Tuesday, October 16, 2012

Choosing healthcare coverage

It is open enrollment time for the people of America. If you are now Medicare eligible you can choose to have your government pick up a sizable portion of your healthcare costs. Whereas before you were paying an exorbitant premium for private health care insurance, now you can shift those monthly costs lower. In my case almost $1,000 per month to $68 per month. Now that is a deal !

That is like getting a pay raise of $932 per month. Not only do you get that extraordinary deal but there are hundreds of plans to choose from. There are almost 100 in the nice booklet the government sent me. Now don't worry if this stuff is hard to understand. Anyone of the 100'ish  or so company plans listed in the book will send a representative to your house to explain their particular plan to you and sign you up. There is enough profit in whatever plan you choose that these representatives get a nice commission and renewal fees for the rest of thier lives, as long as they remain licensed and you remain alive. So how can a plan like this save you money and pay somebody else commissions?

What we seniors fail to remember is that we paid into this plan all of our working lives. You remember under FICA in your pay check? You paid in 10's of thousands of deneros over your working career. Now you have lived long enough to start to receive this benefit. The principle of risk-pooling has application in this scenario. While you were paying in money the likelihood of your becoming ill was pretty remote overall. Besides you were paying into a private insurance plan simultaneously that covered those risks. Now you are  in an elevated risk pool because of your age. But not to worry, there has been enough money set aside to cover your costs.

I remember when I used to lobby state legislatures. Anytime there was a proposed piece of legislation that might affect Medicare you could drive by the local airport and see an entire wing of private jets parked there. They had been used to fly in their legal muscle to follow the legislative threat and buy up influence and insure  the safe passage of any adjustments so as to not unfeather their nests. It is a known fact that the insurance companies are rich beyond belief.

So now we are eligible to to benefit from the largess of this system. It is an emotional playing field and has become more costly  simply because of the swelling ranks of beneficiaries. We " baby boomers" are tipping the scale. Add in the fact that the ranks of the worker bees who fuel the system are dwindling and we approach a fiscal and political landscape. You will hear our politicians speak many cumulative sound bites about this emotional subject. One of my favorites is " If I am elected, I am going to see to it that Social Security and Medicare are placed in a lock box and protected from the intrinsic evil of my opponent who wants to throw granny off the cliff."

Who says that getting older is a drag? Just to live long enough to benefit from the many thousands of dollars that have been taken from my pay checks over the years is exciting. Of course the front loaded funds I put in are almost like the poker chips thrown on the table in Vegas or Atlantic City. How far is the gamble going to take us down the road?    

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