Waffle House, Walmart, and Health Insurance

Let me start by saying, as a consumer, Waffle House and Walmart are two of my favorite places on earth as both represent tremendous value.  They also represent hard work working Americans and are very much part of the fabric that makes this country a wonderful place to live. 

Last night my son and I were playing bachelors, and me, having recently dropped a pint of blood off at my local Red Cross Blood center had a “free” waffle coupon sitting in my wallet as a small thank you from the folks at Red Cross. Heck, I’d have done it for the juice and cookies, but if they want to motivate me to the Waffle House, well that’s ok too.

Anyway, we were the only folks in there on a Sunday evening and we got to talking with our waitress.  Turns out she works two jobs, one at Walmart and the other at Waffle House.  In response to her taking a jab at the employer under whose roof she was not at that moment standing, I made the comment, “well at least they offer health insurance,” she rolled her eyes and said, “that’s no good, it’s only “catastrophic” insurance.  When I asked her what the deductible was she said $2,000.  Now, I don’t know if that was totally accurate or not, but I made the comment, knowing Walmart is almost completely, if not totally utilizing High Deductible Health Plans with HSAs, that, in the unlikely event she were to ever to be in a situation where she had over $2,000 in expenses, even if she didn’t have the money right then, a $2,000 debt was something  from which  most people including her could recover.  

She then proceeded to tell me that she got her health insurance through the Waffle House and that she had a monthly premium of $145 ($1,740 per year), a  $50 annual deductible and then her insurance picked up 80% of the ticket and she was responsible for 20%.  Again I don’t know if her numbers were exactly right, because after all, how many people on group health insurance plans actually know the details of them?  Frankly, it really doesn’t matter.

I then suggested to here that in the even she ever got really sick and here hospital bills were say $10,000, then she would still be stuck with $2,000 out of pocket (maybe more, depending what, if any, her out of pocket maximum was) plus her $1,740 in annual premiums and had she been in the Walmart plan, she might actually be better off.  I also mentioned that if she took her premium savings from the HSA type plan and put them into an HSA, if she ever got sick, she might already have a big chunk of the $2,000 deductible saved for in her HSA.  She said there was no way she had any extra money to put into and HSA.  I mentioned that she had $145 per month she was already putting into her premiums through her other plan.

In the end, I simply suggested, given the fact that she was in the fortunate situation of having multiple options, that she might want to take a look at the math.

The point here is not me trying to sell her on a plan that I pretty much knew nothing about or trash her current plan which I also knew nothing about, but rather about the nature of insurance, the complexity of it for most of us, and how many people look at it.  I think the case of my Waffle House friend is fairly typical of many Americans.  They look at their health insurance merely as a way to finance their health care as opposed to using insurance as it was designed, to manage risk. In my opinion, that’s totally backwards. Secondly, between the insurance companies and the Government, they make it so flippin’ complicated, it is no wonder people can’t figure it out.

There are many people in Congress who think we are too dumb to manage our own healthcare, when the reality of it is, they have created an environment where it is so complicated, so regulated, so non-competitive, and so lacking in transparency people end up making uninformed decisions, or worse, no decisions.

If you are looking at your health insurance options, my advice to you is the same as it was to my friend.  Do the math.  You really have to look at everything, the deductibles, the co-pays, well care, premium payments, tax benefits, your own medical payment history, drug benefits and so forth.  No, it’s not simple, but it’s amazing what you will learn by doing the math.