Wednesday, December 26, 2012


Americans obviously have a lot of problems with personal finance.  We have, on average, astronomical credit card debt.  We frequently buy houses and cars we can't afford.  Even going to college or grad school is put on the tab - and I'm as guilty as the next person on this one.

One of the biggest root causes of all of this is that, in spite of being so materially focused, we are still reticent to discuss dollar amounts that we pay for things.  Somehow that is still considered impolite conversation!  Salaries are closely guarded secrets that we guess at.

I want to help break this taboo with some real talk on our family's budget.  When we moved to Nashville, I took a serious pay cut.  At the same time, we bought a house.  The mortgage and homeowners' insurance is about the same as what we were paying for rent and renters' insurance, but there are of course all the auxiliary costs that go with home ownership, plus we had decided to put on a house addition because the house we bought was quite small (~900 square feet).  Shortly after we signed on the house, my husband lost his full-time job.  The addition was already in motion - the foundation poured.

Jeff picked up some work, and we have been okay.  But things are definitely tight.  We are regularly spending every bit of what we make in a month, and not saving anything.  As a United Methodist clergyperson, I do have a pension which is automatically funded.  This is quite unusual anymore.  I have the option of adding to it out of my earnings, but haven't been doing that while we are in this position.

The figure I want to discuss today is what we pay monthly for health insurance for the three of us:  $552.43.  This is high, and let me explain why.  My husband has Crohn's disease, an autoimmune digestive disorder that needs special care, a regular gastroenterologist, frequent colonoscopies, sometimes hospitalization, medication during flareups, and very rarely, surgery.  It is expensive.  Insurance companies recognize this, and he is virtually uninsurable as an individual.  Thanks to some health care law changes, he is no longer allowed to be outright blocked by insurance carriers on account of his condition, but the price gouging is intense.  We definitely can't find anything close to the quality of insurance we need for him for less than $550 per month.

Thanks to the United Methodist organizational system, we have the opportunity to belong to a pool through the Tennessee Conference.  As a full-time elder under appointment, my insurance premiums are covered 100% by the conference.  Adding any adult + children dependents at all (whether it is your spouse, your spouse and your child, or your spouse and your ten children) is an additional $552.43.  And that is a cut rate.  Because my base salary is the minimum allowable for a full-time elder, I am eligible for a reduced rate on the monthly premium.  We could search for other, cheaper insurance for Vicki, but it wouldn't make any difference - we would still be paying the $552.43 just for Jeff.

But wait!  There's more.  The premiums are only what we pay for the privilege of paying more.  There is a $1000 deductible (total, for the whole family) for all services except well-child, and then we pay 20% for pretty much everything after that, up to $2000 per year (including deductible).  One colonoscopy pretty much wipes that out.  So we're looking at $552.43 per month plus $2000 per year.

One upside that I mentioned above is that the rate remains stable for a given year no matter how many dependents you have on your plan.  So, adding the new baby will not be very stressful, since it won't increase our premium at all.

Just the premiums represent about 18% of our pre-tax, total earnings.  In a year where we pay the maximum $2000 out of pocket, the total cost for health care would be 23% of earnings.  

Don't get me wrong.  I am so thankful we have this opportunity, because it is way better than the alternative:  paying out of pocket for all of this at full price.  That would literally break us.  Jeff would not receive the care he needs and deserves.  But when people try to pretend that health care in our nation is not messed up, it bothers me.  More than a little.  I don't know the right answer, but what we have isn't working.  At least not for people who are actually sick and need help.

So, are you brave enough to tell me what you pay for health care per month, or per year?  Is it working for you?


jtothamo said...

Indiana full-time clergy person here. We pay $731 per month for our family plan (in addition to the $1200 the church pays). That's with a "wellness" discount. Non-wellness folks pay $768. We have the potential to pay a maximum of $3000 out-of-pocket expenses, which due to various health issues my wife and youngest daughter face, we easily meet (usually within the first few months of the year). So, that's well over $11,000 per year in healthcare expenses (not including prescriptions, travel, and other medical-related expenses). So, to make a long story short, no, this is not working for us. I'm thankful to have health coverage...but I am confident we can do better than this!

Emily said...

I pay $80/month for an individual plan through Blue Cross Blue Shield, which is pretty cheap comparatively. But working part-time making minimum wage, I'm about to cancel my policy b/c groceries, gas, and bills are higher on my priority list! said...

Thanks for this honest and open assessment of what we deal with. I'm also a clergy under full time appointment in the North Texas Conference. My church pays somewhere near $1000/month for my own insurance and I pay an additional $455/month for my retired husband's coverage. Between deductibles and co-pays, we are out another $3500 to $5500 per year. It is a massive amount of money. We definitely have a broken health care system.

Aimee said...

We are in a slightly similar situation where my husband's premiums are covered 100% by his employer (the county government), and then there is a flat rate for any additional dependents, regardless of how many dependents you add to your plan. For medical, dental and vision coverage for me and Henry, we currently pay about $225 per month, though that will probably go up slightly next month. As far as I know they have always had to cover all employees and any dependent that wants coverage, regardless of pre-existing conditions, which was good for us because my husband had disc replacement surgery in his back during college and it was otherwise tough to get coverage for that. Co-pays on regular visits are $25 but will go up to $30 in January. I'm not sure of the exact splits for more expensive or emergency services, but when I had Henry, we paid $25 for my doctor's services and another $200 for the hospital. That's it. I think they are only able to provide this because the local government is the largest employer in the county so they have a pretty large pool, plus it's actually a self-funded plan so they probably set their own rates. I think they also offer it as an employment benefit because the salaries they offer aren't as good as neighboring counties. Whatever the reason, we realize how insanely lucky we are to have such affordable coverage, and I just don't understand why anyone would think affordable, quality healthcare shouldn't be available to everyone.

