One Step to Fix the Health Insurance Problem

What difference can one person make? A lot when it comes to health insurance. My company recently hired one person with a pre-existing health condition in the family. The change in health premiums? More than $24,000 a year. That’s a 42% increase in our annual premiums due to one health issue.

And that’s why we have nearly 44 million uninsured people in this country. Neither employers nor individuals in low-wage industries can afford the cost of insurance when a serious health issue is involved. And the way group health insurance works in the U.S. makes it almost impossible to work around it.

Take my situation, for example. Due to the nature of the work, our average wage is right around ten dollars an hour. Economics keep us from paying any more than that. Yet the one employee above requires health insurance that costs more than $11.50 an hour, which is on top of her normal wage. That alone makes the employee uneconomical. He or she will not be able to generate enough profit to cover the cost of insurance.

So I have three options (keeping in mind that I can neither legally nor ethically fire the person). I can eat the cost myself, which I cannot afford. I can pass the cost on to my employees, which they cannot afford. Or I can drop coverage altogether, in which case we’ll have twenty more families without health insurance.

If I pass the costs on to the employees, it can be expected that a number of them will drop the coverage. If we lose any more participants, we will drop below the 50% participation threshold insurers require to provide group coverage. That requirement exists so that carriers don’t find themselves covering just the sick.

But that’s precisely what happens. I already have healthy, young employees who have found individual coverage that costs far less than it does to participate in our plan. The only ones who remain are those with health issues.

One thing that would help would be the ability to join a larger group so that risk gets spread around, but the way it works now – well, it just doesn’t work.

That’s because even when part of a group – say the chamber of commerce, for example – each employer is still considered a separate group within the combine. So risk is not spread and small employers still bear the brunt of high-risk workers.

Even when groups treat all employers as one large risk pool, when high risk members join, the group’s premiums increase. Insurers then come in and cherry-pick the low risk employers with promises of lower premiums. The program eventually crumbles under oppressive premiums as only the highest risk employers remain.

So what’s needed is to find a large group that small businesses can join which will spread the risk, without fear that the larger group will bolt the program.

One such group exists – federal government employees. They have negotiated benefits administered through private insurers. It is not government health insurance. But it consists of a large, diverse group that would spread the risk far and wide. But more important, federal employees would not be able to flee the group in a way that now leaves small employers in the lurch.

Let small employers buy into that plan and they might no longer face premium increases of 42% because of one unfortunate health situation. And we might actually see a few of the 44 million uninsured finally get coverage.

Teaching Kids the Joy of Accomplishment

Most people are shocked to learn that I wrote my newspaper column for a year before the idea of getting paid for it even came up. But you know what? I love writing it – so much so that I would do it for free. And I did.

Everyone should be so lucky to find things to do in life that they enjoy so much that they would do them without pay. Obviously, that’s not realistic, but I am a firm believer that true success is measured by the joy and satisfaction that comes the endeavor, rather than by financial reward it brings.

This is a lesson I am trying to teach my kids – that money does not buy happiness. It’s walking a fine line trying to teach them the value of money, without making them money-obsessed. At the same time, I want them to appreciate the satisfaction that comes from a job well done, without them feeling that they should get paid for everything they do.

So how to teach them the value of money and the joy of work? This is just my two cents worth, but the bast way is to keep the two – the value of money and the joy of work – separate.

First, I do not believe in paying kids – especially young ones – for doing the things around the house that they should be doing, like cleaning their rooms, picking up toys or helping me sweep the garage. Instead, I want to reward them with thanks, a game of monkey-in-the-middle or just standing back and pointing out how good things look. I want them to feel the satisfaction that comes from a job well done.

Second, I say no. A lot. There’s not a time that we walk past a candy aisle or a toy display or a gumball machine that the kids don’t ask if they can have something. A trip through Walmart is a trip through the gates of parental hell. Can I get this? No. Can I have that? No. How about this? No.

Why not? Because it costs money, and we can’t spend it on everything you see. We need to save it for the things we really want. Now, obviously a quarter for a gumball is not going to prevent me from paying for the groceries, but they don’t need to know that.

Third, I do believe in giving them a small weekly allowance that they can spend on a small toy, or save for a while if they want to buy something bigger. Then when they ask for something, I can tell them to save their money. Nothing places a value on cash as quickly as telling them the thing they want is ten bucks, when they’ve only got six.

The time will come when they’ll realize that they can jumpstart their financial independence by doing things of value for others. Then they can get paid for working. But hopefully by then, they will have developed an appreciation for a job well done. Getting paid will be icing on the cake.

I’m no parenting guru and I do not claim to have all the answers – not by a long shot. But if I can get my kids to take satisfaction from their efforts, regardless of the financial rewards, then I’ll feel that I’ve been successful. More important, they’ll feel successful in ways that money could never buy.