Any doctor believes in how a stitch in time is able to head off having things worsening in the future with  poor care right now. There are advocacy groups around the country, like Families USA for instance, who argue that this particular problem with high deductible health insurance plans is not the half of it. People love high deductible health plans because they charge you a smaller premium in return for your promise that you will pay yourself for any problem that costs less than a certain amount they determine - $1000, or so. What this means is, that unless you happen to be in a tragic health situation, you can consider yourself as having no health insurance. It won’t kick in until your expenses spiral out of hand.

The savings can be significant too; for an entire family, it can cost no more than $6000 for the whole year. And you can also use it as a tax-sheltered savings account if you sign up for a plan that charges no more than $2500 in deductibles. The problem with this plan is that it is always used by people who have very little money. It was in fact, originally designed for people who have lots of money, but just don’t want any bother with high insurance costs. It is for people who are confident that they can swing it on their own. But employers and others have since co-opted these health insurance plans for how cheap they are. And if you feel that it is good enough for the little cover it gives poor people against at least expensive health problems, that may or may not work; depending on what kind of loopholes your insurance provider has put into the deal.

The thing is, the health insurance companies aren’t really there to help you - and if they charge a very low premium, it is not just because you take on a good part of the responsibility, agreeing to a high deductible. If your high deductible premium is really low, what you need to do is to watch out for other cost-cutting measure measures built into the plan. Some of them add up every single thing you charge to your health insurance plan, and say that over your lifetime, you cannot charge any more than a certain amount. They have a cap on how many times you can visit the doctor each year, and if you are admitted for hospitalization, they won’t cover any of your expenses the first day - the day you’re likely to have the most expensive charges. Using services like Ehealthinsurance though can be a great help looking closely into all kinds of plan details. Getting a good health insurance broker should work well too. And don’t go about applying for health insurance at different companies left and right. Any time you’re turned down by one company, the others will be able to share that information, and they will turn you down too.

Tags: health insurance

Most commercial health insurance companies have three objectives: collect dollars from premiums, pay off overhead with what’s collected, pay off claims, and have about 3 to 6 percent of the total collected remaining as net profit. This profit goal is relatively modest. Americans pay $2 trillion dollars a year on health care, including the operating costs and profits of health insurance companies. This averages out to approximately $6,551 for each man, woman and child in the United states, or approximately $537 a month. At a 6 percent profit, the industry is earning $120 billion a year. This averages out to $387 a year, or $310 million in total from what Americans pay towards the insurance companies’ profits, or $32 a month. A mere 5 percent of what you pay each month for health insurance goes to the profits of the insurer. You pay that percentage to a taxi cab driver as a tip. Obviously, the health insurance companies are not charging their customers an excessive percent of the total for health insurance. Yes, they are in it for the money, but they’re not gouging us.

All organizations have some leakage of cash, and the health insurance industry is no exception. Their organizations spend a great deal on administrative costs, streamlining their operations, and increasing efficiency of operations. All this may go to reduce their operating expense and thus, the cost of insurance for us, but we can’t expect significant savings here.

Yet the new Health Reform law is requiring health insurance companies to spend 80 percent of those $2 trillion on medical treatments. That means they’ll have $400 billion left over. Subtracting their profits ($120 billion), they’ll have $280 billion to cover overhead. If they are able to reduce operation costs by just 1 percent, or $2.8 billion, and turn that into premium reductions, the $537 each person now pays is then reduced to $528, a savings of $9 a month or a savings of $108 a year. Although every penny counts these days, these numbers aren’t too significant to most of us.

Health insurance companies have been mandated by the new Health Reform Law to modify some of their policies, which may raise the cost of insurance. They are now prohibited from dropping people from insurance while they are sick. Now, they cannot deny coverage to children with pre-existing conditions. They can no longer impose a cap on the amount they will pay during a person’s lifetime. In 2011 they have to start paying 80 percent of their earnings towards medical treatment. In 2014 they can no longer refuse to sell policies to anyone, with or without a pre-existing condition, and the price they set for policies can’t be based on the customer’s health condition. So, by 2014, no one will be excluded from obtaining health insurance in the United States.

These measures, particularly the provision that doesn’t allow insurance companies to deny insurance based on a person’s health status, will go a very long way in reducing our overall health care costs. With universal coverage, many illnesses can be cured in their early stages, thus avoiding the most expensive treatments, those in the emergency room.

