'Your iPhone or your life!'
Well we're getting rid of the individual mandate. We're getting rid of those things that people said they don't want. And you know what? Americans have choices. And they've got to make a choice. And so, maybe rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on that, maybe they should invest it in their own health care. They've got to make those decisions for themselves.”
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But framing the consumer “choice” as one between an iPhone and health coverage ignores the massive gap between the price of an iPhone and what Americans spend on health care.
Let's start with the most generous comparison, and posit that someone wants to buy the most expensive iPhone — a brand new 7 without a contract and with the luxurious “Plus” version's 5.5" screen — which has a sticker price of $769. With tax, that comes to around $800.
Conversely, a year of individual insurance coverage on the open market will run you about $393 per month, or $4,617 per year, per eHealth. For the purpose of this comparison we'll assume you're a healthy individual who doesn't have to worry about deductibles (which run over $4,000 for these plans), and that that $4,617 is all you have to pay.
Even in this expensive-iPhone no-deductible scenario, the typical annual cost of an individual market plan costs is about six times as costly as Chaffetz's “new iPhone.”
But the expensive-iPhone zero-deductible scenario isn't wholly realistic. Only 2 percent of us buy a new smartphone every year, per Gallup. Another 44 percent get a new phone every two years when their cellular contracts run out, and 54 percent of us are cheapos who only get a new phone when our old one breaks or becomes obsolete. So for a better point of comparison, let's call it one iPhone to two years of insurance.
That means that across the typical life span of an iPhone, we're spending 12 times as much on health insurance as we are on the phone.
But this, too, is an overly rosy scenario for many of us. Those individual market plans don't just involve monthly premium payments, they also have high deductibles, too — $4,328 in a year, per eHealth. That represents out-of-pocket spending you need to cover before your plan even starts kicking in.
So let's say we get sick. We break a leg. We have to get lab work done. Our health isn't great, so we need a lot of medical care and max out on our deductible each year. Under the standard individual plan referenced above, that works out to about $18,000 in premiums and out-of-pocket expenses over two years. Or, for that span, the price of 23 iPhones.