This LA Times story about the call to overhaul 401 (k) plans piqued my interest this weekend. It was nearly 30 years ago that businesses began the migration from defined benefit pensions to defined contribution 401 (k) plans, with the idea that workers should manage their retirement. Now, as a generation prepares to retire, relying largely on 401 (k)s, we’re learning a couple things — 1) that this recent monkey business with the stock market is really a disaster for those close to retirement and that’s totally unfair, and 2) that people are consumed with life and can’t be stock porfolio managers and properly manage their accounts. Here’s a telling statement:
.. even Nobel Prize-winning economists have admitted that they don’t closely monitor their 401(k) statements — allowing an initially well-balanced portfolio to become dangerously overexposed to stocks as those investments grow faster than bonds.
So, the reason I call attention to this: the trend in health insurance has long been heading in the direction of 401 (k)s. Marketers alluringly suggest that people need to “take control” of their health care management and they know “what’s best” for themselves. And voila, we have “consumer-directed health care.”
It all sounds very frontier-ish and exciting and no-nonsensey and take-the-bull-by-the-hornsy. That is, until you have to start calling the insurance company to see if your mammogram is covered, or prenatal care, or orthotics — then you realize just how very, very small and very, very insignificant — and very, very alone you are navigating phone trees and call centers in India. And all you really want to know is if you should really worry about that lump in your breast.
Anyway, now, there is serious clamoring for a re-look at the 401 (k). The cows are already out of the barn on that one. We know what happened. We’re starting to see the consequences of underinsurance now… So let’s not let the same thing happen to health care.