The big news right now is health care reform. On a practical level though, most of what is being done with health care reform is purely cosmetic. And besides, a lot of what is being done won’t actually affect you immediately. In the meantime, health care costs continue to rise. USA Today reports that PricewaterhouseCoopers expects health care costs to rise by 9% next year. And I’m already seeing increased costs, thanks to the age-based premium.
The fact that my husband and I both turned 30 this year means that we are seeing an increase of $80 per month in our premium, which make no sense. We live a reasonably healthy lifestyle, but you will notice that we don’t get any credit for the fact that I attend the gym, or for the fact that my husband hasn’t been sick for years. And, of course, we aren’t getting any sort of discount for the preventative flu shots (out of pocket) I got for my son so that he hasn’t been sick so far this flu season. Oh, no, no. But administrative fees abound, and turning 30 flips some sort of magic switch. So, even though my actual risk profile says that my health is improving and I’m less likely to be ill, I’m going to be paying more for health insurance in the coming year.
Since it will be a rather cold day in hell before insurance companies actually provide us discounts for responsible health behaviors, and since hell will, in fact, freeze over before the government does something effective for the people due to the gobs of money our representatives receive from the health care industry, I know I’m on my own for this mother of all money drains. So, here are some things I’m considering in terms of reducing the financial cost of health care:
- High Deductible Health Plan: The higher your deductible, the lower your insurance premium. If you are willing to pay more out of your pocket, your premium costs will go down. You may have a higher co-pay, and you may have to pay some of your other expenses yourself until you meet your deductible. Some people get plans with such high deductibles that the only reason they have them is to cover some sort of medical catastrophe.
- Health Savings Account: If you decide to go with a high deductible health plan, you might couple it with a Health Savings Account. This type of account allows you to put money into an interest bearing account that functions a lot like an IRA. You receive tax advantages, and you can use the money to pay for out of pocket expenses as you work toward your deductible.
- Cash Discount: Some health care providers will give you a discount if you pay cash. You can get between 10% and 20% off some services. I get a discount with some of my health care providers. Call yours to find out whether a cash discount is offered, or shop around for a provider that will work with you.
- Change Coverage: At the very least, you can change some of your coverage. Review what you have, and decide whether you still need it. I no longer need maternity coverage, and being able to drop it is a great benefit. Maybe you don’t need coverage for alternative treatments, or some other coverage you have. Evaluate who is on your policy, and whether or not they need to be. You can also look at your coinsurance situation, and whether or not some plan can be worked out with your partner.
In the end, planning ahead for increased health costs is necessary. Even if you don’t get a Health Savings Account, you should still set aside some sort of emergency fund to help cover unexpected expenses and cover costs. Your Flexible Spending Account at work can also help with this. Look at your financial situation and see whether you have any extra money that you can put aside for health care costs. Add it into your budget, since you never know when you will need it.
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{ 13 comments… read them below or add one }
Health care is something that most people neglect because it’s included in their employer plans.
Last time I went to the doctor, they charged my insurance company $200 extra just on giving me advice on what I should do when I get a flu (this is on top of the regular doctor visit charges).
Another time, the doctors billed the insurance company for urgent lab tests when it was just a routine checkup.
If only we question why everything cost so much, I bet the overall health care cost will come way down.
You make a good point, Richard! We don’t question costs. My dad’s doctor tried to double bill, calling a couple months after the fact and claiming the insurance company returned the bill, even though the company had paid. My dad told the doctor he’d check with the insurance company first, and the doctor then decided it was all good. We really do need to look at everything. The system is set up so that everyone from doctors to insurance companies can milk the rest of us for everything, if they are unscrupulous enough to try.
Not to sound like a jerk but take care of yourself and stay healthy and you will have less health costs.
There is some truth to that. But I’m healthy, and taking care of myself, and my health care costs keep rising. It’s true that they would be higher if I were engaging in unhealthy habits and what-not, but they still rise every year. I get not credit for my efforts. But when someone in my “group” at the health insurance company becomes unhealthy, I still pay for it. I’m doing what I should be doing, but the current health care system doesn’t reward me for it; I still get socked with rising costs.
I go in once a year for my preventative physical, and that’s it. Sometimes, I have to go in because of some illness. But that only happens once every two or three years. And my uncle, who has done everything right for 60 years was diagnosed with cancer. Twice in the last five years. So there’s only so much you can do. And even those who do what they should be doing get the shaft.
Agree which is clearly why the debate on health care is so intense. Why are those who are taking care of themselves not rewarded, but instead asked to pay for those who don’t? Seems like we should be rewarding those who take care of themselves somehow, clearly nothing clear cut has come yet.
The “debate” isn’t even about the right things. It’s not about encouraging prevention. It’s not about costs. It’s not about some of the practices including kickbacks for not ordering tests, kickbacks for prescribing certain drugs. And it skates over the fact that we already have exactly what everyone’s arguing against. We have a socialized health care system in which we all pay for everyone else. We are already told where we can go to receive treatment, and whether we can get coverage. A panel of people even decides whether or not you can get life saving treatment. The only difference between this and government run health care is that private companies are profiting. It’s socialized capitalism at its finest.
I clearly don’t know enough or understand enough to fully understand everything because it is so large and complicated and so many different things although I do have my own minor opinions, and they sound very similar to yours. Do you have an site that offers more of a cheat sheet version on what’s happening right now that is up to date?
It is really unfortunate that your premium has increased by that much! $80 per month is a lot and that definitely adds up within the year. It would be a really great idea if those who actually are healthy and don’t frequent the hospital that often should get cheaper premiums or some sort of discount from the government.
@Craig It keeps changing, unfortunately. But most of it is useless. Here is something from Reuters about the major differences between Senate and House versions: http://www.reuters.com/article/idUSN0425189620100105?type=marketsNews
@CD Phi No kidding! It’s a huge increase. Just because my husband and I turned 30! It’s a $40 increase apiece. So yeah, I’m bitter. If I were a serious risk, I wouldn’t be. But I’m doing most things right!
The biggest thing you need to be aware is that underwriting is a bitch.
If you’re going the personal insurance route, you need to be sure you can pass underwriting, or you won’t get covered by a long-term plan. And they don’t make exceptions for people outside the “passable” range.
Miranda and All, good luck this year regarding keeping health care costs down. Prices just keep going up. I’d much rather pay more, for more coverage, than less, in case disaster strikes.
Lack of health care is the #1 reason for personal bankruptcies. Don’t get caught with your pants down.
Best, Sam
If you’re healthy, it might make more sense to go with a high-deductible plan. Don’t stick with your current plan if your insurance company is jacking you around.
-Erica
@Sam I would never dream of getting rid of my health insurance altogether. I know the risks, and I have to think of my son. But, as Erica points out, I am thinking of a high deductible plan and the HSA. I can set enough money aside to cover the deductible, and pay much lower premiums.