5 Basic Facts About Health Insurance Policies In A Bad Economy
Health insurance plans are no longer a luxury. There is more to health care than being healthy. We must be able to afford it, and chronic condition illnesses are beginning to take away from our quality of life. It's not like the good old days when people only had minor problems that could be managed with home remedies and over-the-counter drugs. Health insurers want you for their beneficiaries because they'll pay you to be healthy; the healthier you are, the less money they will have to spend on your care and treatment. The following are five basic facts about health insurance policies in a bad economy.
1. You have to have a policy to carry health insurance. Health care is becoming more expensive, and the cost of living has also gone up; thus, we need an affordable insurance plan that can cover our medical needs. It's not just about us getting ill; it's also about us getting injured. And even if you don't think it will happen to you or your family, you will eventually need some form of health care service be it now or later.
2. The deductible is one of the key elements of your health insurance policy. A deductible of $1,000 is very cheap compared to the out-of-pocket maximum, which can reach $10,000.
3. There is no such thing as a free lunch. It's true that health insurance policies do not have any premiums, but you will still have to pay for some medical expenses every month. In fact, spending under $300 on a doctor's visit and over $250 on co-pays and deductibles may be considered as one of the best spending decisions you ever made.
4. Health insurance plans are not in business to spend your money; they're in business to make money. You'll just have to spend more than what you earn, but you won't end up bankrupt.
5. You can get a health insurance policy for yourself and your family regardless of your age or medical history. Insurance companies are able to do this because they conduct extensive background checks on applicants, including their financial records and even the company they work for. Your health condition does not matter as long as you follow specific instructions regarding your lifestyle, diet, alcohol consumption and other wellness habits.
Be healthy because it will help you save a lot of money, too: not just on monthly premiums but also in terms of overall out-of-pocket expenses if you do get sick or injured. When you feel good, your health is more likely to be in tip-top shape.
There are some tips for staying healthy. Drink at least 10 glasses of water a day. Take evening walks and make sure not to consume too much alcohol or smoke cigarettes. Wear comfortable shoes and avoid sitting on hard surfaces (especially if you have a history of back pain). Don't forget to take your vitamins and eat fruits and vegetables daily (avocados are your best bet). Make sure you get enough sleep every night (7-8 hours). Exercise regularly and do so for at least 30 minutes 3 times per week.
Remember, there will be plenty of time to rest once you're healthy and retired.
Source: Health Care Reforms Affecting the Health Insurance Industry , United States Institute For Health Care Reforms (USIHC), April 19, 2012
Source: http://www.healthcarereformdaily.com/articles/5-basic-facts-about-health-insurance-plans-in-a-bad-economy/hcd#ixzz2Qw1EoLfP
For two revenue neutral health insurance plan designs that would promote health and reduce costs to US taxpayers click here.
The following information is from an article entitled "The Health Insurance Industry: An Analysis of the Patient Protection and Affordable Care Act" by Larry Levitt on the Kaiser Family Foundation site. It covers how last year's health care law would affect profits for insurers.
Excerpts:
INSURERS' PROFITS WILL INCREASE UNDER THE MARKET-BASED REFORM ACT
The Patient Protection and Affordable Care Act will raise premiums, but this will not reduce insurer losses because it is a tax. Insurers would take the hit only if they chose to forgo premium increases and issue less generous coverage in response to higher premiums, which is unlikely.
In fact, insurers' profits will increase under the law because it will bring in more business. The legislation requires every American to obtain health insurance or pay a penalty. To meet this requirement, healthier uninsured people will likely buy coverage when it is available at low cost. This will have two effects on insurance companies: first, more premiums to cover and, second, less medical spending per person covered as sicker policyholders buy coverage with the help of federal subsidies.
The combined effect of these changes is not widely appreciated: insurers' take-home premiums will rise as business increases but so will their profit margins.
Changes in the law will likely have a greater impact on insurers' profit margin than the increase in premium revenues.
The market-based reform act will not pay for itself. The Congressional Budget Office (CBO) estimates that the legislation will reduce federal budget deficits by $138 billion over 10 years, but this is not because of offsetting tax increases or reduced spending on subsidies to help people buy coverage. The CBO concludes that "the assumptions underlying the estimate of revenue effects are not based on an analysis of any specific legislative proposals." The score reflects a broad assumption that incentives to purchase health insurance will result in increased revenues for insurers that results in higher premiums and more profits, with no offsets from fees or penalties paid by insurers. The CBO believes that increased premiums and higher profit margins will result in stronger insurers and a healthier population that pays higher premiums for the same insurance coverage.
The federal government will collect more money from subsidies for health insurance purchases than it spends to help people buy coverage with the publication of the Congressional Budget Office estimate of the law's budgetary effects, even though revenue gains will depend greatly on how many people actually enroll in coverage. The CBO projects that 87 percent (about $700 million) of projected federal outlays for subsidies over 10 years is generated by individuals who purchase health insurance with their own money, not through Medicaid or other programs financed by other taxpayers.
Conclusion: The law will reduce federal budget deficits without shifting costs onto the federal government because the costs of increased coverage are offset by increased revenues to insurance companies.
Source: http://healthreform.kff.org/?a=rulebook&r=80#26
The following information is from "Understanding Health Reform" by Linda Blumberg and John Holahan, published by the Urban Institute, October 2009: A Summary of Congressional Action on Health Care Reform over a Decade
Excerpts:
OVERVIEW OF HEALTH CARE REFORM OVER THE LAST DECADE . . . .