Health Insurances

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.

MORE ARTICLES:

Travel Health Insurance: Don't Leave The Homeland Without It
Insurance is designed to give us peace of mind. It is there to help us when things go wrong. Whether it is insurance of our health, possessions, or income, we willingly pay our premiums in order to rest easily in knowing that we are protected from loss. Yet it is truly ironic that when we are farthest from home and on foreign lands, our health insurance is often at its most useless. For peace of mind when traveling or living internationally the smart traveler is sure to purchase travel health insurance.

How To Get Low Cost Health Insurance In The Commonwealth Of Virginia
Did you know your credit score could be affecting your chances of obtaining low cost health insurance in the Commonwealth of Virginia? It?s true. Many health insurance companies look at a potential policyholder?s credit score when determining how much that person will pay for a health insurance plan.

How Could Short Term Health Insurance Help Me?
Short-term health insurance plans allow people to have health insurance for a limited amount of time. It is the type of health insurance that most benefits those who are between jobs or who find themselves waiting for another form of insurance to start. For example, college graduates and those who have recently been removed from a particular job are most likely to use a form of short-term health insurance. This type of coverage is available for both individuals and families. While the cost of short-term coverage tends to be much less than long-term plans, many people are still not quite sure as to how the whole process works. If one is going to purchase a plan, it is wise to be aware of what to expect.

Take Control Of Your Health Insurance Premiums
Private health insurance may not be a necessity for everyone, but it is certainly one of those luxuries that can make a big difference in your life A good private medical insurance policy can ensure that you and your family have greater control over your healthcare and that you are treated quickly by professionals in surroundings that are well equipped and comfortable

How To Get Affordable, Low Cost Health Insurance
There are several ways you can obtain affordable, low cost health insurance. If you?re employed, your employer may offer a group health insurance plan for employees. Married individuals can usually opt to be covered under their spouses? health insurance ? their children can be covered, too. If you belong to a club or organization, you may be able to take advantage of group medical benefits offered by the club or organization. Of course, you may be able to afford an individual health insurance plan.

Knowing When to Buy Health Insurance
Health insurance is essential in this day and age, yet many people simply do not bother to take it out. Either it is too expensive or they do not think they will need it, either way they end up completely unprotected. Some companies offer their employees health insurance at a discount price, though it is not a requirement and some employers just do not give you the option. If that is the position you are in you may want to think about taking out health insurance away from the company.