First Person: Our Health Care Costs Are Out of Control

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We just had our second child, and the process helped to drive something home that we kind of already knew -- health care costs are out of control! After reviewing our baby birthing expenses, the out-of-pocket portion of which was actually lower than I thought it would be, and began totaling up other costs involved in our regular health-related expenses, I began to realize just how much of our regular income is put toward health care costs.

With two children and a type 1 diabetic wife, our medical and health costs can run pretty high. Take this year for example. Having a baby, plus premium insurance expenses, and all the rest has had the costs adding up.

Insurance

Now I'm not knocking our health insurance (because it's actually quite good), but it still comes as a substantial monthly cost. Our health insurance runs about $86 a week, our dental coverage is at about $6 a week, and our vision insurance runs about $4. This means that we pay around $96 a week or $384 a month for our family of four. This equates to just over $4,600 annually -- a tidy little chunk of change.

Having a Baby

Recently, we had our second child. We moved back to the Chicagoland area from the west coast largely in an effort to mitigate the costs of this process by way of better employer-sponsored health insurance.

In a recent article about the medical costs involved in the baby phase (doctor's visits, ultrasounds, and the birthing process), I detailed the amounts involved in the process. Health providers billed our insurance over $51,000 for the medical coverage we received. In turn, our insurance paid about $17,000 to these providers. Our share of the costs after a $1,400 health reimbursement account paid for by my wife's employer was used came to about $3,000 out-of-pocket. Had we stuck with our state-sponsored coverage out west, and incurred similar billed expense totals, our share at 30 percent (our portion of billed items with our particular insurance) of $51k would have been about $15,000 rather than $3,000 -- a huge difference!

Additional Expenses

Then, since my wife is a type 1 diabetic, we have other expenses to deal with as well. Insulin, test strips, insulin pump supplies, and similar items are billed at a rate of about $6,000 a year (this amount can fluctuate annually depending upon usage). After insurance kicks in though, we pay about $1,000 of that.

Therefore, this year as a family (all of whom are under the age of 35) we've spent about $8,600 out-of-pocket for billable charges of nearly $60,000. While I thank our lucky stars for employer-sponsored health insurance, it seems like the rates that health providers are charging for their services and medical supplies is becoming a bit excessive. Thankfully, we planned well financially for having our second baby, and don't have any more in the family planning scheduleā€¦knock on wood!

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