Employee Benefits / Health Insurance Benefits

It is estimated that 45.8 million Americans do not have health insurance.  Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.  The study estimates that medical bankruptcies affect about 2 million Americans annually.

 

Before you have a medical emergency, it's important to know how to understand the basics of your health insurance benefits. Some of the basic features include:

 

Premiums. You want to know how much your monthly insurance premium is and whether your employer pays a part of it.  Monthly premiums can easily reach $400 for single persons and two or three times that amount for families.

Employers often obtain health insurance for their employees with a group policy. By spreading the risk among more insureds, group insurance plans are often able to obtain more affordable premiums.

 

Deductibles. A deductible is the amount you pay the physician before your insurer pays its share of your medical bill. Generally, the larger your deductible is, the smaller your premium. You may wish to consider increasing your deductible in exchange for a lower premium. Higher deductibles are a common way for insurers to make insureds share in the cost of health care.

 

Copayments. A copayment is the amount you pay when you visit a doctor. Like a deductible, a copayment is a means of sharing the costs of health care to discourage excessive use of benefits. Copayments are often in the range of $20-$50 -- not too much but high enough to discourage frivolous use of your benefits.

 

Out-of-pocket expenses. Out-of-pocket expenses are the costs you have to pay, in total, before an insurer pays for any remaining amounts. Amounts you pay as deductibles are included in your out-of-pocket expenses, which are kept as a running total. Most health insurance plans also have a yearly maximum for out-of-pocket expenses that you have to pay. Once you have reached your maximum for the period, you're usually done paying for that period.

 

Coverage of services. When it comes to the coverage of medical services, some employer-sponsored health plans are simply more generous than others in the scope of services that they cover. You should be aware of any procedures or medical disorders that your health insurance plan does and does not cover.

 

Deductible - A deductible is the dollar amount that you must pay on an insurance policy before the insurance company begins to pay your claim. A higher deductible means you pay more before the insurer begins to pay. The benefit of having a higher deductible is that you will pay a smaller premium.

 

Copayment - A copayment is a shared payment your insurance plan requires you to make each time you visit a doctor or other health care provider. A copayment is a cost-sharing mechanism. It is used by insurance companies to control health care costs and curb abuses that sometimes occurs with indiscriminate use of health care.

 

Out-of-pocket expense - Out-of-pocket expense is the money you pay before an insurance company pays for your claim. Your insurance policy may have a maximum yearly out-of-pocket expense. This is the most you have to pay in a year for using your benefits.

 

Open enrollment - Open enrollment is the window period, usually once a year lasting for a month, where you can make changes to your group health insurance plan. Open enrollment is generally a once-a-year period that lets you modify your insurance coverage. If you give birth to a child or have a change in your marital status, you are allowed another opportunity to modify your health insurance coverage.

 

The Impact of Rising Health Care Costs

·         National surveys show that the primary reason people are uninsured is the high cost of health insurance coverage.

·         Economists have found that rising health care costs correlate to drops in health insurance coverage.

·         Nearly one-quarter (23 percent) of the uninsured reported changing their way of life significantly in order to pay medical bills.

·         Almost 50 percent of the American public say they are very worried about having to pay more for their health care or health insurance, while 42 percent report they are very worried about not being able to afford health care services.

·         In a poll conducted by the Harvard School of Public Health, 43 percent of respondents named high costs as one of the two most important health care issues for government to address.

·         One in four Americans say their family has had a problem paying for medical care during the past year, up 7 percentage points over the past nine years. Nearly 30 percent say someone in their family has delayed medical care in the past year, a new high based on recent polling. Most say the medical condition was at least somewhat serious.

·         A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. 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 in the aftermath of a serious health problem.

·         One half of workers in the lowest-compensation jobs and one-half of workers in mid-range-compensation jobs either had problems with medical bills in a 12-month period or were paying off accrued debt. One-quarter of workers in higher-compensated positions also reported problems with medical bills or were paying off accrued debt.

·         If one member of a family is uninsured and has an accident, a hospital stay, or a costly medical treatment, the resulting medical bills can affect the economic stability of the whole family.

·         A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings.

·         Retiring elderly couples will need $200,000 in savings just to pay for the most basic medical coverage. Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.