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Health
Insurance Plain & Simple To put it plainly, health insurance rates have gone through the roof — and speaking of which, it costs just about as much to have health insurance as to keep a roof over your head. Employers I talk to are saying the same thing: It is getting too expensive to provide health insurance for employees. When is it going to end? Unless some fundamental changes are made, most experts don’t see an end in sight. Higher and higher prices are contributing to increasing numbers of uninsured individuals. Families are unable to fi t the cost of health insurance into their budgets. Even with employers paying part, the remaining bill is often out of reach. Employers I talk to are saying the same thing: It is getting too expensive to provide health insurance for employees. When is it going to end? Unless some fundamental changes are made, most experts don’t see an end in sight Here’s the problem: There is no direct relationship between cost and care. Those receiving the care may never see a bill for the services, and if they do, it is of little consequence because a third-party payer is responsible for its payment. This is like giving a teenager a credit card and never showing him or her the bill — it removes any accountability to contain cost. Where else does one fi nd such insulation between the services provided and cost billed? Can you think of any other product, service, or commodity that has anywhere near the insulation we see in the health care industry? One solution might be to put restrictions on the use of $20 copays. You would want to protect the use of low copays with regard to new baby and early childhood needs, while eliminating its use for other situations. Higher deductibles with incentives to save money for health care emergencies would be a start toward reining in cost. A system that encourages HSA (health savings accounts) has exceptional merit. The government has made the money contributed to an HSA tax-deductible and tax-free when used to pay for health care and related expenditures. Money inside an HSA grows tax-deferred and accumulates year after year, providing a safety net for health care needs. It is interesting to note that 80 percent of health care expenditures can be attributed to 20 percent of the health care–consuming public. According to the U.S. Census Bureau’s 2003 Report on Income Parity and Health Insurance Coverage, “... 70 percent of covered employees had health care costs of less than $1,000 a year.” (It is widely known that a significant number of those needing heath care services can attribute those needs to lifestyle choices such as smoking, overeating, and alcohol and drug abuse.) Think of the premiums that were paid by those individuals who needed less than $1,000 worth of services! If each of those individuals had an HSA, think of the money they would have growing in accounts for their future and retirement needs! Not only is their money growing, but a health-conscious lifestyle is encouraged. Something to think about: Health insurance should not be designed to cover the cost of an annual physical and other routine services. Major medical should be designed to cover catastrophic unexpected events, not low cost items that should be budgeted. For information on how to plan for a secure retirement,
call Ms. Hart at (205) 345-7668 and ask for “A Guide to Your
Money and Your Financial Future.” Please Article by Babs W. Hart originally appeared in The Hart Group, Inc. |