Should a family of 5 have to pay more at a restaurant than a family of 3?

The answer is obvious, right?

They take up more seats, require more server time, and eat more food.

Family of 5

Why do I ask?

Since ObamaCare premiums have been back in the news, we have to ask the question.

Virtually all articles re: ObamaCare are saying “at least save the popular parts like allowing adult children on their parents’ policies until they are 26”.

First, the term “adult-children” gives me the creeps. But, that’s beside the point.

I don’t care if insurance companies have to carry 26 year olds on their parents’ policies, but I don’t understand why you & I have to pay for it … not the adult-children’s parents.

Now, practically all employer-sponsored  health insurance plans charge premiums in tiers: employee only, employee plus spouse, employee plus children, and employee plus spouse and children. Note: it doesn’t matter if the employee has 1 child or a dozen children … same premium.

Say what? Let’s take a look at the nums …

 

For example, the United Healthcare plan through Georgetown — which is probably pretty typical — charges:

image

Note that it costs  $7,346 to tack a spouse (or equivalent) — presumably an adult — onto an employee’s policy.

Then it costs an additional $5,746 to tack one or more children onto the policy.

Said differently, it costs $5,746 to add one child to the policy and nothing to add more kids to the policy.

So, those kids are free, right?

Only in Obama Land.

Each additional kid probably costs about the same as the first one — $5,746.

That unpaid cost simply gets spread across all policy holders in the form of higher premiums.

So, back to the 26 year old adult-children …. I’m ok if they get tacked onto their parents’ policies and pay $5,746 … but, I’m not ok being forced to pay for them.

All of which raises a broader issue: Why are children of any age riding free on health insurance policies?  Why not charge $5,746 for all kids, not just the first one?

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7 Responses to “Should a family of 5 have to pay more at a restaurant than a family of 3?”

  1. TTK Says:

    Many of your ObamaCare stories seem to center on the choices made by the insurance company or the employer.

    Given your price matrix above, the cost for an individual does not change as other employees add children to their account. I guess you are speculating that in future years you will be forced to pick up their costs?

  2. Andrew L. Says:

    I’m struggling to make this comment make sense to me.

    Is there any reason to suggest that adding more people to the pool will not increase the price of the premium?

    According to the Commonwealth Fund, 70% of premium increases are due to increases in unit price or quantity of medical costs.

    The unit price of medical costs continue to increase. For example, Express Scripts reports that the price of branded drugs has increased by 97% since 2008.

    The quantity of medical services consumed is increasing. Forbes reports that doctor’s office visits increased by 2.7 percent in 2013. Specialist visits rose 4.9 percent the same year. Hospitals tallied 13 million more outpatient visits in 2013 — a 3.2 percent increase over 2012. Inpatient visits rose 10.5 percent. Overall, hospital admissions increased 2.6 percent last year.

    Finally, adolescents increasingly require more healthcare. According to the Health Care Cost Institute, the health care expenditures per child were $2,437 in 2012 and growing at 5.5% per year.

    So what am I missing?

  3. TTK Says:

    I don’t disagree with any of the problem/issues you are citing. I guess my real question is, is the UHC pricing schedule legislated by ACA or is UHC making their own pricing decision? I’d love to go after the actual problems rather than pretending they all started 2 years ago.

  4. TTK Says:

    My specific issue with the original post is that the family of 3 will not be approached by the waitress and asked to pay more for the dinner they are eating. So they probably won’t get worked up about a family of five eating for the same price.

  5. Andrew L. Says:

    Yeah, you can’t just bash the ACA because things were pretty bad before. Medical costs are monstrously out of control, and were so prior to the ACA. Even if insurers didn’t pool the costs as “all kids eat for free”, kids would still run $2500 + 5.5% APR.

    The beef with ACA here is that it fatuously avoided tackling the medical costs issues – which are the heart of the problem – and instead fiddled with who pays how much, why, and when. The idea was that if they squeeze the payers, the payers will squeeze the providers, and provider costs will go down.

    The ACA isn’t mandating the pools, but they are defining the parameters by which the insurance companies are allowed to create the pools, So now you are getting these schemes as insurers try to balance the rules with the payments with, you know, decent healthcare.

    So the waitress isn’t handing off part of the 5-person check to the 3-person table directly, but next week the restaurant is reprinting the menu and everything is going to cost a dollar more.

  6. TTK Says:

    I don’t disagree with a word you wrote. Being confronted with true costs is probably the only thing that will focus people on fixing the underlying problems. Blaming Obama is an easy distraction, but his mere presence seems to create an angry dementia in otherwise intelligent people. He did his job and got the bus rolling. I hope we can all cut to the chase and that the majority holding republicans take this opportunity to shape the law.

  7. Andrew L. Says:

    Well, sort of, I think. The difference with ACA and, say, the tax code is that huge portions of the ACA are entirely under the jurisdiction of executive branch agencies. Many of the rules that govern mandates, pools, reimbursements, prohibitions, etc. are wholly within the jurisdiction of HHS, IRS, and others to re-write.

    A capable public health professional as Secretary could literally re-write the impact of the law from the ground up within the confines of the legislation. The President, tomorrow, could take steps to dramatically improve both the process and the outcomes if he wanted. Today even, I’m sure some of the documents are already drafted. He won’t, mind you, but he is deciding not to.

    I’m certainly not defending the Congressional Republican policy (is there a policy?) at present, I’m just saying that no one’s hands are clean. The method of passing that bill so damaged objective debate on the subject that we’re going to need new players to get a new solution.

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