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Rising Costs
Risky Business
David is a social worker in charge of supervising the adoptions of young clients with special needs. For years he has worked for an organization that sponsored a group health insurance plan for all its employees under Blue Cross Blue Shield and was therefore provided at a reasonable cost. Prescription prices were based on a tiered system for medications organized by frequency of use, price and brand. David was very satisfied with his insurance as a good percentage of his prescriptions were covered by the HMO policy and he was paying only $63 a month in premiums.
Last summer, however, his organization decided to stop participating in this plan after they were informed by Blue Cross & Blue Shield that the cost of premiums would triple. His organization decided it was not fair for lower risk employees to share this higher cost with higher risk personnel. Unfortunately, David is afflicted by an auto-immune disease and needs rather pricey medication to maintain good health.
Beginning last summer, David’s organization joined United Healthcare and he was given a health savings account. The health savings account is designed to be an efficient and affordable method of paying for medical expenses. The government allows a certain portion of funds to be set aside for the exclusive purpose of paying medical bills. The money is tax-free and the consumer is issued a debit card and checks to access the account. Finally, the amount of money is conditional on one’s income and insurance plan. Through pre-tax payroll deductions every two weeks, David is allowed to set aside $1100 per calendar year into this account. This account can be useful in managing spending, says David, but it is simply not enough to cover his needs; a doctor’s visit alone has a co-pay upwards of $40 and David needs to see his doctor regularly. Furthermore, doctors charge a negotiated rate to patients with such accounts, so there are instances where David simply does not know how much he will be charged after visits to the clinic.
David’s major obstacle under his new coverage is the astronomical costs he has to set aside every year as a baseline. The new plan requires the client to pay a deductible of $1100 every year before the coverage plan can go into effect. Because David switched to this coverage in July, he has had to do this twice so far because his organization operates on a fiscal calendar and United Healthcare on a calendar year. In addition, three-month supplies of each of his three prescriptions have a co-pay of approximately $125 each. This is an enormous financial burden for anyone with a modest income, and it is especially large for those like David who has to manage a chronic condition. If David is not able to be in a shared risk pool, he has to shoulder most of his treatment. Because his health is naturally of foremost importance, he has to work extra hard by putting in extra time at his second job. Needless to say, paying for healthcare is quite difficult for David.
Like many, David believes healthcare should be a right and that he should not be penalized so severely for having a chronic condition. David is also concerned that the new direction national healthcare reform is taking forces people to become super savvy consumers without providing a clear system for doing so. How can the elderly and people unfamiliar with the internet adjust to such a fractured system? Trends such as health savings accounts, carved up insurance pools, and privately managed government funds are designed to provide people more individual control of their healthcare. While this may suit wealthier people, it leaves those with lower incomes with more expensive, confusing and limited plans.
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