Thursday, March 5, 2009

Insuring the Uninsurable

In February's Dose of Reality, Davis looks at the some 60,000 Alaskans who are refused health insurance by the for-profit industry and the alternative they are provided by the state: health insurance so expensive that almost no one has purchased it:
The cheapest ACHIA policy is a PPO plan with a deductible of $15,000 and maximum out-of-pocket expense of $25,000. A person twenty-five years old can buy this policy for $1,848 per year, but it costs a sixty-year-old person $6,384. Each of those persons is at risk for another $25,000, the out-of-pocket maximum, and each will have to pay the $15,000 deductible before receiving any benefit whatsoever from the policy. Thus the twenty-five-year-old will pay out only $1,848 for health care if he needs no health care during the year (all money goes to policy premiums) but at worst he might have to pay out another $25,000 for the health care he needs before the policy covers all costs thereafter. Thus, his worst-case expenses are $26,848 per year.
How many 25-year-olds can afford $15,000 in deductibles?

1 comment:

Andrew said...

Anyone purchasing insurance of this type is probably going to have to choose between paying the premiums or obtaining medical care. As I did. It should be labelled anti-health insurance.
I finally cancelled a similiar policy and took the money I saved and went overseas for actual medical treatment. Travelling when you are sick! What a drag.
Andrew Smallwood