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Rising Costs
Beth Najberg and the Self Insured
Beth Najberg, married with grown children, works as a self-employed training consultant. When Beth first started working on her own, nearly 15 years ago, she knew that her insurance would not have any employer sponsorship of premiums. However, in 1991, there was not a great gap between what employees and self-employees paid. She paid her premiums through the National Writers Union.
Then, premiums started to skyrocket. In 2003, the NWU discontinued coverage because they claimed that they “simply were unable to find stable health insurance for our group.” Currently, she gets insurance through TEIGIT, an insurance trust for the entertainment industry.
Beth’s concern is over the rising costs of insurance premiums for both those individually insured and those who obtain insurance through affinity groups such as TEIGIT. She cites a recently created spreadsheet of her health costs indicating that in just 10 years her premiums have soared from $204 a month to $1024, an increase of over 400%.
Health insurance premiums, 1995-2007
Consequently, she has had to make financial cutbacks in daily life and make significant long-term adjustments around the growing expense. Beth represents a large group of people who end up having to cut into retirement savings, effectively postponing retirement further and further. Rising premiums dramatically affect the planning of one’s life and, unfortunately, this is a common issue in pre-retirement. Compounding the problem even further is the jump in premium costs between age brackets. Illinois allows premiums to be increased in five-year age bands and there is frequently a dramatic increase in premiums when going from one age band to another.
Recently, Beth found out that, since Illinois has no caps on premium increases, her premiums for 2007 would rise to $1,024 per month ($12,288 per year), a 36% increase. In addition, co-pays would increase 150%. Outraged, she applied to four different insurers and found a new wrinkle in the system: she will have to wait a year to be insured for pre-existing conditions even though she has had continuous creditable coverage for her entire adult life. Were she in Colorado, this coverage could be counted toward the exclusionary period, but in Illinois this is not the case. While Beth keeps records of past medical care, those who don’t may find that they’re at risk for having their policies rescinded if they don’t keep good records and forget something that happened ten years ago.
Based on her experience with Illinois’ system, Beth has decided to leave self-employment and seek a job that includes health insurance. The disparity between self-insured and employer based insurance is too unconscionable: people with employer subsidies at corporations and public sector organizations pay between $0 and $50 per month while those with individual insurance can pay $1024 or more.
Beth thought that insurance was to give peace of mind. Instead, it’s become a nightmare. She envisions a more universal system where prices can be fairly maintained and the self-insured are not punished.
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