An Answer To Sky High Health Insurance Premiums
Actuaries at the Centers for Medicare and Medicaid Services calculate that national health expenditures grew from about 7.0 percent of GDP in 1970 to 15.3 percent in 2003. And, they forecast that medical expenditures will reach 20 percent of GDP by 2015. It's no longer possible for business, our government, or individuals to ignore these rising costs.
Clearly, something must be done. We baby boomers can remember a time when we never gave health insurance a thought. It just automatically came with employment as a free perk. It's not that employers were all that much more generous way back then. Just like today, business was driven by profit. But, businesses needed workers, and workers were a scarce commodity at the end of World War II. Health insurance was a cheap benefit. Once one employer started throwing it in they all had to just to stay competitive.
Since that time the cost of health care has skyrocketed. There are two chief reasons for this. First, medical science has advanced greatly over the past 50 years. At the end of World War II there was no open heart surgery. And, only a few decades earlier even diabetes was a death sentence. Countless lives have been saved and the quality of life, for virtually everyone, has been greatly elevated by the enormous advances made in medical science over the past five decades. But, these wonderful advances have come at a cost.
The second reason that health expenditures are nearing 20 percent of the GDP is simply a lack of diligence. Because we have come to view medical expense as ?free? we've failed to manage the cost of these services adequately. Collectively, we've been careless consumers. Our benefits packages and appetites have all contributed to our failure to keep an eye on medical costs. The government has complicated the matter by stepping in with legislation that, in effect, guarantees healthcare for all. And, first class healthcare with the latest technology at that!
So where does this all end? Do we just keep spending until medical expenses consume 25% or even 30% of GDP? That may suit the medical industry. But, it spells financial disaster for the nation. Congress took a major step in the right direction in 2004 when it passed legislation which created a special class of tax deferred savings account - the Health Savings Account or HSA. The goal of this legislation is to put consumers back in control of medical expenses while providing insurance products that would cover high unexpected bills. Health Savings Accounts can only be set up in conjunction with the purchase of a qualified High Deductible Health Plan (HDHP). The HSA HDHP combination is a good way to go for individual and family plan purchasers, especially if you're overall health is relatively good.
The idea is to purchase a less expensive health insurance plan and then deposit the premium difference in a savings account. The higher deductible insurance plan creates financial incentive to control cost while providing financial relief should a major illness or injury occur. By depositing the premium difference in a Health Savings Account the consumer builds equity which can be used for healthcare costs which aren't covered under the medical insurance plan.
The beauty of the HSA is that contributions are tax deferred when you put money in, and tax exempt if you use the money for qualified purposes. I repeat: When you use the money you save for qualified medical purposes you never have to pay taxes on the money or on any earnings the money may have accumulated - this is huge! A number of banks have web sites to explain the intricacies of setting up a Health Savings Account. And, your insurance agent can help you select a qualified High Deductible Health Plan.
Vern Bell, MBA, CBC is an independent consultant and creator of http://www.selfserveinsurance.net.
Related Articles:
Family Health Insurance - To Buy Or Not To Buy
There are many pressures on the purse of the modern family yet family health insurance it is of paramount importance. In the current health care environment family protection, in the form of family health insurance cannot be mitigated.
Cheap Auto Insurance - 10 Crucial Tips For Traveling Teens And Petrified Parents
Cheap auto insurance can cost you a bundle if you don't keep a few crucial tips in mind. You have to do your homework to ensure that you understand the fine print - especially if you have a teenager on the verge of discovering the joys and freedom of driving. You don't want to discover too late that your cheap auto insurance policy doesn't provide coverage for a young driver...
Cheap Health Insurance Online in Alabama
Health insurance is a major expense for most people and it seems that today everyone is scrambling to find cheap health insurance here in Alabama It should be no secret by now that the best - really the ONLY - place to find cheap health insurance in Alabama is online
How To Get Cheap Health Insurance Online In West Virginia
Consider what could happen if you suddenly came down with a severe illness or suffered a catastrophic accident. Within a matter of days you could incur hospital and doctors' bills in the tens of thousands, even hundreds of thousands of dollars. Without insurance your home could be taken from you, your bank account could be drained, and any other assets you own could be wiped away - all in the blink of an eye.
Your Health Insurance Information Questions Answered
Getting Lower Premiums With Discount Auto Insurance
Unless your standard mode of transportation is dogsled or a horse, you need to face the fact that the need for auto insurance is always going to be a part of your household budget. When you get a new car or a used car, one of the things you will need to figure in when you are determining how much car you can afford is the cost of insurance for that car. Not surprisingly, the auto insurance rates for cars of the same year and same price range can be radically different due to safety factors inherent in the type of car, which of course affects the insurance rate you will pay.
How To Spot Low Cost Health Insurance
A lot of companies claim to offer low cost health insurance, but few deliver. Although finding the best and walking away from the rest will require some homework and research, it can be done.
Americas Watchdog Wants To Know If Consumers, HMO's Or Health Insurance Company's Are Tired Of Being Soaked with drugs like Vioxx or Trasylol By Big
Americas Watchdog has just launched a national investigation into seeing if consumers, HMO's, health insurance companies, or health cooperatives were over charged with the drug called Vioxx, Trasylol or any other drugs, when much cheaper alternatives were available. According to the group, "we are out to protect consumers, HMO's, health insurance companies & health care cooperatives from being gouged by big pharmaceutical companies. We think Vioxx & Trasylol will turn out to be a perfect examples". HMO executives, health care insurance executives or individuals with specific information should feel welcome to call Americas Watchdog anytime at 866-714-6466
Auto Insurance- Shopping For Auto Insurance Guide
With auto insurance premiums rising across the country, comparing premiums for similar auto insurance coverage has become the ultimate test of your shopping savvy. Have you checked with every insurer to be sure you?ll be paying the lowest premium for the most coverage? Did you check on all the discounts for which you might be eligible, such as good-grades discounts for your high school student, driver?s education and defensive driving course discounts, anti-theft device price breaks, and multi-car rates? Putting it all together to know you?re getting the best price is challenging, but the money you?ll save on your premiums makes the extra effort well worth it in the long run. Follow these three steps to be sure you?re making the right choic...
How To Select Affordable Health Insurance In Phoenix
The most important step to take before you select affordable health insurance in Phoenix ? aside from narrowing your options to those health care plans you can afford ? is to research the insurance companies and policies. During your research there are three groups of people you should ?interview,? and for different yet equally important reasons. Those groups are your friends and family members, the insurer, and the providers.