Tuesday, February 13, 2007

Apples and oranges

If I sell you an apple today for a dollar and then sell you an orange tomorrow for two dollars, is that inflation? Not really. You can't measure inflation by comparing the costs of different things.

So if one month I pay, say, 160 pesos for health insurance and the next month I am asked to pay 200 pesos, is that inflation?

Well, see, it would be if I were actually paying for the same thing. But I'm not! Because there is an all new health insurance plan in which I've been enrolled by default. And man is it great! It includes all these super discounts on car insurance as well as unspecified "new benefits being developed in areas such as domestic and international travel, and others that will be added in the future."

You know, I hate myself for being so negative. But that last thing there just seems a little . . . vague. Whereas the 25% premium increase, not so vague.

So if the 25% increase in health insurance premiums, which would be murder on the government's inflation index, is not being used to calculate health care cost increases, what is?

When the government negotiated price increases with the insurance companies, it was decided that you could also choose a plan with a 2% premium increase and new co-payments for services.

This 2% number is what's being used to calculate the inflation rate.

This week I have to stand in line at the insurance office to opt out of the new, improved plan. Although I know I will totally kick myself later when I'm looking for unspecified future discounts.

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