Give Health Savings Accounts A Chance
Health Savings Accounts (HSAs) may provide the American public the necessary incentives to be more efficient consumers of health care.
As consumers make health care decisions based on the combination of cost and outcomes, competitive market forces should drive health care costs to more affordable levels.
Senator Bill Frist, also a medical doctor, comments on HSAs at
Newstarget.com .
Associated Health Plans Are Not a Good Idea
Associated Health Plans (AHPs) are being considered at the federal level to allow small businesses to ban together in an attempt to offer affordable health plans. Kristen Gerencher has written a very good article on AHPs at
Investors.comThe intent of AHPs is admirable. Don’t we all want more affordable health care plans for small businesses and all businesses for that matter?
One concern about these plans is whether or not they will work. The purchasing power of large businesses does not necessary exist when it comes to health care. If it did, why would health care costs make up such a significant portion of every General Motors and Ford automobile?
Businesses of every size struggle with the cost of health care. It is no secret that health care costs drive health plan costs.
A second concern with AHPs is that they have very few consumer protections. If one of these plans has financial difficulty, consumers will be left out in the cold to pay for health care expenses delivered but not able to be paid for by their AHP.
Unlike AHPs, actual health insurance plans are regulated and protected by state insurance pools.
Be Aware of Fraudulent Health Insurance Coverage
Fraudulent health, medical, medicare supplement, long term care, and other insurance coverage are being sold to consumers. The
Pittsburgh Post-Gazette.com recently published an article detailing this problem in Pennsylvania.
The cost of all types of insurance continues to rise. As a result, unsavory characters are offering “too good to be true deals” on insurance coverage.
If you have any questions or concerns about the organization you are considering, start by checking with the department of insurance in your state.
Do your research prior to handing them your hard earned money. If not, it may be too late.
Health and Disability Insurance Is Critical To Avoiding Bankruptcy
A recent study published in the journal
Health Affairs estimated that medical bankruptcies affect about 2 million Americans every year. The outcome of this study reiterates the need for Americans to make sure that they have comprehensive health insurance coverage either through their employer or by purchasing an individual or family health insurance plan.
Significant medical claims can put unprepared individuals and families in a very difficult situation. First, the medical care that they are receiving is very expensive. Second, while they are receiving this care, they many times are not able to continue to work and earn a paycheck. The combination of high medical expenses and reduced or no income can result in a extremely difficult situation for individuals and families.
In addition to comprehensive health insurance, individuals need to look into finding a disability policy that will protect a portion of their income if they become sick and are unable to work.
More Regulations Will Increase The Cost of Health Insurance
In a February 8th article by Karen Pallarito titled "
States Urged to Ensure Health Insurance for All" at Forbes.com, a Harvard School of Public Health report suggests that more regulations will improve the cost and availability of individual and family health insurance.
Nancy C. Turnbill, co-author of the report is quoted in the article as saying "We think regulation can help make the market fairer, and we think that regulation can make coverage more available to people who don't have coverage at the moment."
I would suggest that the cost of health insurance is directly related to the cost of health care. More regulations will simply drive up the cost of health insurance for individual and family health insurance plans. When health care becomes affordable, the free market will almost immediately deliver affordable health insurance.
Fast Food And The Health Care Impact On Our Kids
By Amy Kiley Ertel, MD
Our lives are very busy these days, and sitting down for a nice dinner is almost impossible. As a mother of four children, trying to find time to sit and eat dinner as a family is difficult, and usually only occurs a couple of days a week. The remaining days are left to quick meals, and yes, fast-food restaurants.
A recent study funded by the National Heart, Lung, and Blood Institute (NHLBI) and published in the January 1 issue of
The Lancet*, has noted that young adults who frequent fast-food restaurants gain more weight and have an increased incidence of insulin resistance in early middle age. Specifically, after the age of 15, the study found that eating at fast-food restaurants more than twice a week gave rise to young adults gaining an extra 10 pounds and a 2-fold increase in insulin resistance.
With the obesity problem in America today and the rise in Type II Diabetes, exposing our children to a life of fast-food instills habits that perpetuate the obesity and increased diabetes trend. So, for the health of our children and nation, packing a dinner from home and eating it in the car may be the best alternative for those busy schedules.
