Oct. 4, 2005 - The number of Americans without health insurance rose by 800,000 last year, reaching a record high of 45.8 million, according to the U.S. Census Bureau. Of those without coverage, more than 21 million were full-time employees. One reason? With rising healthcare costs, an increasing number of companies are asking their employees to bear more of the burden for insurance premiums.

 page 1 of 2
NEWSWEEK: You write that you learned about individual insurance in 1999 when your wife was pregnant and you lost your employer-sponsored insurance. What happened?
Paul Zane Pilzer: Technically, I was on a healthcare plan that I shouldn’t have been on. I was a board member of a company and I got it through them. I read it carefully to make sure I was absolutely truthful … These are normal things for entrepreneurs to deal with. But when [the company realized it] I was dropped. It’s funny to think that here I was, a successful guy, and I was sneaking around to get health insurance.

So what did you do?
I panicked. And I started calculating how much it could cost if we had a pre-term baby. We didn’t have one, but that’s the way I think. I could afford it but it would have been a lot of money. I didn’t realize then that Utah [where we live] is a really good state for health insurance … But I did some research and not only did I get health insurance, I got real health insurance. Corporate health insurance is not insurance, really, but a pass-through mechanism. If you quit your job or get fired, you lose that insurance. They should really be called health benefits because there is no insurance if you lose your job. In contrast, there’s the individual market, which is new because states have now liberalized the laws. The rate [on your premium] can never be increased for health reasons now, only by inflation, nor can a policy be cancelled. It is guaranteed renewable.

I’m assuming that’s what you have now.
Yes, I purchased a $20 co-pay policy—no matter what happens. I pay $5 for generic drugs and 75 percent off of brand name medications. I’m nearly 52 with four kids aged 5, 3, 2 and 1. I have a typically expensive healthcare family. And I pay $433 a month for a family of six.

 

That seems very low.
I actually shouldn’t even have this one. I should have a high deductible policy [which would have an even lower monthly premium]. But my wife said she didn’t want to think about how much to pay [for each doctor’s visit]. The $433-a-month policy is actually about average. Utah is good for insurance … but California is the best.

Why?
Because it’s effectively free market health insurance. There are 22 carriers competing for your business. So if you have a smoking problem or anything, you can always find someone to take you.

But at what cost?
Premiums have already come out now for 2006, so we know that in 2006 the average corporate health insurance plan for a family of four is $14,000 a year, and it’s $4,500 a year for an individual. That is the cost the company pays, of which an employee may share part of. So let’s assume you work in California and your employer pays $14,000 for you. If you went to the same insurance carrier yourself and asked if you could get a policy that had identical benefits [to the employer-sponsored plan], they would charge you $7,000 [which your employer could reimburse you for].

Why?
Because you are in the 90 percent of the population that is healthy. The average [healthcare] expenditures for an American are $6,600 a year. Ninety percent of the people spend less than $1,000, but 10 percent use more than $40,000 a year. In the old days, we didn’t know who was healthy or not. The thinking was that anyone could get cancer or other diseases, so let’s bond together and insure each other. But crank the
                                              next