Matt Helt | SecretPenguin Blog

For those of you who may not have been following along, I sent an open letter to Steven S. Martin, CEO of Blue Cross Blue Shield of Nebraska (BCBS). In my letter, I described the outrage I felt when I found out my health insurance premium will increase by 46% for 2010. In writing the letter, my goal was to get through to BCBS that I was angry. Sometimes you have to publicly announce your concerns in order to get a response.

Well, I certainly succeeded in getting a response. Mr. Martin himself sent me an email expressing his desire to address my concerns. So today at 2 pm we spent a total of 45 minutes discussing my situation and what caused the increase. To be absolutely fair to BCBS and Mr. Martin, I was mistaken in thinking they did this to increase their profits. I admit that I was wrong. BCBS, as Mr. Martin explained, is a non-profit health insurance provider. They reinvest their profits back into a reserve fund. But I will also say that because BCBS did not explain the reason for the increase to me initially, I was pretty much left to make up my reason. My fault for assuming something, but it’s also their fault for not clearly communicating.

So on to the explanation. Mr. Martin said the increase is due to the fact that many healthy people who were in my insurance pool have left. Those of us that remain have to pick up the slack. Unfortunately, there’s a lot of slack to pick up. 10% of the people in our pool account for 50% of the premiums being paid out. The next 10% account for an additional 20% of the premiums being paid out. So essentially 20% of the people take 70% of the money. Pretty close to the old 80/20 rule. So as a healthy person, I’m financing the health care of the sick people in my pool.

We discussed all the issues surrounding the health care debate. In most cases I agree with Mr. Martin. Health care costs are completely out of whack. Politicians are coming up with solutions that really won’t benefit us. This issue is so complex, so unbelievably intricate, that I can honestly say that I believe the entire thing is going to collapse. Unless we wipe the slate clean and start from scratch we will continue to be weighed down by this issue.

Which brings me to my last item. I told Mr. Martin that my goal wasn’t to complain and solve my own problem. Many of you expressed to me that you’re in the same boat, so I asked that BCBS be a leader in this effort and help us all solve the problem of health insurance costs. I told him that small business owners don’t feel like they have a voice. No one is lobbying for us. In response, he suggested we put together a group of small business owners that will meet with BCBS to discuss our issues. This is a very encouraging step forward. If insurers and the people they serve can begin to talk through these issues, understanding where each other is coming from, then perhaps we can develop solutions together and keep the lawmakers from doing something drastic and unnecessary.

If you are interested in being a part of this group please send me an email. We’ll be a setting up a meeting in the next couple of weeks to discuss these issues. This is our chance to have a voice. I hope you decide to be a part of it.

Mr. Martin,

I’m writing to you today to express the shock and disappointment I received when I read the notice you sent me about the premium increase you will be imposing on my family starting Jan. 1, 2010. The notice states that my premium will jump from $400 a month to $585 a month. This represents a 46% increase over my 2009 premium. My question is: How can you possibly justify this? If any other business tried to do this they would immediately get dropped. Customers would mobilize and boycott your company. But since you are an insurance company, and people’s lives are at stake, you act with impunity because no one will call you out. Well, I’m calling you out. This is the very reason people are calling for health care reform. Insurance companies like Blue Cross Blue Shield of Nebraska are looking to boost their bottom line, regardless of how it affects your customers. Your motive is profit. The health of my family is the least of your concerns.

My current policy covers very little in terms of health care expenses. We mainly keep this policy to cover any catastrophic illnesses that might put my family in financial risk. Yet even though this policy covers very little, we are spending close to 15% of our annual income on it. Now you’re asking us to increase our spend an additional 46%? For what? We hardly ever visit the doctor. When my wife or I get sick, we tough it out and try desperately to avoid an office visit. Why? Because when we visit the doctor it costs us 100% out of pocket. This is absurd. And if I do have to visit the doctor for something as mundane as strep throat, I’m left paying $120 for a visit that takes less than 5 minutes. Now, I know what the doctor charges is not your fault, but I hope it illustrates the position I’m in.

Which brings me to the reason why I have to pay you directly for my insurance. I am self-employed. I don’t have the benefit of an employer paying for my health insurance. My wife is self-employed as well. We work very hard to earn a living. Yet it seems the harder we work, the more we have to pay each year for insurance. And this year we hit our breaking point. There’s no way we can afford the increase you are imposing on us. We are forced to put our kids on state aid. Unfortunately, that’s the only option we have left. We will try to keep insurance for my wife and I, but the kids are our biggest concern and unfortunately we’re going to have to rely on the government for assistance. It’s the last thing we want to do, but you left us no choice. And maybe that’s what you had in mind. Perhaps my healthy family is too much of a liability for your profit machine and you want to force us out. Maybe you decided to raise your rates before Congress passes legislation preventing you from doing so. Whatever the case is, we are making drastic changes simply to survive financially.

You may not care what I think. But please pay a little bit of attention. Health care is ruining America. You’re part of the problem. Most of us are out here scrambling to figure out what to do. Perhaps if you hear from those of us who are struggling you might do something proactive to help this situation. My guess is that you’ll continue to figure out ways to increase your bottom line at the expense of people’s health. We want to pay our fair share, and as a business you need to make money. As a business owner I understand this, but what your company is doing is simply a travesty. I guarantee that my family is not the only one affected. I’m sure there are thousands of your customers facing the same predicament right this very minute.

So do something to fix this. Don’t sit back and say “It’s a cost of living issue and out of our hands.” That’s what you say every year. It’s funny though, the only thing that increased 46% over the last year is my health insurance premium. And in my family’s case, since all our doctor visits are paid for straight out or our pocket, you earned almost pure profit from us. We were good to your bottom line. Why don’t you return the favor and be good to my family’s bottom line?

I would love to discuss this in person if you would like. Feel free to send me an email and we’ll set up a time: matt@secretpenguin.com.

Sincerely,

Matt Helt

3:05 pm  October 7, 2009
UPDATE: I received an email from Mr. Martin this afternoon that expresses his desire to speak with me about my concerns. I appreciate the effort and look forward to discussing my letter with him. After we talk, I’ll post an update and let you know what was said.