St. Albans Messenger

What used to be called “catastrophic” insurance has been rebranded as “high deductible” insurance. It used to be on the cheaper side because the insurance company’s liability didn’t kick in until you had already paid a large amount. While you were covered if something truly catastrophic happened, it encouraged you to avoid seeing a doctor for day to day complaints because you had to pay the whole amount out of pocket. Delaying doctor visits until conditions get much worse is both bad for your health and ultimately more expensive. In the rebranding of “catastrophic” to “high deductible”, insurance companies apparently figured out they could actually charge an arm and leg for this lousy healthcare. The innocuous term for this is “underinsured,” meaning you pay a high premium for insurance with a deductible so high you still can’t afford to see a doctor. How bad is this? Consider what might be my insurance. I pay $7,000 a year out of my paycheck, and my company pays another $14,000. The deductible is $10,000. If I have $10,000 worth of healthcare expenses, not uncommon in this land of runaway medical costs (Vermont being higher than the national average), I pay $17,000 out of pocket. Add in the $14,000 my company pays (money they could’ve been paid to me), and the total is $31,000. Of that $31,000, the insurance company made off with $21,000 without paying out a penny; hospitals made off with the remaining $10,000. A so-called “high deductible” plan should really be called a “ridiculously expensive catastrophic” plan. Clearly this is the business to be in! The $17,000 out of my pocket is equivalent to 25.1% income tax if I have the median income in Vermont. My company paid the equivalent of a 14.8% payroll tax. Compare that to the 9% income tax and 11.5% payroll tax that then-Governor Shumlin balked at eight years ago when he pulled the plug on publicly funded universal healthcare. Exactly what was there to balk at? Universal publicly funded healthcare seems the obvious solution to our current healthcare nightmare.

Mark Gibson