Health costs are increasing at more than double that of general inflation. One single major medical expense could destroy a person financially; health insurance is a necessity to prevent financial catastrophe, as we are all only one step away from a major medical event. Simply braking a leg translates into thousands of dollars in medical expenses.
Rising medical expenses translate into rising costs for health insurance, both at the group level and the individual level. While most employers offer health insurance to their employees, the rising premium costs mean those higher premium costs are being passed along to employees, as the employee share of insurance has increased significantly over the last decade.
As Benjamin Franklin once said, ?An ounce of prevention is worth a pound of cure.? Research has proven that proper diet and exercise can keep you out of the doctor?s office. Both will not only keep you in good physical shape but will also allow you to be more productive, which could mean a larger bonus or that raise you?ve been wanting.
Many employers offer wellness programs; there are sometimes monetary incentives for participating, such as a free gym membership. If anything, the right foods can make you think better, and proper exercise can relieve stress. Both will keep you healthy and away from the doctor, thereby lowering your out-of-pocket medical expenses.
Bringing Consumerism to Health Care
One way of keeping medical expenses down is to shop for health care not unlike the way we shop for consumables, such as plasma TV?s or shoes. That includes shopping for health insurance. If you are healthy, whether it be the result of participating in a wellness program or not, you might want to consider a high-deductible insurance plan. A high deductible plan will mean lower premiums; however, it will obviously take you longer to reach the total premium, at which time the insurance company begins to pay your health care expenses.
If you normally stay out of the doctor?s office, then a high deductible plan may be just the thing for you. That way you pay more when you go to the doctor but pay a whole lot less every month for your premium. You have to consider what might be best according to your situation.
In order for a health insurance plan to qualify as a high deductible plan, the deductible must be at least $1,200 for individual coverage and $2,400 for family coverage. Under the Affordable Care Act, a high-deductible plan must offer free preventive care before you meet the deductible.
It?s important to maintain a liquid account for the amount of the deductible in case you get sick. You don?t want to go into debt in order to cover your deductible.
Opening Health Savings Accounts (HSA?s)
If you?re enrolled in a high-deductible health plan, as noted above, you?re eligible to participate in an HSA. As a matter of fact, you cannot contribute to an HSA unless you?re covered by a high-deductible plan. Like Flexible Savings Accounts (FSA?s), an HSA allows you to contribute pre-tax dollars; as long as the money is spent for health care (other than premiums) the money will be tax-free.
Unlike FSA?s, you won?t lose it if you don?t spend it. Also unlike FSA?s, the money is portable, even if your employer contributes into your account. You can even use the money (as long as it?s for a medical expense) in retirement if you wish.
Health insurance is not what it used to be. Gone are the days where your employer pays the entire premium, you go to the doctor at the slightest onset of feeling bad, and pay a $25 co-pay. We now need to think of paying for health care in the same way we think about paying for anything else we consume.
Where Health Insurance is Going,