Health Insurance Blog

The Blue Cross and Blue Shield Association recently released the findings of a research study which concluded that health insurance shoppers are much more vigilant about both their health as well as their health care related costs when they are enrolled in a consumer-directed health plan (CDHP).

Specifically, the report entitled 2008 CDHP Member Experience Survey found that members enrolled in CDHPs were:

• 30% more likely to track their health care expenses and
• 27%  more likely to ask their doctor about the costs of treatments before moving forward

In addition, enrollees were more proactive in seeking preventative care such as check-ups, physicals, and preventive screenings.

In aggregate, Blue Cross Blue Shield member health plans cover more than 4.4 million members nationally with CDHPs, of which about two-thirds are enrolled in health savings accounts.

visit http://www.bcbs.com/news/bluetvradio/consumerdriven2008/ for a webcast of the complete presentation.

In article written by Joan Mazzolini of the Cleveland Plain Dealer, Ohio health insurance rates have increased 9 times faster than the rate at which wages have risen.

From 2000 through 2007 the average cost to insure a family in Ohio through employer sponsored health coverage increased over 80% while wages rose less than 9% over that same time period.  Individual health insurance rates in Ohio increases just over 60% over the same time frame.

According to Ron Pollack of Families USA

Rising health care costs were a problem in Ohio before the current economic downturn emerged, and slow wage growth combined with significant job losses have made matters worse.

The only state that showed a larger disparity between the increase in health insurance premiums and wage growth was Michigan.

As health insurance becomes more expensive relative to earnings, many people have difficult decisions to make in order to make ends meet.  Going uninsured is never a good idea, as a serious injury or illness can leave you financially crippled.  One way to lower your monthly health insurance premiums is to change your health coverage to a plan with a higher deductible, such as an high deductible health plan combined with an HSA.

Health Savings Accounts, more commonly known as HSA, were launched by the government in the 4Q of 2003. Initially the effectiveness of these health insurance vehicles was questioned, due to the slow adoption rate by Americans, but now five years later HSAs have proven to be a great way to save money if you understand them and utilize them properly.

With an HSA (paired with a high-deductible health plan) you can save as much as 50% in monthly health insurance premiums.  Your deductibles will indeed be higher should you need to utilize health care but if you properly fund the Health Savings Account, using the money you saved by paying lower premiums this money can be applied towards covering the higher deductible.

Health Savings Accounts have tax advantages as well.  All of your contributions to your HSA — that’s right 100% — are tax free.  In addition the interest that accumulates on the money that you maintain is 100% tax free.  Furthermore, withdrawals from your HSA are 100% tax-free when used for qualified medical expenses.

In years where your health care utilization is low or non-existent, not only will you have saved up to 50% on your premiums, but the money that you used to fund the HSA was not taxed as income, and it has grown tax free in an interest bearing account.

At age 65, you can withdrawal the money from your HSA for any reason, and be taxed at the ordinary income rate.

As you can see by the above, there are many economic reasons why a health savings account is a good health care solution for your family, particularly if you and your family are generally healthy.

Health insurance companies are legally obligated to offer high-deductible health plans that that are eligible to be paired with an HSA, but the reality is, if they encourage their customers to opt for health plans with a higher deductible and lower premiums, they will cut into their profits.   Subsequently, health insurance companies do not always promote their HSA options as vigorously as other health insurance options.

If an HSA seems like the right health care choice for your needs, you can compare rates here at healthinsurancesort.com.  Alternatively, if you plan to shop for your health plan from a agent or broker, be sure to ask about what HSAs are available.

As written in Charleston.net, nearly 10% of South Carolina residents (nearly 400,000) are “underinsured” (defined as a person who spends 10% or more of their income on out-of-pocket medical expenses, or has a deductible that equaled 5% or more of their income).

Lacking sufficient health insurance coverage is a dangerous proposition, you could be a major accident or illness away from a serious financial bind or even bankruptcy.

The number of Americans that went underinsured increased 60% from 2003 to 2007, according to the Commenwealth Fund, and a full 14% of Americans are now underinsured.

The majority of people who are characterized as uninsured opted for a stripped down health plan, or a high-deductible health plan (without the accompanying health savings account) or selected a health plan from fly-by-night health insurance company simply because it was cheaper.