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Everyone has their least
favorite thing to do. For some, it’s having a sadistic dentist drill
into their gums. For others, it’s having their fingernails pulled off,
one by one.
For me, it’s having to meet with my
insurance agent to renew our company health plan.
There is something about health
insurance that really bothers me.
Only when I dig down deep into my soul
do I realize my pain is caused by the fact I am paying exorbitant sums and
getting practically nothing in return.
Every year the scenario is repeated. I get a
call from my insurance agent, Wendy, who cheerfully tells me the annual
increase is only going to be (check one)…15%…25%….35%…45%.
This year was the worst of all. The
increase was "only" 15% so immediately I knew once again that we
had failed to submit many claims.
I had paid about $36,000 in health insurance
premiums for the year. I asked Wendy to find out exactly how much the
insurance company had paid out in claims from my employees.
"I already checked," she
said, sheepishly. "They wouldn’t tell me."
"What do you mean they wouldn’t
tell you," I cried.
"What does that mean?"
"Well, usually it means your
claims were so low they don’t want you to know how much money they made
on your account."
I did a quick estimate, checking with a
few employees on their usage of the plan. My best guess was our claims
totaled less than $5,000 for the year.
"That’s it," I said for the
thousandth time. "I’m going to self-insure."
The thought is so pleasant. I’ve been
in business 12 years and have paid, say, $250,000 to health insurance
companies. Total claims might have been, conservatively speaking, $50,000,
leaving me $200,000 in the bank to take care of sick or injured employees.
With interest and continual annual
contributions, the fund would grow and grow and grow and I could take care
of all employee’s medical costs, with no deductible. The fund, once it
grew to exorbitant levels, could also cover child care expenses and maybe
even some dental work. It wouldn’t be for me, it would be for the
employees.
"That’s a wonderful idea,"
said Wendy, who had heard it all before. "But all you need is one
major illness or injury and you’re bankrupt."
See, that’s why I hate health
insurance so much. Logic takes a back seat to chance.
"I’ve got some options,
though," continued Wendy. "There are companies out there that
allow you to partially self-insure, meaning they’ll reduce your premium
if you have a good year but you’re still protected if you have a bad
year."
Now we were talking. I asked her to get
me some quotes from this company and let me know my monumental savings.
Maybe I could still start my "employee fund" with the money
saved.
She returned with the new quote a few
days later. If we had a "great" year with practically no claims,
I would save about $5,000 from our present plan. If we had a
"bad" year, meaning if someone actually got sick, it would cost
much more than our present plan.
I sighed my most impressive sigh of
resignation. As I do every year, I surrendered to the forces of the
insurance companies.
In the end, I stayed with our present
plan, including its 15% increase. There was no other feasible way. Plans
that would only cover major medical at a fraction of the cost of full
plans simply don’t exist.
That’s not entirely true. They do
exist, but they are not a fraction of the cost. It seems the insurance
companies are every bit as worried as I am about one of my employees
having a catastrophic illness or injury.
I could self-insure the minor healthcare
costs, such as doctor’s office visits, physical exams, prescriptions and
even "well-baby" maternity care, but the savings would be
minimal. It’s the Big One that everyone’s worried about, and there’s
no getting around it.
"You carry fire insurance, don’t
you?" asked Wendy, sensing my unhappiness.
"Of course. Why?"
She shrugged. "That’s no
different. You pay to protect yourself from the unthinkable."
I ignored her. Trying to cheer myself
up, I was thinking of my appointment that same afternoon to have my
fingernails torn off, one by one, while my sadistic dentist performed a
root canal with a Black and Decker drill.
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