OP-ED

Health Insurance is Wasted on the Young

There has never been a time in my life when I’ve owed a lot of money. That certainly has changed these past two years as my husband and myself find ourselves with medical debt that we may never pay off . As you can guess, we have no health insurance – we can’t afford it and even if we did have an extra $650 a month we couldn’t obtain it due to our pre-existing conditions.

Briefly, I had emergency surgery to remove a cyst on my ovary in 2010, a diagnosis of an auto-immune disease in 2011 and two bladder cancer surgeries in 2012. My husband has had high blood pressure for over 25 years due to a heart defect discovered in his 30’s.

My husband and I live very simple lives and have little debt. For the past 18 years we’ve been self-employed, owning a retail music store, and for many of those years I worked for other companies. Some offered medical coverage, some did not. And for some of those years I was able to offer medical coverage for our few employees which also covered my husband and myself. The group coverage was minimal and started out being affordable but with increases it was impossible to afford for long. I tried catastrophic coverage but that was almost as expensive as regular coverage but with a higher deductible. Of course, neither my husband nor I needed the coverage when we had it! They say youth is wasted on the young. I say health insurance is wasted on the young!


The medical community has been great. From the cashiers who expect payment for services rendered that day to the lawyers who try to collect for the hospital system. They all understand and have spoken with many people who can not pay the high cost of medical services. I continue to be touched by the expressions of concern and their desire to help.

In October I had to visit my OB/GYN after not seeing her since 2010. As I explained all the medical woes I’ve experienced since our last visit we talked of the uninsured people who work but don‘t have insurance. She surprised me at the end of the exam by not charging me! To say that it was a relief not to incur yet another bill is an understatement. I was brought to tears. Last week I had my first mammogram in three years and I expect the bill to be over $300. The last time I had a mammogram it was around $100! The technician encouraged me to have one next year but then understood my reluctance due to the cost so she gave me contact info for the Susan Komen Foundation. So I will use that resource next year thanks to her kindness. And I don’t have words for the services from the free clinic. They are the only reason I can get a 3 month checkup for the bladder cancer. It’s over $800 for a check up at the Urologist office.

Preventive care is a luxury for all the people I know who own small businesses. Very few I know of have health coverage. Mammograms? Colonoscopy? Annual checkups? We have to see blood before going to the doctor. It’s a given that minor ills like the flu, ear ache, aching joints, and unfamiliar pains don’t warrant doctor visits. Much less a trip to the hospital’s emergency room services where a visit costs several thousand dollars. While my husband and I waited for admittance into the hospital through the emergency room for the cyst surgery we overheard a woman asking to be seen for carpel tunnel syndrome. She’d evidently had been there before too. Carpel tunnel syndrome is an emergency?

So my husband and I find ourselves in our mid to late 50’s in the terrible position of trying to find doctors that will see us without insurance, trying to explain to bill collectors that we must pay in (very) small installments and trying not to be too embarrassed about our situation. And it is embarrassing. Owing $20,000 is like having a weight on your shoulders and it’s very worrisome. You can image what the cost was before the hospital system gave us a charity case discount.

I still consider my husband and myself young and in good health. We do all the rights things about taking care of ourselves and expect many more wonderful years together. But we’re really looking forward to age 65 when we’re eligible for Medicare!

Kelly Wooten and her husband have owned a music store in Greenville, SC for 19 years. This post originally appeared in Costs of Care.

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32 replies »

  1. I resent being called a free rider and the insinuation that we don’t work. We both work full time and have part time jobs.

  2. I resent being called a free rider and the insinuation that we do not work. Self employment is work (45 hours per week) plus the part time jobs that we both have.

  3. I resent being called a Free Rider and the insinuation that we don’t work. Self employment is work (an easy 45 hours per week) , not to mention the part time jobs that we both hold.

  4. I didn’t mean that that statement literally. Yes, I know thousands of people under 55 have medical issues. The point was that for all the years I paid for insurance I didn’t need it. Now I can’t affort it and need it.

  5. Deductions are great but it’s still cash out of pocket that is hard to come up with. Yes, we save what we can. The Dentist and Eyecare takes care of some of that.

  6. agreed- I’m 25 and I am doing everything I can, paying more than I’d like, to make sure I keep my insurance because I severely need it for my chronic illness. I don’t know where I’d be without insurance, because I can barely pay my medical bills WITH the insurance.

  7. What you call welfare, I call a public good.

    The fire and police departments and the public library are pure welfare, and that is all to the good.

    Everyone pays for these institutions and everyone can use them.

    I know that health care is more complicated than that, but I cling to the principle of public goods.

  8. Fair enough. However, when the government restricts an insurer from underwriting and other risk management abilities, it is no longer insurance. And, when you base premiums (or benefits) on incomes, it becomes welfare.

