I would submit that this is exactly what those companies want.
Look, they’re selling a product, right? They would be fools to pass up opportunities to up-sell customers by labeling highly profitable offerings with marketing terms like “BEST SELLER,” “Find Doctors,” or my favorite - “Platinum” plans.
But the most subtle, yet successful way that these companies sell overpriced, profitable policies is through fear. Fear of how expensive healthcare must be because we’ve had “the rising costs of healthcare” drilled into our minds for decades. Fear of racking up exorbitant healthcare bills if you or your family really get sick.
As I’ve pointed out again and again though, healthcare doesn’t have to be expensive.
So forget copays - and all the other smoke and mirrors thrown at you by health insurers - when comparing policies for a given year. There are only three terms you need to consider if you want to find the best deal:
The annual premium (P)
The deductible (D)
The Out-of-Pocket maximum on healthcare costs (O)
All of these variables are set by the insurer and should be easy to find in the policy details. You can add them up using this formula:
T = P + [D + (O - D)]
Where T is the TOTAL amount spent on health insurance PLUS healthcare, for any given year.
Simplifying the [D + (O - D)] term, where the D's cancel each other out, we get:
[D + (O - D)] = O
and this leads to the Wacasey Equation:
T = P + O
T is a very important number, because it represents the most fundamental way to truly compare different health insurance plans. For example:
But wait! I've just mathematically proven that the deductible doesn't matter when it comes to shopping for health insurance. Instead, only two terms - the Premium and the Out of Pocket Maximum - are really needed to give a rough idea of your expected spending if you are say, hit by a train in any given year.
Look at it this way: P represents what you will pay if you stay well, and O is the amount you might have to spend if you get really, really sick.
Of course this isn’t the whole story, and there’s more fancy math we need to review in order to demonstrate that, when it comes to health insurance, less really is more.
But first, we’ll discuss Platinum, Gold, Silver, and Bronze. And I don't mean Olympic Medals, or Rock 'n Roll records...
Remember, It’s not the COSTS of healthcare that are outrageous…it’s the CHARGES.