Archive for February, 2014

Individuals Paying More for Health Insurance Without Government Subsidies

Friday, February 28th, 2014

On the heels of the Office of the Actuary of the Centers for Medicare and Medicaid Services report detailing premium increases for many small businesses, there is another report saying that individuals are paying more for health insurance as well.  According to The Business Journal’s Kent Hoover in his article “Take out subsidies and Obamacare is Really Expensive,” those Americans who are not receiving government subsidies are paying significantly more in health insurance costs.  Some Americans qualify for government tax subsidies when they buy an individual or family health insurance plan in the health insurance exchanges.  Low and middle income Americans can buy insurance plans through the government website or individual state health insurance exchanges and receive a tax break based on their income level.

But eHealth Inc. just performed a study to see how much health insurance plans cost for those who don’t qualify for the government subsidies.  They compared data from before the Affordable Care Act went into effect with plan costs as of February 24 of this year, after the ACA prices took effect.  Average individual health insurance plans now are $274 per month.  That is a 39% increase from average plan costs before the ACA requirements changed health care.  Family plan monthly average costs increased to $663 per month.  This is up 56% from the same time last year.  The company performing the study sells an array of health insurance plans and wants to highlight what they perceive as the negative changes brought about by the Affordable Care Act.  Those who already had affordable health insurance may be negatively affected, while those people who didn’t have health insurance or with very high plan costs receive the benefits of the health care law.

Compare health rates from multiple insurance companies to find the most affordable premiums for you or your family.  If you don’t qualify for a government subsidy or have health insurance through your employer, there are countless health insurance plan options available from an array of health insurance companies.

11 Million People Will See Increasing Small Group Health Insurance Premiums

Wednesday, February 26th, 2014

Do you have health insurance coverage through your small business employer?  Are you a small business that offers health insurance to its employees?  If so, your premiums may be increasing because of the Affordable Care Act.  ABC 17 News’ Parija Kaviland posted an article saying that the “ACA will raise premiums for 65% of small firms.”  The main reason for this change is that small business health insurance premiums were figured based on employees’ health status and gender.  So groups filled with women of child bearing age would pay more than groups filled with young, healthy men.  Under the new law though, pricing for small group health insurance can no longer be based on health status, gender, or how often the health insurance is used.  This levels the playing field for businesses that employed older or less healthy workers, but also will raise the costs for those small businesses who had healthy workers that didn’t use many health insurance services.

Overall, the Centers for Medicare and Medicaid Services estimates that 11 million people will see increasing costs as part of that 65% of small firms.  This does mean that 35% of small businesses will likely see premium decreases, however.  Many of the lower premiums will be offered because those particular small businesses employed older and sicker individuals on average.  The younger, healthier workers will not be able to take advantage of lower premiums anymore.  But the CMS report noted that small businesses are eligible for tax credits just like individuals are under the Affordable Care Act.  Credits are based on how many people are employed, their average salaries, and how much they contribute to their insurance plans.  Tax credits will help some small businesses counter the effect of increasing premiums.

The CMS report did not estimate how much premiums would increase for the 11 million people expected to see their payments go up.  They also didn’t say how much payments might go down for the other 6 million people enrolled in a small group health insurance plan.  The only certain thing is that no one will be able to take advantage of offering lower than average premiums because they have young and healthy workers anymore.  One downside of that was that even if one person got seriously ill, rates could increase dramatically for everyone in the plan.  This new system seeks to make premium costs fair across the board.  They shouldn’t be as affected by one illness or a few women getting pregnant and incurring high health care costs.  Some plans have been grandfathered in and will not be affected by these changes just yet.  If you are looking to compare health insurance in an individual or small group plan, we’d be happy to help you receive quotes from multiple insurance companies.

