I was home with my family last week. That meant a lot of time at the playground, a lot of reading Seuss and then once the kids were slightly more exhausted than I was, grown-up task time. The first three days was cleaning up the basement tool room. It is no longer an eligible Super Fund site. The other major task was doing last year’s tax return and talking through the family budget with my wife for 2017. Yes, very exciting stuff.
The start of the process was box 12-DD on my W-2. This was how much of the family’s health insurance cost. It was significantly under the Cadillac line and 3% more than last year. We spent some more this year as my wife had a surgery but even with that surgery, we were a net profit center for my former employer. The family’s individual medical loss ratio was under 75% of the total premium.
My family had three distinctive utilization patterns that are fairly common. My daughter and I are part of the 50% of the population that uses 3% of medical resources. We each had a well visit, a flu shot and no other interactions with a billable service. I had a couple boxes of mint and honey tea for sniffles and a box of Claritin for allergies. My daughter had ice cream several times for psychological placebo effects. This utilization pattern is common and it means that basically any system of reform won’t matter to us if we repeat the same pattern next year.
My son had a well child PCP visit, a few vaccines, a flu shot, and a pair of sick child PCP visits for a nasty rash and a nasty case of daycare crud that turned out to be nothing. He also has successfully been able to control his asthma with the combination of a brand name preventative inhaler and emergency generic nebulizer tubes. The nebulizer tubes cost $5 every six to nine months. Without the inhaler, his total spend would be under $600 for the year. With the inhaler, he probably costs $1,500 for the year. At this point healthcare reform could touch matter as he has a low level chronic condition that we hope he will outgrow at some point.
My wife is usually healthy. She normally has a utilization pattern that looks a lot like mine. This year she had a one-off event of a surgery. We have fairly high actuarial value insurance so the insurer paid some for most of it and we paid for some of it. In 2016, my wife was around the 75th percentile in healthcare costs. In 2015, she was in the 15th percentile. And we hope that she’ll be down in the 30th percentile in 2017 (I need to bug her to get her well visit in every year) As a one time event, health care reform of any sort would hit us to some degree as the push towards lower actuarial value plans with more cost sharing would have made this surgery more expensive.
My family’s utilization patterns are why health finance reform is so difficult. We have protection from “get hit by a meteor” events including getting old, and other than that, we don’t touch the system too much. Even in a high cost year like 2016, we are net contributors to the pool that pays for people who got hit by a bus or who have long term chronic conditions. Since this is what I do for a living, I’m more than fine with that, but this is where people scream that why should they pay for XYZ when they’ll never need XYZ (or until they need Z). There are far more no and low utilizers than super utilizers but that is common in every form of insurance.