Trends in Group Coverage

Many people I speak with still hold employer-provided Group plans as the best kind of health insurance. Trends in group coverage actually suggest otherwise. This point of view is expressed in an article on the Harvard Business Review recently:

As a result of these trends, employers have shifted costs to employees; one common example is the implementation of high-deductible insurance plans, which increase consumers’ out-of-pocket costs. High costs can hurt employees in other ways, too: there’s evidence that as employer-provided health costs rise, employers are constrained in their ability to increase wages.

Consumers will see with their employer-provided insurance plans, all things being equal, that deductibles will rise, and they will have to pay more out-of-pocket for healthcare. I’m not about to suggest you turn down your employee health insurance plan though. Your employer is paying for most of it. But it will cover less in the future.

What to do then, if you’re in this situation? I’d suggest you get a hospital and doctor plan to go with your employer coverage. That could help pay all or part for doctor and outpatient healthcare expenses, before your deductible is met. That would be the best way to manage your healthcare costs.

Talk to me today and I’ll explain how we could help.

Dan Rhoads

ACA premiums rising beyond reach of older, middle-class consumers

Sixty-year-olds with a $50,000 income must pay at least one-fifth of what they earn for the least expensive premiums for health plans in Affordable Care Act marketplaces across a broad swath of the Midwest, the analysis shows. In much of the country, those premiums require at least one-sixth of such people’s income.

And that’s just the beginning. I’ve seen plans as high as $4400/month! Obamacare is too expensive.

So what do you do? Well, let me give you my perspective.

Yes, there should be options that cover pre-existing conditions, and I’m concerned for uninsured people out there who will be caught in the trap should the ACA become unsustainable.

But, THERE ARE ALTERNATIVES. Talk to me. Get health insurance BEFORE your health takes a turn for the worst.

I have plans and options that are affordable and can stay with you until you turn 65 and get Medicare.

 

The Problem with a Deductible

Except for employer plans, high deductible health insurance feels like a scam to many healthy Americans. They see only 2 options:

  1. Their plan costs a few hundred dollars a month, and has a deductible that’s so high that it won’t pay for their healthcare until they’re bankrupt, or
  2. Their plan costs close to a thousand dollars a month (or more), and has a deductible that is low.

Either way, you probably feel about the same. That you’re paying double, once to the doctors and once to the insurance company, when you should only be paying once. It’s a painful cycle that angers many Americans. And in a way, it is a scam that the insurance industry has pulled on consumers – a way that they can get out of paying and turn your insurance premiums into pure profit. This has led many consumers to want to self-insure – to settle for paying for medical bills entirely out-of-pocket.

Let’s just get this out there: Self-insuring, or just avoiding medical care, is NOT a solution. If you get seriously ill or injured while under-insured, then you’ll be willing to pay just about any amount for healthcare, and the insurance companies will want nothing to do with you.

 

“How High a Deductible is OK for me?”

As a rule of thumb, you should look at your average bank balance. Most people know about how much cash they like to keep on hand for emergencies. Have a look at yours. And then, don’t ever choose a deductible that’s higher than the money that they would have available if they’d have a sudden serious illness or injury. Because, what’s the point in doing that? Simply trying to pay the deductible would put you in financial debt.

If all the only health insurance that you can afford comes with a deductible that’s too high, then you need to explore other options.

 

There are ways to get around your Deductible

For those who want to get real value out of their health insurance and get around their deductible, there are other options. They’ve heard of Health Savings Accounts (HSA’s), and similar employer contribution plans. Those who have such plans love them.

There are also fixed indemnity Hospital and Doctor plans. There are good and bad indemnity plans out there, so look out. But good ones will greatly reduce your out-of-pocket spending for doctors visits, lab tests, imaging, and hospitalization.

Indemnity plans don’t coordinate with your high deductible plans – which means you can have both types of plans if you want, and neither limits the benefits of the other.

You don’t have to combine an indemnity plan with a high deductible plan however. Not if it’s a good plan. Look for how much the plan would pay for hospitalization or surgery.

And, in place of a high deductible health insurance plan, consider a critical illness plan that will pay a large lump-sum if you have a heart attack, stroke, cancer, or something similar. There are many such plans available for critical illness, and those vary widely by state. Ask your insurance agent for advice.

 

How to Tell a Good Indmenity Plan from a Bad

  1. Have a look at the per-day hospital confinement benefit. $3,000 to $4,000 is good. $200-$1,000 is bad. And look to see how many days per year this benefit may be paid.
  2. Make sure that benefits are provided for wellness, out-patient diagnostics, advanced imaging, and ambulance.
  3. Stay away from plans that have an enrollment fee above $35.

 

Have questions? Call us at the RhoadsLife Insurance Agency today – (484) 509-1784.

Anyone who’s had a high deductible healthcare plan knows – they don’t work.

High deductible healthcare plans were designed to reduce the overall cost of coverage while maintaining high maximum benefits. In essence then, they only offer coverage if your health really takes a dive. For that type of coverage, you might as well have critical illness insurance.

Health wonk Joe Paduda even says:

Instead, patients avoid care they should get, go bankrupt trying to pay sky-high deductibles, and even worse, don’t do a damn thing to get high utilizers to modify their lifestyle or care decisions.

Lazy benefits managers and employers looking for a quick fix to rising premiums continue to tout HDHPs despite the warning signs. Now, over a decade after these plans first became widely popular, some employers are finally getting the message.

I’d go so far as to argue that HDHPs help drive health care costs up; sick folks get sicker because they can’t afford preventive and routine care, while the 20% of members who incur 80% of the healthcare costs blow thru their deductible in March and then have no financial inhibitions.

It just doesn’t make sense that way. Save money by getting a solid fixed indemnity plan, and life insurance with living benefits (critical / chronic illness benefits). Your wallet will thank you.