Health Insurance Is Going the Way of Retirement Plans

Sunday, February 16th, 2014

Just a couple decades ago, American retirement plans made a big shift from pensions to 401k’s.  Instead of receiving a defined benefit pension, workers started contributing to plans and making their own decisions about how they would receive their money.  A lot of people are forecasting a similar change in the health insurance industry over the next 5-10 years.  Right now many employers offer health insurance in a defined benefit way.  They choose the exact health insurance options and you can choose to pay for the plan or opt to buy your own individual health insurance.  Insurance News Net posted an article from The Pittsburgh Post-Gazette’s Bill Toland which says that “In 2020, Workers Will Decide (their own) Health Benefits.”

Many experts believe that the face of health insurance will change dramatically.  They forecast that people will shop online and choose the specific health insurance options that they want for themselves from private exchanges.  Companies will pay a certain stipend to their employees via a health account and that will go towards their health insurance plan costs.  If people choose a health insurance plan that is more than their employer stipend, they will have to pay the rest of the bill themselves.  They will shop in online private health insurance exchanges run by health insurers, like Highmark, or benefits consultants or brokers..  If an insurance company is running the exchange, all of the plans will be from them.  But if the exchange is run by benefits consultants or brokers, there will be plans from multiple insurance companies.  Plans will differ in prices and coverage.  Each exchange will likely offer around 6-10 different plans.

It was easier for large companies to make the pensions switch because they almost immediately saw huge cost savings.  It is a little different with the health insurance plans because although they will not see huge cost savings, they will see a large reduction in the amount of administration.  They are also offering better benefits to their employees, making them more competitive as employers.  But small and mid-sized employers will see even more benefits initially than the larger companies.  Experts predict that many smaller companies will make this switch to private exchanges in the next year and a half.  Larger companies will switch as well, but it will take a large employer like McDonalds or WalMart making the big move before many other make the jump as well.

Get Paid to Take Your Medications

Sunday, February 9th, 2014

It seems strange, but you really might start getting paid by your insurer to take your medications, quit smoking, and go to the gym regularly.  According to Forbes magazine’s Robert Szczerba, we should watch for a big shift in the healthcare industry.  We currently have a “fee for service” model, where doctors and hospitals get paid for each service they provide.  But in “Why Your Insurance Company Will Pay You to Take Your Medicine,” Szczerba says that the shift will take us to a “fee for outcome” model instead.  This means that doctors and hospitals will get paid when their patients have a successful health outcome, no matter how many services they have provided.  This approach is meant to help lower overall healthcare costs and will reward patients and doctors with smaller “micro” payments rather than the large “mega” payments that providers currently receive.

Right now the healthcare system is way too focused on big money.  Medical students want to go into big money specialties and marketers target big money medical devices.  Large payments from insurance companies to doctors and hospitals encourages them to continue ordering more tests and doing more procedures.  When we have the mindset that more care is better and that we need intervention instead of waiting minor problems out, and doctors and hospitals get paid more for each intervention, it’s the “perfect storm” for America’s overuse of health care.  We use more services than anyone else but are certainly not the healthiest nation by far.  In order to make this overall change to the health care system, we as Americans have to change our mindset when it comes to healthcare, health insurance, and overall health.

Believe it or not, clinical health care is only a 20% factor in our overall health care.  Healthy behaviors actually account for 30% of a country’s overall health and 40% is made up of socioeconomic factors.  It’s more effective to focus on preventative care like smoking cessation, exercising, eating right, and properly taking prescription medications.  Close to 1/3 of prescriptions never get filled.  In most cases, it is cost effective to pay patients $1 per day for keeping up with heart or diabetes medication than it is to pay for their future problems related to not taking prescribed medications.  When doctors take a conservative and supportive approach to medical care by not ordering unnecessary testing and taking a wait and see approach when applicable, thousands of dollars can be saved.  Micro payments to doctors who are conservative encourages better behaviors all around and can lead to lower overall healthcare costs.  Those people who are truly sick will still receive the necessary testing and treatments in this new system.  But people who are a little bit sick or not really sick at all will be given a more conservative treatment approach to save money all around.  Health insurance companies will even be able to lower premiums when the system isn’t so misused and overpriced.