How Individual Health Insurance Effects You in 2024
Individual health insurance, at least in Nevada, has gotten to the point that most plans are high deductible plans meaning you pay the deductible first before the insurance company pays anything. Let’s explore this further by showing an example of the cost of these plans.
Typically, the deductible has risen to an average of $7500 while the maximum out-of-pocket also averages about $7500 as well. What this means is you pay the contracted rate the insurance company pays the provider until you reach the annual deductible. In the example above, you then pay nothing for the balance of the year when you reach the annual maximum of $7500. Is this insurance or a stop loss in the event something serious happens to you medically?
My contention is it is a stop loss meaning you know each year that if you reach the maximum out of pocket all medical expenses for the balance of the year are paid by the insurance company. Most people will never hit the deductible much less the maximum out of pocket. The concept is a good one if you are healthy and don’t need the coverage. If you are sick and have medical issues, then these plans will cost you a great deal of money. When you pay, the insurance company doesn’t.
Before Obamacare the average male under 30 paid $80 per month for a $1,000 deductible with a $3,000 maximum out-of-pocket. Today those plans do not exist, and the average cost of coverage has exceeded $350 per month with a high deductible and maximum out-of-pocket.
Is there an answer to the high cost of coverage with high deductibles and maximums out of pocket? I think there is, but it requires some out-of-the-box thinking which I’m not sure Congress is ready to address.
The reason why insurance premiums have gotten so high is multiple. The high cost of services is the major culprit. However, the high cost of medications is the main reason. I’ve mentioned this is prior blogs, but Big Pharma is making money on Americans and using that money to develop new medications. However, Big Pharma is selling those drugs in America for more than they are selling these same medications elsewhere in the world. An example is Embrel, in America the cost monthly is $1800 without insurance yet they sell the same medication elsewhere in the world for significantly less money.
Why is that? Big Pharma typically does not pay any federal income tax as they write off all reach and development against taxes thus paying little or no federal income taxes in the US. So how can they sell the drugs here for more money than elsewhere in the world? Congress to date has not addressed this injustice and probably won’t because Big Pharma makes large contributions to their election campaign and Congress won’t stop that practice unless demanded by the US citizens. Would venture a guess that not 1 in 10,000 Americans are aware of this situation. So, this will continue until brought to America’s attention. Consider for a moment because many drugs are cheaper in Mexico or Canada versus the US. You now know the reason but will you bring this up to your representatives so something can be done to fix it?
In this blogger’s opinion, the solution is very simple. Pass legislation in Congress that simply states that Big Pharma cannot sell their drugs in the US for more than the average price of their medications anywhere else in the world. Said another way, Americans are paying a higher cost for these drugs so the rest of the world can get these same drugs for less than what Americans pay for the same drug. If you were unaware of this situation, consider yourself informed. Now do something with that knowledge.
We need a grassroots effort by Americans all over the country to speak to their representatives and demand they address this issue, or we will be paying higher drug prices forever.
Additionally, the high cost of provider care is also having an impact on the cost of insurance but is not as high as the drug costs. I believe everyone should be allowed to make a living and have no interest in controlling that income, but we need to change things if we are ever to control the cost of individual health insurance in America. As an example, the cost of care in the US is higher than anywhere else in the world. No, I do not want national or universal health insurance because nothing the government has ever touched makes any profit (see the Post Office as an example) and usually brings with it a higher level of control. I am not interested in the government controlling health insurance because as soon as that happens there will be restrictions on surgeries or other types of care and those services will cost more money without getting better results.
Consider why Canadians come to America for medical treatments. It’s because the wait to have these surgeries is long and having to do them in the US is less expensive and faster. So national healthcare is not something we should consider. We do need to address this issue and sooner than later or the health insurance premiums will become less affordable for most Americans. This impact has also affected the group insurance market and those premiums continue to rise annually. No one is looking at this and it needs Congressional attention to solve it. Please ask your representatives in the House and Senate to address this before it becomes unfixable.
Hope this blog provides some form of answer as to why insurance premiums are climbing faster than inflation and it provides a way to help resolve this for the long term. If you choose not to speak to your representatives, give this blog to someone who might so we can move this along toward a workable solution for all Americans.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, if you need Medicare information, take a look at Medicare 2024 Information.
The Barend Agency Inc.
Len Barend, Broker