  9. Well your link is just freedom from government. Give us all our own choices and the world will be perfect. Fine for those who can afford all the choices.

    In insurance that would be buy what you can afford, need, want – no risk sharing except for segmented groups in their own risk pool.

    The risk is the risk. It’s there whether or not insurance wants to cut it up and dice it around. Countries that use social insurance for health care also need to pay for it – they also do a better job of controlling costs – if double for the U.S. is any indication. But they pool the risk – all the risk, and distribute the load so that people can choose from other things that maybe don’t matter so much.

    I’m not a fan of the ACA, was, but as usual so many financial palms had to be greased the system will be a dogs breakfast with the same costs – just with more subsidies.

  10. I do not expect private insurance companies to set rates based on income.
    They would go broke if they had too many customers with low incomes.

    Only a Medicare-like program can set premiums based on incomes, whether they are called premiums or more accurately taxes.

    The ACA tries to do a mixture of American business and social insurance.
    First the insurers set rates based on age, smoker status, gender, etc. and then the subsidies tries to square up what you really have to pay as a percent of income.

    It is a messy marriage and we see the mess more every day.

    I favor a core benefit of Medicare for all, though with a fairly high deductible like $5000. This would be paid for by taxes.

    Under $5000 I turn into a libertarian. Let people buy or not buy insurance, let carriers charge what they wish.

  11. “I believe that insurance premiums should be tied to income, not age or health status.”

    Then, you must be against The Act as it outlaws private insurance carriers from considering anyone’s income when setting premium rates. Instead, The Act was suppose direct the government to arrange for the subsidy to offset the non-income based premiums (only in state established exchanges). Therefore, The Act grants the government with the power to determine which income levels merit what subsidy (only in state established exchanges) to be bestowed (doled out, literally). This was before the government capriciously and arbitrarily decided to pick and chose which parts of the law they felt like implementing based on the political winds of the week. So now after outlawing private insurance carriers from setting premium rates based on earnings so the government was in control of doling out (or not) the graft, the government has decided the subsidy will not be based not on actual, documented income, but rather perceived, self reported income, because it is too difficult for the IRS to determine what someone’s income is (in this case, even with 16,000 more agents).

    In case you did not read the previously mentioned link regarding “social insurance”, please read and note it has never worked. http://www.afcm.org/healthcareprinciples.html

    Is it only libertarians that understand mathematics and common sense? You suggest that premiums not be based on the factors that are actually attributable to claims costs but rather income which has nothing or very little to do with claims cost. Perhaps air bags should be designed to ignore the laws of gravity and physics, but be based on the passenger’s income or political leanings instead. Thanks.

  12. “I believe that insurance premiums should be tied to income, not age or health status.”

    Bob, every once in a while we get the insurance executive libertarian type who lives by the law of the jungle credo – usually with their company subsidized health care. Insurance loves to segment the market and carve out profitable niches for those who have no choice. I’m not optimistic about the coming exchanges either – they’ll get their pound of flesh.

    I’m with you, it should be social-insurance. May not be perfect but every other industrialized nation seems to make it work.

  13. The real gap between libertarians like Aurthur and social-insurance types like me is this:

    I believe that insurance premiums should be tied to income, not age or health status.

    As is done in Germany, France, Scandinavia, Spain, Israel, Japan, Australia, and indirectly in Britain and Canada.

    A wealthy older person and a wealthy younger person pay about the same for the core insurance package. Age and health have nothing to do with it.
    In those countries, the private insurance industry is limited to supplemental coverage.

  14. “I do not “deny” people may drop their individual coverage right when they need it the most.”

    This is the failure and hoax of private insurance. It serves the insurance industry, the providers and those not needing it – it is not intended to provide access or health care.

    When I was insured on the individual market my premiums would go up 6%-10% compounded annually with an additional age bump every few years – no subsidy, no tax deduction. Not even close to reality wage increases or the overall inflation rate.

    If private insurance kept it’s bargain (if it ever had one) on doing something to keep costs under control instead of just being a middle man for exchanging dollars and happy to make their 5% cut on ever higher premiums I’d support it.

    Actuaries won’t solve this.

