SAN RAMON — Ismail Mahomed, who is self-employed and buys his own health insurance, has watched with dismay as his premiums climbed nearly 35 percent in each of the past two years.
He now pays $740 a month for himself, his wife and two daughters, but that hardly gets him “Cadillac” coverage.
The family has a $3,500 deductible per person, and a $35 co-pay for each doctor’s visit.
If all four were injured in a car accident, they would pay $14,000 out of pocket before their insurance kicked in.
Blue Cross would pay 70 percent of their hospital bills, compared with 90 percent two decades ago.
“Every year, it goes up dramatically, and the coverage keeps going down,” he said. “In the back of your head, you worry, ‘What if something major happens?’””
The Mahomeds are among an estimated 14.5 million Americans — 5 percent of the population — who purchase coverage on the individual market.
Much of the national health care reform debate has focused on how to help people like them, among the hardest hit by escalating premiums.
The number of people seeking to buy their own insurance is growing as unemployment spreads and more employers drop coverage because of increasing costs.
People in this situation have very limited options, according to a study released this year by the Commonwealth Fund.
Nearly three out of five adults who shopped for coverage on the individual market between 2004
and 2007 said they found it very difficult or impossible to find an affordable plan.
As a result, 73 percent of those seeking coverage did not buy a plan, most often because the premiums were too high, the study found.
Those who did take the plunge into individual insurance were more likely to devote a large share of their earnings to health care.
Half of the adults in individual plans spent 10 percent or more of their income on premiums and out-of-pocket costs, the study found, compared with 29 percent of those with employer-based coverage.
Mahomed worries about whether he can afford to keep his insurance if costs continue to escalate.
The family lives in a beautifully decorated, two-story home in the San Ramon hills.
Mahomed, 47, has been self-employed since 1989 as a consultant in project management and recruiting. He has had Blue Cross insurance the entire time.
Two years ago, coverage for his family cost $530 a month, with a $1,500 deductible per person.
The next year, it jumped to $740 a month, with a $2,500 deductible per person.
This year, the same coverage would have cost him $980 a month.
That was too costly, so he reluctantly switched to a $3,500-deductible-per-person plan, which brought the monthly payment back to $740.
The high deductibles and expense of things that his insurance does not cover have caused the family to ration their own health care.
Mahomed said his wife, Tasneem Khan, “gets very anxious every time somebody gets sick.”
When she starts feeling ill, she will often call her brother, who is a doctor, for advice rather than see her own health care provider.
“It’s got to be really serious before I go to the doctor,” she said. “That’s something we deal with all the time.
“We’re just fortunate that we have doctors in the family,” she said. “What does everybody else do?”
They have had what Mahomed calls amazing bills for care not covered by their policy.
A chest X-ray for his wife cost them $2,200 last year because they had not yet met their deductible.
They paid $250 for Khan’s inhaler. She tried it once, but it did not work well for her, so they bought a $180 inhaler. On a trip to Turkey last year, they bought the same inhaler for 15 percent of the price they paid here.
“It’s absolutely ridiculous,” Mahomed said.
A health care reform bill that cleared the U.S. House of Representatives on Nov. 7 would attempt to address some of these issues by requiring most employers to provide insurance for their workers, or pay a penalty. Smaller companies would be exempted.
The bill also would:
Impose a mandate that most people obtain insurance, which could funnel millions of people into the individual market.
Set up a health insurance “exchange” in which individuals could more easily compare what is available, Democratic leaders say.
Create a public option or government-run plan designed to help contain costs by competing with private insurance companies.
Offer subsidies to help low- and moderate-income people buy individual plans.
Many Republicans vigorously oppose the government-run plan. They argue that there is no evidence that it would be run cost-effectively. If it gets too much financial help from the federal government, they say, the public plan could unfairly compete and drive private insurers out of business, leaving fewer options.
Republicans also doubt that the health insurance exchange would lower premiums. They favor a more market-oriented approach, including allowing Americans to shop for coverage across state lines.
Mahomed said he supports a government-run public option and other Democratic proposals “to keep the insurance companies honest.”
He notes that a couple across the street pay $1,500 a month for their insurance, and his mother-in-law pays more than $1,000 a month just for herself.
“A country such as ours needs to do a lot of soul-searching in terms of providing equal benefits to people,” he said. “I don’t mind paying extra taxes, because I’m paying $10,000 a year in premiums and out-of-pocket expenses.
“If it goes up 30 percent every year,” he said, “there’s very few people who will be able to afford that.”
Reach Sandy Kleffman at 925-943-8249.
Insurance is a highly misunderstood product and it’s often bought and sold for the wrong reasons. 