* "Fast-food Habits, Weight Gain, and Insulin Resistance (The CARDIA Study): 15-year Prospective Analysis". Mark Pereira, Alex I. Kartachov, Cara B. Ebbeling, Linda Van Horn, Martha L. Slattery, David R. Jacobs, Jr., David S. Ludwig. The Lancet, January 1, 2005.
Health Insurance 101 For Individuals And Families
The changing healthcare and health insurance landscape in the United States has resulted in more individuals and families purchasing health insurance coverage on their own. Rather than touch on the number of reasons why this is the case, I would like to provide individuals and families finding themselves in this position with ten basic ideas to assist them with getting the best health insurance policy for their specific situation.
Below is a combination of ten questions and suggestions that will provide the tools necessary to get a medical insurance policy that will best work for you and your family.
1) What are your typical health and medical care expenses in a calendar year? Most people are surprised when they go through this exercise to learn that they would be financially better off in most years to purchase a high deductible health insurance plan and use the premium savings to directly offset heath care expenses throughout the year.
2) How long do you anticipate needing the health insurance coverage? For example, many companies sell temporary policies that can be put in force for 1-6 months and they are relatively inexpensive. If you are in between jobs or in a waiting period for employer coverage, this may be your best option.
3) What is your budget? If your budget is tight, having a $1000, $2500 or even $5000 deductible is better than having no coverage at all. The ability of doctors and hospitals to save and prolong life in the United States is in many cases extraordinary. However, their treatment is not free and going without health insurance coverage can in some cases result in you and/or your family losing an entire life’s worth of savings and assets.
4) Be careful to choose a plan that covers the “big stuff”. It is nice to have a policy that covers items such as: physician office visits, routine physicals, outpatient testing, and blood work. However, it is essential to have coverage for major services such as cancer treatment, transplants, critical illness, traumatic accidents, and infectious diseases. Find out the lifetime maximum amount as well as if the policy contains “internal” dollar limits.
5) Always carefully read and understand the pre-existing condition clause and policy exclusions so that you will not be surprised down the road if a claim is denied. This is important whether you are purchasing a standard medical, temporary, or student health insurance policy.
6) Does the insurance company you are considering have a substantial network of preferred doctors and hospitals in your area? In addition to family doctors, what type of access will you have to specialists and the best hospitals in the event you or a family member is diagnosed with an illness that requires specialized care? Also, what are your options for preferred health care providers when traveling?
7) If you need to go “out of network”, will you still have coverage? Most insurance policies will have coverage in the event you need to go outside of their network for care. However, review how these out of network claims will be paid. Will there be an additional deductible? How are reimbursement levels determined for out of network claims? What is your maximum out of pocket for out of network claims?
8) Are you looking for an opportunity to reduce your taxable income? If so, make sure your plan qualifies as a high deductible health plan and look into all of the aspects of a Health Savings Account. In the right situation, HSAs can be an excellent way to pay for eligible health care expenses, reduce your taxable income and save for retirement.
9) What are the financial ratings of the insurance company you are considering? A.M. Best, Standard & Poor’s, and Moody’s are organizations that rate the financial stability of insurance companies.
10) What type of customer service will you get from your insurance agent? Do they specialize in health insurance? Do they have a staff that is willing and able to assist you in the event you have a claim, billing, or other customer service problem?
If you do not have the time or patience to look into all of the items mentioned above, develop a relationship with an independent insurance agent that specializes in evaluating and servicing health insurance policies. A good
independent insurance agent will be able to save you time, money, and be an excellent resource for evaluating all of the items mentioned above.
Suggested Medical Care For Adolescent Girls
By Amy Kiley Ertel, MD
A common question of mothers with adolescent girls is "When should I have my daughter go to the gynecologist for her first pap test?" Recommendations for this initial medical visit have changed in recent years due to the increasing knowledge of why cervical cancers occur.
A Pap test is a specific test of the cervix that screens for cervical cancer. Cervical cancer has been strongly linked to a virus called the Human Papillomavirus (HPV). This virus is transmitted sexually, so an adolescent who has not been sexually active is at an extremely low risk for cervical cancer.
The old recommendation from the American College of Obstetricians and Gynecologists (ACOG) stated that an initial Pap test needed to be performed on all adolescent girls after their first intercourse or by age 18, whichever occurred first. The new recommendations from ACOG specify that a baseline Pap test be performed approximately 3 years after intercourse or by age 21, whichever occurs first.
