Interesting Health Insurance Strategy

Interesting Health Insurance Strategy

My wife has started working full-time at a private high school, and for the first time in many years, she has health insurance of her own, instead of through my employer. (There are disadvantages to working for universities--and how they treat adjuncts is one of those reminders that the most liberal parts of the society are among the least socially conscious.) What's very interesting is how the school has set up the health insurance--an interesting model that many smaller employers who can't afford to offer insurance to their employees might consider.

The insurer is Blue Cross of Idaho, and there is a very high deductible: $1250 per year. The school reimburses 90% of the expenses paid to meet that deductible. This means that the school has much lower premiums than a conventional major medical insurance plan, and is effectively self-insuring for the majority of medical care that its employees will use. A major medical problem will rapidly run through the $1250 annual deductible, of course, and that's really for what you should have health insurance: the big disasters.

I'm mentioned before that the way that most health insurance plans work makes very little sense for exactly this reason. Insurance should cover stuff that is very expensive but that you don't expect to happen consistently. This is why the various vision insurance plans make so little sense. Someone with glasses knows that every year or two, they are going to need an eye exam, and probably new glasses. Look carefully at what most of these vision plans cost, and what they cover, and it isn't clear to me that they make much sense.