All of us should pursue a clearer understanding of the purpose of health insurance companies. They are not humanitarian, non-profit organizations, but businesses with the objective of making a profit. Much of the misunderstanding is fostered when an ailing patient is told by the insurer that their medical requirements are not covered by their policy. It is therefore absolutely imperative that you’re clear about what your policy will cover before you enter into an agreement for coverage. Nobody likes to spend money needlessly, but when it comes to spending money on your health, without an insurance company, you could do worse. Know your policy and expect health insurance companies to strictly abide by it. Whether we like it or not, we can’t do without them, and they can’t do without us. You’ll appreciate them most when that $13 thousand dollar bill comes in following a brief visit to the emergency room, and you don’t have to pay a dime. Then spend or save that $13 thousand for your future needs, such as college or retirement!

Tags: health insurance companies

Health insurance for individuals is expensive simply because you aren’t bringing  any business to the insurer but yourself. Like other products for sale, the greater the amount you purchase, the cheaper the cost per item charged. Because large corporations can bring more business to insurers, they are given the best premium rates per employee. It’s as simple as that. You can’t blame the insurers. After all, health insurance is a business, not a humanitarian undertaking. Numbers are important to their bottom line, as it is for any business. The more they sell, the greater the profits. As a lone wolf, you’ve had to face the fact: alone, you’ll pay the most.

In its Health Reform Law, the federal government undertook bringing affordable insurance to all Americans. Recognizing that many self—employed people were uninsured because of the price tag on health insurance for individuals (as well as for small businesses), the framers of the law saw fit to include a requirement that aims to bring insurance cost for the ‘lone wolf’ down to the same price as the corporate man or woman now pays. In the near future, health insurance for individuals will be available at group rates. This will be made possible by the proposed health insurance ‘exchanges’.

The concept of health insurance exchanges is a brilliant solution to the inequity the self-employed individual now endures. These exchanges will be available throughout the country. Each exchange will represent a pool of many thousands, perhaps millions, of people up for health insurance. At each exchange, health insurance providers will make their products available, and the number of people  in a given exchange will be treated as a group, just as the employees of a corporation are treated as a group. The people who will belong to the exchange will be owners of small businesses and the self-employed (or unemployed) individual. Being a part of a group, these individuals are no longer required to pay premiums at their highest rates. They’ll get them at group or exchange discounts.

If you’re a self-employed individual looking for medical insurance, you’re in luck. Shortly you’ll be able to purchase health insurance at attractive corporate rates. It makes you wonder if the government, having done this, might not soon turn to the inequities in the tax code that penalize self-employment. For now let’s be happy we can finally get health insurance for individuals at affordable prices. We can be healthy and live!

Tags: health insurance for individuals

The health industry accounts for fully one sixth of the United States economy! Americans spend $2 trillion a year on health care, most dollars coming from health insurance providers who, of course, collect their money as premiums on health insurance policies. Health insurance providers make 3 to 6 percent profit from their premiums; the rest goes to operations and claims payments. The new Health Reform Law of 2010 has now put providers on notice: by 2011, providers must allocate at least 80 percent of premium payments to treatment. They’ll be forced to operate on 20 percent of their collections and extract their profit as well. This measure is intended to force providers to streamline their operations, control their expenses, and to reduce tendencies to deny claims. In the future, we can be assured, our providers will pay all legitimate claims without too much fuss. Good news indeed.

Health insurance providers have been saddled with additional burdens as a result of the passage of the Health Reform Law. After March 23, 2010, when President Obama signed the bill into law, providers were to immediately cease the practice of dropping a person’s coverage just because they get sick. Neither are they to deny coverage to sick children. In 2010, they are also ordered to remove lifetime caps, enabling the elderly sick to continue receiving care. The first year insures the sick will be able to get treatment, and that no one covered by insurance be denied when they need it most. Following this law, the health care insurance industry will no longer be open to accusations of inhumanity.

As said above, 2011 will require health insurance providers to spend 80 percent of their premiums on medical treatment. It is in 2012 that the industry will experience the full force of the law, as then, no provider will be permitted to refuse insurance to any U.S. citizen. They’ll have to make insurance available to everyone, sick or not. While this could prove an unfair burden as new claims from the sick will increase their payouts, the law has balanced this possibility with an equally binding force requiring all Americans to have medical insurance. Since insurance for the about 24 million poor Americans will be subsidized by $350 billion from the U.S. government, 2012 should see health insurance providers realize an increase in profits.

All of these measures are meant to control health care costs in the U.S., to provide all citizens access to insurance, and to assure the sick always have care. If all goes as planned, we can expect to see the reputation of health insurance providers at all time highs. Given what they do provide for society, that reputation should have always been high. Getting rid of those ‘bad apples’ should  renew our confidence in them again, with heartfelt gratitude.

Tags: health insurance providers