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By Jack Ganssle
I'm OK, You're OK
I'm too healthy to get insurance.
Recent life changes encouraged me to get new health insurance. Blue Cross - which has insured me for decades - wanted information from my doctor.
What doctor? Other than a wrist fracture I haven't seen a doc in years. I've had no illnesses, no injuries, and no complaints. But without a health history, despite the fact I've never made a claim, Blue Cross's underwriters figure I'm too much of a risk.
$300 to a random doctor selected from the phone book secured the physical and blood work the bureaucrats required. Eventually the paperwork percolated through a labyrinth of channels and company presented a variety of options for deductibles.
Here's the data. The first column is the deductible; the second the monthly premium payment. I added the third column, the total yearly premium payments, as the company apparently doesn't want to bother us with this bit of trivia.
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The numbers tell us one thing above all: to get rich quick, start an insurance company.
Choose the $100 deductible instead of $5000 and you'll spend an extra $6744 per year on the premium. to get $4900 of insurance. Go from $500 to $400 and spend $756 per year to save $100.
I could rant about the effect this has on the poor, but even for those unfortunates the only sensible option is a high-deductible. Save the difference and use it for a medical catastrophe. In a healthy year you'll be building a nest egg; bad years you still come out ahead.
The huge deductible scares folks. "$5000! We'd be devastated by that!" Perception is reality.
Big bucks scare folks. Last week I had an interesting dialog with a developer about a similar issue. They're - sigh - building their own RTOS. From scratch. VxWorks looked pretty attractive but costs a bundle. Why not give a vendor a few tens of $K and get tested, working code?
Why, that's real money, cash on the barrelhead, the company has to write a check.
Paying one of their people for a year's work is a lot more palatable because the apparent cost is just a few thousand a week. And it's already part of the budget, a known fixed expense.
The developers all understand the folly of the decision, but management's no-capital-expenses policy dictates this madness.
Back in the 70s my boss foiled a scheme I'd hatched to save the company big development dollars. It, too, required spending some serious cash, but would ultimately trump the do-it-yourself approach we usually employed. He told me, "look, I've got to pay you anyway."
I never had the guts to tell him "Actually you don't. You could fire me anytime and save some serious dough."