Here's an actual email I got from a business friend the other day: "Jon, I never had dental insurance and am looking into family coverage. My spouse needs a $3000 procedure. Any thoughts on whether I should get it and any suggestions on policies?" Signed, Mary. (Not the real name but every other word is exactly as I received it.)
Here is how I wanted to reply:
"Mary, as a friend and an experienced financial advisor, I would expect you to have a little better grasp of the concept of insurance. You see, buying dental insurance for your 55-year-old spouse with a newly diagnosed dental problem is sort of like calling State Farm for homeowner's insurance after the garage is on fire! Now I can only assume you weighed the pros and cons of "never" buying dental insurance over the years. Would you care to guess at the premiums you have saved over that time. Here's just a ballpark figure: family dental at $50/month (a very low number at today's rates) over 30 years = $18,000. I would have thought at least some of that money - surely $3000 - might be in your HSA, right?
"Here is what I think you should do. Call someone in Madison or Washington and complain about your inability to get dental coverage because those greedy for-profit insurers 'cherry pick' applicants. Demand that government should finance your coverage because it is after all a right. And then when the government responds by putting out of business the agents and insurance company executives who have brought consulting work to you these past 30 years, you - like us - can find a new line of work. See you in the unemployment line."
Of course, I'm reluctant to actually send this reply to my friend. (I'll just post it for everyone to see!) It does illustrate a related point. High-deductible health insurance on a young healthy person can be purchased for less than the cost of monthly cell phone service. Yet millions of young Americans badly prioritize and chose to be uninsured. Later on in life when their health goes south, they consider insurers that underwrite risk to be unfair.
That's a crock!
Jon Rauser is president of The Rauser Agency Inc., Milwaukee. He writes an ongoing blog about the health care industry at www.rauserhealthreview.com.
3 Comments
We can talk about the lessons of this little morality tale all we want. It is a fact that no matter what you talk about; saving for the future, health insurance or for that matter sex education, a vast majority of young people not only have trouble seeing into the future, but have more of a risk taking personality then when they reach a wise older age.
So what do we do? Certainly not think we are going to continue to resort to the punishment of stark reality later on because that is not on the radar screen of most people under 30 or even older.
Besides, why would someone want to buy a policy that hardly covers anything (high deductible), even if it does cost as much as a cell phone plan. Many young people in this economy can hardly afford the cell phone plan.
I know Jon has to defend his trade, but the fact is we have to come up with a better solution than what we have now. If the solution doesn't include his business then that is the hard economic reality, similar to what many have of us have to swallow when it comes to globalization.
Keith, what is the difference between a kid paying into a government program versus a private program. They have to choose to join either way. Will the government program be more lenient to the people that don't pay in until they need help. Probably, but when do we let people suffer the consequences of their actions (or inactions)?
Sooner or later, we all need to give our kid our best advice and let them go out on their own. If we don't we end up with a country full of sheep constantly bleating for help rather than grabbing a boot strap and getting on with living.
You mean kinda like the folks on Wall Street?