  15. Mr. Hertz, Our government cannot legislate faulty mathematics. Fact is, incomes do generally go up with age significantly for folks up to at least age 54 and even the 54 to 64 group earns substantially more than the 25 to 34 bracket (see link below).
    Premiums for individual medical plans (10% of market) do increase as these folks get older.
    However, at least one study http://www.ahip.org/Individual-Health-Insurance-Survey-2009/ shows average individual premium for 64 year old was 4.2 times that of someone under 18 (the lowest rates and lowest claim generators).
    Your “actuarial fact” that claims costs go up 6% a year after age 40 means a 64 year old has over 4 times more claims than a 40 year old. You are upset that carriers are raising premiums on folks over 40 at a rate proportionally less than the increase in claim cost.
    Further, The Act outlaws carriers from charging an 18 year old less than a third of what they charge a 64 year old. In fact, the slope of the rate curve must be steady from 18 to 64 or 6.5% per year (300% divided by 46 years).
    Please let me know what the actuarial fact is regarding health care cost increases for folks between the age of 18 and 39. I bet it’s less than 6%.
    I do not “deny” people may drop their individual coverage right when they need it the most. I do not believe this is very smart and I do not believe the government should punish the younger folks because of these older folks irrationality. Thanks.

    http://advisorperspectives.com/dshort/charts/census/median-household-income-age-brackets.html?household-income-by-age-bracket-median-real.gif

  16. Aurthur, you do not really answer my main point, which is:

    – health insurance premiums go up with age.
    – incomes do not always go up with age.

    A generous corporation covers its older employees anyways.

    in the individual market, people start dropping coverage right when they need it most, or they pay very large premiums to preserve some insurance.

    I do not see how you can deny this. If you think it is not a big problem and that older people should have saved more money to afford their higher premiums — well, I can respect that argument even if I disagree.

    But your tone is that no problem would exist without government. I think you are wrong.

    (Incidentally, my career was in life insurance. I still maintain that most individual health policies are lousy products.)

  17. Please recall it was government intervention, particularly after WWII, in the form of price and wage controls that resulted in the explosive growth in employer sponsored medical insurance benefits. The government’s attempts to artificially control and over regulate the private markets is the root problem with health insurance, health care costs, and many other ills.

    Below are links to insurance principles and a few other important principles today’s administration is outlawing. Next we can outlaw gravity and mathematics. I wish they would start with stupidity and ignorance.

    http://en.wikipedia.org/wiki/History_of_insurance

    http://www.afcm.org/healthcareprinciples.html

  18. “and contributions from my employer”
    “legislated all sorts of incentives”

    Aren’t subsidies wonderful.

    “go back to your 9 to 5 jobs”

    Which ones would those be, the ones where the employer CAN afford health coverage or the ones where he can’t or won’t?

  19. Mr. Peter1. I read the entire sob story very carefully.
    My health coverage, as of late, is paid for mainly by my income and contributions from my employer (thank you boss for sponsoring a plan when you are not required to). Apparently the government has been ok with this as they have legislated all sorts of incentives and loaded on all sorts of regulations encouraging employers and individuals to maintain insurance to pay for health costs. I have maintained a medical policy to cover medical costs since I was 18. My parents maintained a policy for me from the day I was born. I am aware this is not the case for everybody, but it should be. My parents and then I have understood I should not go a day without health insurance coverage. A couple of the reasons included not subjecting my parents and then me to financial crises due to lack of insurance coverage and the understanding that a gap in coverage could prevent me from obtaining insurance coverage in the future.
    I do not maintain an insurance policy because I think I need to use it in the foreseeable future. There have been times when the monthly premiums have been a significant chunk of my earnings. I maintain the insurance so I do not subject me, or my family, or my friends, or strangers on a blog, or even other tax payers to the potential exposure or even a misguide sense of obligation to pay my medical bills for me, while I complain I cannot “afford” the premiums.
    If you cannot afford the $650 a month, go back to your 9 to 5 jobs (both of you) and take care of your obligations. Thanks.

  20. “What PPACA erodes is the principles of private insurance”

    Aurthur, maybe you can give us those “principles” and how they, without government intervention, will solve our health care affordability and access?

  21. Mr. Hertz. Apparently Mr. Holt is some kind of Nostradamus. Next he will predict that the price of bread will increase and the sun will rise tomorrow.
    You cannot prove that private health insurance with no regulation will increase premiums since there has never been a time when private insurance was not regulated.
    Based on “actuarial fact” health costs increase 6% each year for each person over 40 (does medical cost inflation only affect people over 40?), a 64 year olds health costs would bet 4 times that of a 40 year old. Why does PPACA limit the premiums charged for a 64 year old at 3 times an 18 year old? Let me answer that. Because PPACA has nothing to do with actuarial costs or insurance. Limiting risk management by regulating away underwriting principles like pre existing conditions, loads for known risk factors like industry, gender, ability to pay premiums, upcoming transplants, height/weight, etc. in effect removes actuarial facts from the equation and invalidates the basic concepts of insurance. PPACA has not reformed insurance, it has outlawed it. Next, the administration will outlaw gravity.
    If you actually are in the insurance business, your clients and carriers should consider firing you since you either believe you are working in an industry that adds no value or you haven’t noticed that claims are actually paid. I believe a quick review of the individual carrier’s MLRs would suggest that at least some claims are paid. If you are not aware of this, you are incompetent.
    What PPACA erodes is the principles of private insurance that, much like gravity, are not subject to or manipulated by the intentions of politicians. Medicare is not, of course, helpful for private health insurance for 40 year olds. Under charging by 2/3 future Medicare beneficiaries, subsidizing the program with income tax payer money, and under paying providers and cost shifting to private health insurers is not a way to overcome the challenges of privately insured (only about 110 million) folks.
    I agree opponents of government action should recognize the problem(s) and I do. I believe proponents of government action also should understand the problem, and it appears you do not. Thanks.

