Don’t read this unless you’re making a lot of money!
If you want to know how you can save up to 47% on your current health insurance coverage… You will never have words after reading this message; Expensive and health insurance in a single sentence.
As you already know, health insurance costs are at an all-time high and they show no sign of slowing down. More and more Americans are forced to cancel their coverage simply because they cannot afford it.
Who are the uninsured?
- About 46 million Americans, or 15.7 percent of the population, were without health insurance in 2004 (the latest government data available).
- The number of uninsured increased by 800,000 between 2003 and 2004, and has increased by 6 million since 2000.
- The increase in the number of uninsured in 2004 focused on working-age adults. The percentage of working adults (18 to 64) who had no health insurance increased from 18.6 percent in 2003 to 19.0 percent in 2004. That increased to over 750,000 in 2004.
- About 82 million people – nearly a third of the population under the age of 65, spent a part of 2002 or 2003 without health insurance.
- The number of uninsured children in 2004 was 8.3 million – or the number of uninsured children in the U.S. 11.2 percent of all children in (1).
You can say that I have great coverage which I am happy with… that’s all right.
The average rate increase for health insurance for the past several years was 16.2% and what if this continues? If you’re paying $500 a month for your health insurance three years from now, you’d expect to pay more than $780 for the same plan. Wait… We all know that insurance companies continually reduce their benefits and increase co-pays and deductibles. That’s why you’ll pay more for less coverage. However, if you hold the same plan for more than five years, you will only pay more than $1000 per month for your medical coverage. What happens if you use your health insurance?… Chances are it will be considered a pre-existing condition if it’s not for regular doctor visits or checkups. This means your chances of changing to more affordable coverage in the future will be nearly impossible. This is one of the main reasons people cancel their health insurance because they were diagnosed with something or are taking prescription medication, and the insurance company keeps increasing their rate as long as they don’t have a prescription. Others could not qualify for coverage and could not afford what they had.
Now you are saying that I don’t need coverage. My spouse works in some company and I have group coverage… great.
What if your spouse left that job or the company stopped paying benefits? Probably the most obvious thing you can see is how much that group coverage is really costing you. Next time check how much is deducted from paychecks for health coverage, especially for dependents. Group plans cost more money because they are called “guaranteed issues” by law. This means you can have serious medical conditions and still get coverage. Insurance companies have to comply with the law and know they have to accept everyone who works for a larger company, so they charge more money for coverage. The biggest problem isn’t the cost of group health insurance, it’s what happens when a person, while on a group plan, diagnoses a condition or starts taking prescription drugs. We come back to the issues mentioned earlier, being unable to qualify for health insurance in the future. There are people who want to quit their jobs, but they cannot because they are undergoing treatment and cannot pay for it themselves.
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There is another solution… Some may save, so what’s the point of having health insurance. Once you diagnose something and the insurance company keeps raising rates to the point where I have to cancel it anyway. Especially if something happens and I have to use up my coverage I’m not working and I can’t have income. Will my insurance company continue to raise my rates? Yes.
Before you even think about canceling your coverage, consider this. Here are some figures
- A recent study by Harvard University researchers found that the average out-of-pocket medical debt for people who filed for bankruptcy was $12,000. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy after a serious health problem.
- Illness and medical bills led to 1,458,000 individual bankruptcies in 2001, according to a study published by the Journal of Health Affairs.
- The average day in the hospital is $7500 per day.
How can you save up to 47% on your health insurance? Simple… You have probably already heard of health savings accounts. They are becoming more and more popular every day. With health insurance prices rising today, health savings accounts are the only way to maintain your coverage, save hundreds per month on your health insurance, and still have peace of mind.
To date, I have not heard such a good definition that everyone can understand. I will do everything I can to make it easy to understand. The easiest way to understand health savings accounts is to think of them as a Roth IRA or your company’s 401k plan. You can keep more of it to yourself instead of giving your money to the insurance company. The way an HSA plan works includes health insurance along with a savings account that works similarly to your retirement account. There are tremendous benefits to having an HSA qualified health plan. The money you put into your HSA account first is 100% tax-deductible and is your money that rolls over from year to year. At age 65 and older, if you haven’t used up all of your HSA money, you can roll it over to your retirement account. Second, your health insurance cost is going to be cut in almost half. For example, if you have a $2500 deductible health insurance plan now and it’s costing you $300 per month, similar plans with an HSA-eligible plan will now cost you only $160 per month. You save so much money with an HSA qualified health plan because HSA qualified plans don’t cover anything until the deductible goes. There are exceptions depending on the health insurance company. Some insurance companies will pay for you once a year before you meet your deductible.
Let’s take an example of how an HSA qualified plan can benefit you. Let’s take some real numbers from a real health insurance company. In this example, I’m going to use HSA plans from a company called Assurant Health. Assurant Health is a leader in health savings accounts and one of the first to implement it. The main reason is that Assurant Health is part of the world’s largest financial company that sets up retirement accounts. In this example, I’m going to use a family of four, husband 46, wife 42, children 12 and 16. On a regular family plan with a deductible of $2500, a maximum of $5500, co-insurance 80%, and doctor’s visits covered with a $35 co-pay, they’re going to pay $676.40. It is worth noting that all the regular PPO plans available in the market today have a family deductible which is twice the individual deductible. This means that if you have a plan with a $2500 deductible and a maximum of $5500 out of pocket, it means that your family deductible is $5,000 and your family has a maximum of $11,000 out of pocket. When we are comparing HSA qualified health plans there is only one deductible, once you meet that you are covered at 100% on most plans. There are some companies and plans that allow you to account for a percentage age of the bill until you reach your out-of-pocket maximum. Most HSA plans don’t have a spend maximum, which means that once you meet your deductible you’re covered at 100%, it’s that simple. An entire family with HSA qualified health plans with a $5700 deductible plan will only cost $491.64 per month. For a total monthly savings of 184.76 per month. Plus your out-of-pocket HSA will drop from $11,000 on a regular plan to $5,700 with a health plan. This is an annual savings of $2,217.12 and an additional out-of-pocket maximum of $5,300. (If you’ve had to use the plan for emergencies) The main reason to start HSA health insurance is for a savings account and being able to put money into the account, at your discretion, tax-free. You can put money in an HSA qualified account up to your deductible and you don’t have to put any money in that account if you don’t want to. Health savings accounts are as flexible as you want them to be.