I did last year).  And, instead of going to the ER, I went to a step-down facility (a non-hospital emergency room), because I knew it was a minor burn.  (Actually, that was only my thought- it truly was a third degree burn over 45% of my arm.)  So, that visit ran up a cost of  $ 650- which only cost me $ 10 again through my insurance.  (The actual bill from Simplicity was $1142, but my insurance cut their demand to $650.) Oh, I am also on four drugs, two of which are brand-name only, which run me $ 50 a pop (after my deductible is covered- but I listed that as part of my annual costs above), with list prices of $ 400 apiece.  So, now my annual cost is $8775.  But, that person on the indemnity plan- he is paying $ 5690.  Still less than me- but you can see that the next medical problem he has will cross the line- big time.

It’s a crap shoot that I am unwilling to play with my health care costs.  Obviously, he (the hypothetical employee) has more steady nerves.

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