  22. There are important issues in this post, and attacking the writer does not get to them.

    Two points come to mind about the insurance aspect only:

    1. Matthew Holt predicted about 8 years ago that premiums would inevitably rise even for high deductible plans. He told us so.

    2. It is an actuarial fact that health costs increase about 6% a year for each person over 40.

    Private health insurance with no regulation will have premiums increase each year also.

    Since people’s incomes do not increase every year (and in fact most people;s incomes hit a ‘plateau’ about age 50-55, then Houston we have a problem.

    Private health insurance will tend to become unaffordable just when people need it most.

    I am in the insurance business. A prominent actuary once remarked that term life insurance is designed never to pay a claim.

    The same is true for individual health insurance.

    The ACA is one way to partially overcome the erosion of coverage that takes place in private insurance. Medicare is of course the most powerful way we overcome this erosion.

    Neither is perfect. But opponents of government action must at least recognize the problem,

    Bob Hertz, The Health Care Crusade

  23. While I am all up for a conversation about health insurance, and while I know it was probably meant to be tongue-in-cheek, I am slightly offended by the title and the comment contained within this post. I am 25 and was severely disabled by a chronic illness between the ages of 8 and 21. While the chronic illness is currently largely under control (for now at least), I also have hashimoto’s thyroiditis, which can be a real pain to manage. I don’t mean to seem hypersensitive, but people with health problems in their youth are often made to feel invisible and comments like “health insurance is wasted on the young” add some insult to injury. Just something to be aware of.

  24. “She certainly could point out to other “Free Riders” that the $650 a month they will pay for coverage in the exchange as youngsters will go a long way toward subsidizing the maintenance on her burning house.”

    Aurthur, I don’t think you read this close enough.

    ” And for some of those years I was able to offer medical coverage for our few employees which also covered my husband and myself. The group coverage was minimal and started out being affordable but with increases it was impossible to afford for long. I tried catastrophic coverage but that was almost as expensive as regular coverage but with a higher deductible.”

    “trying to explain to bill collectors that we must pay in (very) small installments and trying not to be too embarrassed about our situation. And it is embarrassing. Owing $20,000 is like having a weight on your shoulders and it’s very worrisome. You can image what the cost was before the hospital system gave us a charity case discount.”

    She’s not ” free rider” but a victim of an out-of-control system. Maybe you could tell us how your health coverage is paid for?

  25. The quarter of The Brady Bunch above sure come across as heartless and not very sensitive or encouraging. I suggest Ms. Wooten consider becoming a navigator for an exchange. She certainly could point out to other “Free Riders” that the $650 a month they will pay for coverage in the exchange as youngsters will go a long way toward subsidizing the maintenance on her burning house. At $58 a pop, she only needs 11 or 12 to sign up each to pay for her freight. She possibly can convince them they need to be insured unlike her and her husband…”Of course, neither my husband nor I needed the coverage when we had it! They say youth is wasted on the young. I say health insurance is wasted on the young!”

    She may need to work on the sales pitch a bit, but you get the point.

    But then again, I don’t want to work, I just want to bang on the drum all day!

  26. “we can’t afford it and even if we did have an extra $650 a month”

    Isn’t medical insurance/expenses fully deductible for the self employed? Do you at least put away what you can afford into a simple savings account for future medical care?

  27. “But we’re really looking forward to age 65 when we’re eligible for Medicare!”
    __

    So, you’re really saying you want to Free Ride? e.e., given that you are empirically quite likely to experience significant medical costs as you age that will far outstrip, by orders of magnitude, the Medicare payroll taxes you paid in across your lives?

    You’re in great company.

  28. Your story is unfortunately a common one across America. Also self-employed, my husband and I have always had a catastrophic plan with low premiums and a high deductible. Over the last few years, the premiums have gotten significantly higher (85%) and the deductible lower until there is not much financial advantage in even having a catastrophic plan. Of course, such plans will not be available to the over 30 crowd on the insurance exchanges, anyway. It’s really too bad, because low-premium, high-deductible plans work well for healthy families (even those over 30!) who can’t afford costly premiums (not everyone will be eligible for a “generous” subsidy!).

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