Why is individual medical insurance and employer-sponsored group health coverage so expensive? Although healthcare expenditures in the past few years have slowed because of the great recession, health plan premiums continue to rise each year. Is there any end in sight? Can I find inexpensive health insurance?
While the new healthcare law of 2010 was very effective at addressing access to medical insurance and patient protection, it did little to control what the private sector pays for healthcare goods and services, and the rate at which healthcare is consumed.
Recent data by the Department of Health and Human Services reported that in 2010, total U.S. healthcare spending was $2.6 trillion or $8,042 per person. Sixty-one percent of this money was spent on hospital care, doctors and clinics, and prescription drugs. However, the majority of the tab or seventy-two percent was covered by medical insurance. Only twelve percent or $965 was paid out-of-pocket (copayments, deductibles, coinsurance, non-covered services, etc.) by patients.
Unfortunately, we Americans have developed highly unrealistic expectations. We demand immediate and open access to the very best healthcare in terms of technology, treatment methods, prescription drugs, etc., and expect medical insurance to cover the cost, but we also want inexpensive health insurance.
Until the price or consumption of healthcare goods and services begins to decline or we are willing to pay out-of-pocket more than just an average of twelve percent, the premiums for individual medical insurance and employer-sponsored group health coverage will continue to increase.
What can you do today for inexpensive health insurance? A very popular solution to deal with rising health plan premiums is a high deductible health plan paired with a Health Saving Account (HSA). It is an excellent alternative for self employed medical insurance, including individuals and businesses looking for inexpensive health insurance. The health plan premiums are often less than a traditional PPO medical insurance plan, but the insured’s maximum out-of-pocket cost is often less too.