Thursday, September 25, 2014

Things That Annoy Me #1

Everyone loves a good gripe, right? Well, maybe. I do though that's probably a character flaw. I figured, why not start a series? I promise not to get bogged down in my own pet peeves, but when things pop up that are too long to explain on ye ole FB, I can grumble about it here. Thus Things That Annoy Me #1:

We got our Open Enrollment information at work yesterday. This is where they tell how much our premiums for insurance are going up next year. This is always kind of a thorny subject because the hospital is self-insured. They make a big deal about the increasing cost of health care and the need for premium increases, but then say they aren't making enough money for us to get raises. So the money goes where exactly? They take it out of one pocket and put it in the other. Anyway....

So a few years ago they decided to soften the blow of the 'no raise/premium increase' combo by putting the premiums on a tiered system where your cost is related to your salary. The lowest paid employees also pay the least in premiums. I am somewhat agnostic about this system. You are theoretically buying the same product so it seems you should pay the same price, but there is also an argument to be made for lessening the burden for lower paid employees by those who can better afford it and also the likelihood that the higher paid employees are older and thus using more health care services and offsetting more of what they actually use. Overall my feeling about these tiers is meh.

Here is what annoys me:  The differences in premiums are such as to be meaningless lip service.

Let us do some math. I will only use the type of insurance that I have in the examples because I know it best. We choose a non-smoking family plan that has an individual deductible of $1750 in this hospital's network and a $2200 individual deductible in the national network. (I'll ignore the out of network coverage.) The maximum family deductible is $3250 in the hospital network and $4400 in the national network. After the deductible is hit, the coinsurance is 10% in the hospital network and 30% in the national network. On to the analysis....

There are five salary tiers that determine your premium. I will ignore the bottom tier because the lowest salary is $0 and it is hard to make comparisons. The bottom tier extends from $0 to $49999.99.

The next tier is for salaries from $50000 to $99999.99.  Lucky me, this is the tier for which I qualify. Barely. The cost of the family plan in this tier is $282 a month. As a percentage of salary for the lowest earner on the tier that is ~6.8% of the monthly gross income.

The next tier up is for salaries from $100000 to $149999.99. The cost of the same plan is $310 a month. So the lowest earner on this tier gets twice as much salary but only pays $28 more in premium. As a percentage of gross monthly income, the lowest earner on this tier pays 3.7% of salary towards premiums.

Let's jump to the top tier. The lowest salary on the top tier is $200000. The family premium on this tier is $385 a month. As a percentage of gross monthly salary, the lowest earner on this tier pays a whooping 2.3% of salary for insurance premiums. If the person on this level had to pay 6.8% of his salary like the people on tier 2, his premiums would be $1133 a month. If the person on tier 2 only paid 2.3% of his salary, his premiums would be $96 a month.

Now I am not suggesting that the percentages be kept even all the way up the tiers. What I am suggesting is that the people who make these decisions, who coincidentally all fall into the highest tier, are making empty statements about sharing the load while making sure it doesn't really bite them. They pat themselves on the back for their generosity while barely noticing the premium they pay. And that annoys me! If they were really concerned about alleviating the burden of premiums on the lower paid employees, the differences in premiums would amount to more than a daily Starbucks habit. I'd rather everyone pay the same amount across the board than be subjected to this preening. 

1 comment:

Melanie Bettinelli said...

That does seem pretty ridiculous to me.