This may appear to be a delay in an adolescent's first visit to the gynecologist, however, ACOG also strongly recommends adolescents have their first visit between the ages of 13 and 15 for health guidance, screening, and preventative health. This first visit does not necessarily require a pelvic exam or Pap test, but would mainly be exposing the girls to the gynecologist before sexual activity occurs.
Hopefully, the gynecologist can give the adolescent the information and health care guidance needed to delay first intercourse.
Health Savings Accounts and Health Reimbursement Arrangements
Businesses constantly strive to find a balance between providing quality group health insurance coverage and the costs associated with this coverage. Consumer directed health plans may provide your organization an opportunity to achieve this balance.
Most of you have heard about “consumer directed health plans”. The Bush administration has been a strong supporter of this concept as a way to get a handle on soaring health care costs. All indications are that consumer directed health plans will make up an increasingly larger percentage of group medical plans over the next several years.
The consumer directed health care concept is based on the fact that ultimately employers and employees together have a vested interest in achieving levels of benefits and costs that are both affordable and sustainable.
A major goal of any consumer directed health plan should be to get the consumer more involved in both the cost and outcomes of certain health care procedures. Informed health care consumers make better medical related decisions and in many cases these decisions will result in both improved quality and lower costs.
Consumer directed plans are designed to provide the information and incentive necessary for individuals to be more efficient consumers of health care. One critical aspect of controlling health care costs is that consumers need to spend money on medical care like it is their own and not “some large insurance company’s money”.
In the past, consumer directed plan designs have taken on many forms: Medical Savings Accounts (MSAs), Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs). Many experts consider HRAs and HSAs to be the first generation of consumer directed health care products with mass market appeal.
Health Reimbursement Arrangements are typically paired with a high-deductible health plan and are 100% employer-funded. HRAs are created to help the employee offset the higher deductible and provide the employer with the opportunity to reduce overall health plan costs. Plan parameters and eligibility are established by the employer. HRAs have not received as much press coverage as HSAs but are an excellent fit for many employers.
Health Savings Accounts are the latest version of consumer directed health care plans. The core components of HSAs include a high deductible insurance product and a cash spending account. Contributions to HSAs may be made by employers, individuals, or both. The dollars placed into an HSA belong to the individual and go with the employee should they leave the company. The dollars remaining in the HSA account at the end of the year roll over. Proponents of Health Savings Accounts describe HSAs as combining the pre-tax treatment of an FSA, the portability and roll-over characteristics of a 401(k), and the tax-free distributions of a Roth IRA.
Although the advantages of HRAs and HSAs can be substantial, employers will want to do their homework prior to setting them up. The type of consumer directed health plan that best fits your organization will depend on your corporate structure, the accompanying administrative requirements and the overall objectives of your group health insurance plan. Companies will also need to look into how the creation of an HSA or HRA may affect their HIPAA medical privacy compliance requirements.
Although consumer directed healthcare plans are becoming familiar to human resource managers and other benefit professionals, remember that your employees and their dependents will need a substantial amount of education and communication. Employee education will be essential to successfully implementing a consumer directed health plan. If done properly, the pay off can be significant for both the employer and their employees.
Why Does Health Insurance Cost So Much?
Why does health insurance cost so much? Year after year, many of the articles that appear in print detail the specific factors driving the cost of healthcare.
These factors include: general inflation, advances in drugs and other medical devices, rising hospital and doctor expenses, government mandates, increased consumer demand, litigation, fraud, and cost shifting.
The basic answer is that a magic bullet to solve the cost of insurance does not exist because the real difficulty is controlling the cost of healthcare. A simple way to dramatically decrease the dollars spent on healthcare is to reduce the demand for healthcare.
I have seen estimates that up to 40% of all healthcare related expenses result from preventable conditions. These preventable conditions are caused by lifestyle choices such as tobacco, obesity, stress, lack of exercise and poor diet.
Most of us, me included, make lifestyle choices everyday that eventually increase our demand for healthcare. We are never going to be able to totally eliminate all lifestyle related healthcare costs. However, improved lifestyle choices would cause a dramatic reduction in demand. This would then result in a similar reduction in the dollars spent on healthcare.
Lower demand for healthcare would result in lower health insurance costs, increased productivity, and reduced absenteeism. If your organization has not done so already, your organizational leaders need to seriously consider the benefits of health promotion and disease prevention programs. Your return on investment will most likely be as high as 2:1 in the first year.
