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Insurance Comparisons

My husband just got a newsletter from his work in the mail. In it, there was a summary of our 2010 insurance's annual reports for both medical and dental. We have gotten new medical insurance companies every few years, but have had the same dental insurance the whole time my husband has been with the company. (13 years at this point in time.) I could not believe my eyes when I read the report. How can our health insurance company keep up with their greedy ways in the middle of a recession? It drives me absolutely insane!

Medical premiums paid by employees of his company for medical amounted to $57,042,365.

Aetna paid out claims equaling $48,567,376.

Premiums - Claims = The profit made $8,474,989. This is just from one company's employees.

Yet they need to raise our premiums on a yearly basis by between $40 and $60 per month why? We certainly aren't seeing that big of raises in our monthly paychecks. Deductibles are high and they do not like to actually cover much of anything and find every excuse in the book to make us pay for each service out of pocket.

Curious, I decided to do some math to figure out how much each family paid Aetna to line their pockets. I know my math isn't exactly right as not all people have family coverage or the best plan like we do, but I thought I'd aim for some ball park numbers just to occupy my mind and satisfy my curiosity. I am also unsure of how much they pay their employees or how many they actually have on staff, but I think my guesstimates are fairly reasonable. Here is what I came up with:

We paid $144.10 per week for our family health insurance coverage.

Multiply that by 4 and we paid $576.40 per month.

Multiply the monthly amount by 12 and get $6,916.80 as our yearly premium.

This is where the math might seem a little fuzzy to you, but I wanted to find out my share of the overcharges. Dividing total premiums received by our monthly premium amount gives us the number of families served if all of the payees had family plans. $57,042,365/$6,916.8= 8,246.93 families.

Granted some of the profit is paid to people who use our money to pay our bills, but now to find out how much Aetna charged each family to earn their profits. I took the profits that they made and divided it by the number of families who paid in premiums.

I wonder how many employees it takes to service these accounts? Is 8 a fair number? That leaves each of them to deal with customer issues for 1,031 families. If they were paid a salary of $60,000 per year (just guessing here...) that would take $480,000 out of their profit of $8,474989 leaving them only $7,994,989. Let's say $100K for overhead stuff (utilities, phone, etc) that leaves $7,894,989 profit. We were each bilked out of $957.32 just so they could make a tidy profit. Does anyone else think that companies should not be in the health care business to make money?

I believe that is where all of our problems are coming from. If you are in it to make a large profit you raise the prices of procedures every year, making insurance companies pay you more for each service provided, increasing the premiums of each consumer involved until no one is able to afford anything at all. No wonder our health care industry has so many problems! People are also dropping insurance left and right because they simply can't afford it. Health care clinics are unwilling to work with people who can not afford to keep paying more money toward their bill every year so more people simply don't pay and end up declaring bankruptcy which leaves the company holding the bag so they increase prices some more to cover their losses. Add to that the people who sue places for millions of dollars just because the lawyer told them they have a case and won and you have a perfect way to bankrupt an entire country.

With everyone out there only to get money for themselves any which way they can and no one looking for the common good of mankind, no wonder we're in such a pickle!

In contrast to our health insurance there is the dental insurance.

We pay $4.92 per week x 4 = $19.68 per month x 12 = $236.16 per year.

We each go to see a hygienist twice per year, we only go to the doctor once a year. Hmm...

Premiums paid to Delta Dental by employees of his company $2,580,841.

Claims paid by Delta on behalf of same employees $2,390,665.

Premiums - Claims = Total profit $190,176.

Taking premiums paid divided by how much we paid in premium is giving me the number of families served. $2,580,841/236.16=10,928.358

Taking the profit of $190,176/families served 10,928.358 leaves each family paying an extra $17.40 per year not counting Delta's expenses.

Sorry, I'm not going to do the math here to figure out how much of that goes to employees and such because it simply isn't worth it to me. Obviously they provide some services and deserve to make a little bit of profit. They also do not refuse to pay things like our health insurance company seems to enjoy doing leaving me to pay most of the bill.

I have a much higher opinion of Delta Dental than I do of any health insurance company that I have ever had.

Obviously dentists make money or they would not be open and running their own businesses. (Not run or owned by corporations I might add.)

The dental insurance makes money or they would not be in business. They treat their customers well or they wouldn't have more customers than the medical insurance company has.

I often hear the excuse that doctors are highly paid because of the number of years they went to medical school, but don't dentists and vets go to the same amount of schooling? Sorry if you buy that line, but I don't! Look at you vet bill and dentist bill next time you go to either one and compare it to your own medical doctor. You probably see the doctor at each place the same amount of time, right?

Is there a lesson to be learned here? I think so! Actually I believe there are several noteworthy lessons here.
1. Treat your customers well, they are not just giant ATM's.
2. Profit can be made without ripping off your customers.
3. Work with your customers, when you help them you help yourself.

Thank you for stopping by to chat with me. Please leave me a message, I'd love to hear your thoughts! Cindy
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