Benefits and Economics Lesson

Benefits enrollment at work for 2013 began this week and ends sometime in November.  Being a big procrastinator, you might think I would wait until the last minute to enroll, but that is almost never the case.  I'm very serious about making my benefits elections, so I usually do it the first day.  There were a few things of interest that I observed.

First of all, my company's plan is "grandfathered" into Obamacare.  I'm speculating this means we have good lawyers and lobbyists and don't have to follow as many of the Obamacare rules in an effort to try to save money.

Our drug coverage plan for 2013 will have some "Tier 0" drugs where employees don't have to pay any part of these maintenance drugs like blood pressure medication, cholesterol medication, diabetes medications, etc.  I don't know this for a fact, but I'm guessing this might be mandated by the government and the company is choosing to "spin" it like it's some really nice feature they're providing.  Either that or the drugs are cheap enough that it's not a big deal to cover them.

The total amount spent on healthcare benefits between the company and its employees is close to $200 million annually.  This averages out to $5000 - $17,000 per employee / family per year depending on the type of healthcare services they need.

The total cost of healthcare benefits for my company in 2013 will increase well over $15 million.  The corporation will be paying for 85% - 90% of the $15 million increase.  They are requiring their employees to pay for 10% - 15% of the increase, which is why our contributions will increase by 7.5%.  When a publicly held corporation says they will pay for something, guess who really gets to pay for the $15 million?  Stockholders (reduced dividends), customers who buy our products (higher prices), and employees (fewer benefits/perks and lower salaries).

I will pay $71 more this year on medical premiums.  The year before that, the premiums increased by $45 for the year.  The year before that, it was $60.  At first it seems like $71 spread over a year isn't such a big deal.  However, if every year the premiums continue to increase at that rate, after several years you will be paying hundreds more than you were five years before that.  In the space of three years, I'm already paying an additional $176 per year.  To summarize, our premiums have increased.  Not as much as Romney said they would, but they didn't decrease like Obama said they would.  The good news is my deductible gets to stay the same at a lovely $2,000 with an additional $2,000 employee responsibility maximum per year.  I suppose that's better than some, worse than others.  Maybe next week I'll dig through all my statements and make a graph of my insurance contributions for the last 5 or 10 years.

I am documenting this for future reference and to try to get the "real" facts on the state of health care in our nation.