What I Learned Today about Health Insurance

By On November 9, 2009 · 9 Comments

I work for a small business.

I just got married.

I thought it would be a good idea to investigate whether or not I should switch to my husband?s health insurance plan.

I had no idea how HUGE the price difference would be!

My company struggles every year to figure out how to continue covering our employees ? my boss covers all of our premiums and gives us the best insurance he can. There have been years when we decide to skip any pay increase so that we can maintain our health insurance coverage (which has gone up 30% in one year).

Now, switch to my husband?s insurance.

He works for a large international corporation. We have 7 employees; his firm has more than 170,000.

They can provide me similar coverage for 1/6th the price my company pays! Seriously, for what my boss pays to cover me for TWO months, the large company can cover me for an entire year!

Two lessons:

  1. No matter what they say, our policymakers don?t care about small businesses.
  2. When a large institution can spread the costs/risks associated with health care among its people, it can save A LOT of money. I wonder how much money a government program made up of 300 million people could save!? Hmmm?
Evangelize!
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  • http://www.bloggerinterrupted.com TimRusso

    a good argument for the public option?

  • AmberinVA

    Probably makes too much sense!

  • michaelbyrne

    Also a good argument for a public exchange, where small businesses may be able to “pool” with other small businesses to get better rates. That's another good way to control costs. The House bill includes this kind of system, I believe.

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  • ambersfriendjohn

    Interesting, Amber! What you experienced is the economic concept of “buyer power”, which makes firms lower prices and increase benefits to consumers. Like michaelbyrne rightly mentioned, small businesses or individuals “pooling” into larger buyers makes them collectively stronger, and this is increased in a market with several suppliers. This “buyer power” is completely negated in a monopoly environment, though, where one firm has 100% of “supplier power”. In that case, the only consumers with any buyer power at all are those who are wealthy enough to fly to other markets or can deal with a black market.

  • http://www.plunderbund.com Eric Vessels

    First, congrats on your marriage! Second, I think the comments here are spot on. This is why a public option and pooling helps consumers. It is also why insurance companies do NOT want health care reform to pass.

    Also, glad to have you mix it up with us today during the re-launch. Good stuff. ;-)

  • michaelbyrne

    Also a good argument for a public exchange, where small businesses may be able to “pool” with other small businesses to get better rates. That's another good way to control costs. The House bill includes this kind of system, I believe.

  • ambersfriendjohn

    Interesting, Amber! What you experienced is the economic concept of “buyer power”, which makes firms lower prices and increase benefits to consumers. Like michaelbyrne rightly mentioned, small businesses or individuals “pooling” into larger buyers makes them collectively stronger, and this is increased in a market with several suppliers. This “buyer power” is completely negated in a monopoly environment, though, where one firm has 100% of “supplier power”. In that case, the only consumers with any buyer power at all are those who are wealthy enough to fly to other markets or can deal with a black market.

  • http://www.plunderbund.com Eric

    First, congrats on your marriage! Second, I think the comments here are spot on. This is why a public option and pooling helps consumers. It is also why insurance companies do NOT want health care reform to pass.

    Also, glad to have you mix it up with us today during the re-launch. Good stuff. ;-)

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