Renewing the old headaches

   Everyone has their least favorite thing to do. For some, itís having a sadistic dentist drill into their gums. For others, itís having their fingernails pulled off, one by one.
   For me, itís 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)Ö15%Ö25%Ö.35%Ö45%.
   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 wouldnít tell me."
   "What do you mean they wouldnít tell you," I cried.
   "What does that mean?"
   "Well, usually it means your claims were so low they donít 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.
   "Thatís it," I said for the thousandth time. "Iím going to self-insure."
   The thought is so pleasant. Iíve 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 employeeís 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 wouldnít be for me, it would be for the employees.
   "Thatís a wonderful idea," said Wendy, who had heard it all before. "But all you need is one major illness or injury and youíre bankrupt."
   See, thatís why I hate health insurance so much. Logic takes a back seat to chance.
   "Iíve got some options, though," continued Wendy. "There are companies out there that allow you to partially self-insure, meaning theyíll reduce your premium if you have a good year but youíre 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 donít exist.
   Thatís 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 doctorís office visits, physical exams, prescriptions and even "well-baby" maternity care, but the savings would be minimal. Itís the Big One that everyoneís worried about, and thereís no getting around it.
   "You carry fire insurance, donít you?" asked Wendy, sensing my unhappiness.
   "Of course. Why?"
   She shrugged. "Thatís 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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