“Grab the insurance card and meet me there.”
When my wife frantically spoke those words as she hung up on me, I received them quite literally. My youngest son, just 18 months old at the time, was headed to the ER in an ambulance because he was exhibiting difficulty breathing. Frustrated and stuck in traffic, I tried calming myself with an inner dialogue that went something like this:
We have good health insurance and this scenario is the exact reason we have it. I am so thankful my employer provides it. Using an ambulance and the ER visit might not be necessary, but we are able to play it safe – so we will.
Fast-forward and I am now a Member of Sedera, a company committed to providing an alternative to the traditional health insurance model and thus an alternative dialogue to the one I had with myself two years ago. What would the alternative look like, now that I have the benefit of hindsight and knowledge of health care costs?
Care and perceived value:
I was encouraged when I took my job and peers told me it “included one of the best insurance plans you can get.” I had no idea what that entailed, it just sounded pretty sweet. Like most Americans, I viewed my monthly income as the amount deposited into my bank account after deductions were pulled. Perhaps that made it easier to swallow that even after covering around 75% of the plan, my employer still took out over $300 per month for the plan. It was as if that money was never mine, to begin with.
So what was this amazing health insurance providing for me and my family, which at the time included a one- and three-year-old? We “saved” money on regular visits to the pediatrician and doctor. And we were “covered” when making the decision to use an ambulance to go to the ER when my youngest experienced respiratory problems. We could “play it safe,” and to do so we only had to hand over a card. That was the value.
Reality and the alternative:
The total cost for the ER visit, hospital bill, and ambulance ride after insurance was $2,537. The total amount of money deducted from my paychecks that year was $3600. So in 2018 alone – not including money “spent and saved” in doctor and pediatrician visits – we spent $6,137 to have an emergency visit to the hospital “covered.” Conversely, as a Sedera Member with the same circumstances, I calculate spending about $2200 that year for the same emergency.
With an IUA of $1000 and an employer contributing 75%, a monthly membership would cost about a third the price of what my insurance plan had cost, saving me $240 per month. I would then put aside that difference into a savings account dedicated to health emergencies, and by the end of the 2018 I’d have $2400 saved up that was mine. When my youngest was experiencing difficulty breathing, we would have acted similarly, heading to the ER only this time as cash-pay patients. We would’ve paid our $1000 IUA directly out of pocket, and we’d still have $1400 left in savings. By the end of 2019, we would’ve refilled that account to $3800. And by today, that account would be adequately full for many needs/IUAs, and I’d be putting money aside into investments instead.
We need to start owning our health care costs. We must stop treating health care costs as an automatic deduction, toward some perceived value that we can neither control or choose. This involves planning ahead, questioning what has become routine, and thoughtful reflection. I challenge anyone to go back and calculate their health care costs from the past few years and ask themselves, “What did I pay for?” and “Is there a better option?”
Emerson Brown is the author of this Health Savvy article. He is the Head of People and Culture at Sedera. Prior to his time with Sedera, Emerson was a history teacher. He brings his love of teaching and bringing people together to Team Sedera each and every day. He lives in Austin with his wife and two sons.