Emily said...

When I was a provisional elder in Kansas East, we had something similar, although I was fortunate to be appointed to a church that paid all the premiums, including my share. But we had a high deductible plan ($3000 for family). We also had a Health Savings Account, which I funded pre-tax from my paychecks. That was a nice bonus. The Conference loaded it with $600 per year, and then paid $50 into it per year.

Emily said...

That is a great price! But I understand about needing to prioritize. I've honestly thought that if it would make any difference, I would drop my insurance. But I'm not the problem. I'm covered 100% because of my position. It's Jeff, who actually needs the insurance, that we're paying for!

Emily said...

Yep. When I started making pie charts for our monthly expenses, I was aghast at how much of the pie was health-related. As much as total housing cost per month.

Emily said...

Great points. I should have mentioned that part of the reason these premiums are so high is related to the horrible health of clergy as a whole. We are more overweight, have more diabetes, depression, heart disease, and strokes that the average population, and on the whole are older than the average population. So - bad pool, even if you're a relatively good candidate on your own.

The one saving grace to me is that we are capped at $2000 per year. When I first looked at the plan, I misunderstood and thought that, after the $1000 deductible, we paid 20% up to infinity. That would have been horrible for us.

Government employees do tend to have good benefits to help make up for the lacking salaries. That's a good thing. When I worked as a teacher for one year, I had great insurance for next to nothing. And a good vacation schedule to boot.

Andrea said...

Our health coverage is in a very interesting place right now. I'm a full time student, and my husband is self-employed. We had an individual family high-deductible plan that was about $475/month with a $6000 deductible. However, due to circumstances beyond my control (and yes, I fought it, and lost), I was dropped from the plan retroactive to the beginning of the policy, and we ended up having to pay for a bunch of things out of pocket. (I had had physical therapy for a knee injury and then surgery to remove a lymph node - before the insurance dropped me, but the insurance dropped me before any of those bills came in.) We would have more than hit our deductible for the year, on me alone, not to mention the expensive medicine one of my children needs every day, or any other doctor visits in the year.

I am now on an individual policy in the Kansas high risk pool, which just went up to about $275/month for premiums, and then has a $2500 deductible, and then after that covers at 70%.

My family (husband and two children) are still on the individual plan that I was removed from. I think their premium is slightly under $400/month without me, and they still have the $6000 deductible.

So, all that is on top of what I currently owe from this past summer, which is substantial, for someone who doesn't really have her own income at the moment!

To say I think this whole system needs to change is an understatement. We are trying to hang on and stay healthy until I get (hopefully) commissioned as provisional elder this year, and hope to start work with benefits in July. And if this situation wasn't this temporary, we'd probably have looked for something else for my husband and kids for this year, but for only 6 months, it wasn't worth the hassle.

Emily said...

Andrea - That's a tough situation! I'm sympathetic. We will be paying for our home birth out of pocket, I have a feeling (although our midwives say they have had some success billing our particular insurance with past births). However, for me, it was worth dipping into savings for that. Total individual prioritization.

One thing that kills me is the duplicity involved with all of this. It's enough to make me one of those paranoid people who thinks everyone is out to get their dollar and mess them over. For instance: my husband recently had a colonoscopy. The hospital system who did it said they "required upfront payment of all deductibles, co-insurance, and co-pays." However, because we had several claims processing, I wasn't sure exactly what our co-insurance would be until they billed us. I haggled with the lady for about an hour before she admitted that they didn't actually have to demand payment upfront, they just did it because most people wouldn't pay on payment plans they set up. I hate that it's come to that, but we need the interest-free payment plan medical professionals offer. Way better option than putting it on credit and paying huge interest in the meantime!

I'm just waiting for Jeff's certificate of continuous coverage (which transforms his Crohn's into a non-pre-existing condition) to be disregarded by some company, and the same thing to happen to him as happened to you.

Andrea said...

We had to pay for part of my surgery up front. And then a bunch of bills I didn't expect came in, that were far higher than I ever dreamed. Anesthesiologist, lab, pathology, etc. For us, it dropped the actual cost of the bills by anywhere from 10% to 30% depending on which bill it was to pay it with them all at once in "cash" - read, on the credit card. And the interest rates were lower on our card than what were offered by the medical billing peoples.

I do feel that there seems to be a lot of duplicity involved, on many parts. Both on the part of the insurance companies and on the medical billing. When I had insurance, I had an "insurance discount," for all these big bills, despite my huge deductible. Now I have to call up and ask for other discounts they might offer. They often will, if you ask. And not being up front about how many bills I would receive, and what they'd be. I was told up front that the surgery would cost about $2k-3k... they said nothing about the other 4 big bills that came in, so that was a huge shock.

I also forgot to mention we pay an additional $75/month for dental insurance. We don't have vision insurance, we just pay that all out of pocket.

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