Tuesday, February 27, 2007

Health insurance follies

We're losing our current health insurance company. The Vantage Health Plan will no longer be available to state employees in this area. Actually, we're in the only region where this health plan is available to state employees. Not sure why, except that Vantage has a big presence in this area. Vantage is expensive, but it gives the best coverage for what you pay. Of course what we pay is too much, and we were potentially looking at having to drop one of us due to the expense, but at least it covered a lot without having to meet a huge deductible.

Alana was never able to get the scoop on why they pulled out. I've heard, alternately, that they decided not to put in an offer, and that they were not asked to put in an offer. Don't know which, if either, is true, just that as of July they will no longer cover us.

Alana told me today that as a replacement they'll be offering coverage by Humana. Humana is the option for the state employees in every other region. It's apparently cheaper than Vantage (though that's yet to be seen, as they will likely increase their rates this year) while offering similar coverage.

The point is, we're left at the whim of whatever insurance company Alana's employer chooses to go with. In this case we might actually be better off, though we're not counting on it.

What struck me was the juxtaposition of our situation and President Bush's radio address on the weekend. The president has decided that it's time he tackled health care. The problem he decided to focus on was the way health insurance was taxed. If you get health insurance through an employer, you can have the premiums deducted from your pay cheque as pre-tax. This means it comes off your taxable earnings, and you don't pay tax on it. According to Alana, this is also the case if you are self employed. If you are not self employed but have private health insurance (not through an employer) you don't get this benefit. The president sees this as an unfair imbalance, which on the face of it appears to be the case, and he wants to give tax credits for people with private insurance.

Digging deeper you realize that this is just another tax cut for the rich. Private health insurance in the U.S. is expensive. Prohibitively expensive. People in our economic frame can't afford private health insurance. It's why there are so many millions without health insurance: if your employer doesn't offer it, you can't afford it.

The only people who have private health insurance are retirees and the wealthy. Retirees on Medicaid Part-D don't have much of an income, so a tax credit doesn't do them much good. This credit is aimed at those wealthy few who can afford private insurance, the wealthy few who don't need a tax credit.

Is it unfair that Alana and I get a tax break while someone with private insurance does not? Sure it is. At the same time, it's not fair that I have less access to politicians than someone who is rich. It's unfair that a far smaller proportion of my income can be classed as disposable.

I question the wisdom of this initiative at a time when there's a huge budget deficit and so many millions of people are without any insurance at all. Of all the problems with health insurance in the U.S., this seemed the least important.

I guess there must be an election coming up sometime in the fairly near future...


Michael Skeet said...

I wonder if there will ever be the sort of comprehensive health-care reform the U.S. so clearly needs? I have a lot of trouble understanding why people aren't up in arms about this, and why health insurance company headquarters aren't in flames.

[sotto voce]Socialized medicine Socialized medicine Socialized medicine Socialized medicine[/sotto voce]

Anonymous said...

Because people down here quail at the words 'socialized medicine'. That means (heard through the filter of people who never have to worry about healthcare) higher taxes...lack of access to services. In other words, too many special interest groups--pharmaceutical companies in particular--have such a stranglehold on lawmakers in this country that people who most need said healthcare will never get it. I see daily examples of politics at work (figuratively and literally). Color me disillusioned.

Unknown said...

*Points at Alana's comment* What she said.