Thursday, November 15, 2007

Health Insurance Costs

Every year my company has an open enrollment period when all employees can make changes to their health insurance plans. It is no secret insurance costs are rising at astronomical rates, but every year I notice not only the premiums going up, but the amount out of pocket for services also rising. I work for a major health care system and they pay a large portion of the premiums for each employee.

The shift seems to be for the patient to foot more of the bill. For example, we used to have a flat copay for an inpatient visit to the hospital. Now we pay a percentage of the bill based on the insurance plan picked. One plan requires you pay 10% out of pocket the other 20% where the annual cost is higher for the 10% plan. This could amount to thousands of dollars for a major surgery and lengthy hospital stay!

My company also has a FSA for health care costs, where one designates how much they want to go into the account at the beginning of the year. A debit card is issued to use for any health care related costs not covered by insurance. The money is deducted from the paycheck tax free weekly or biweekly, based on how you are paid. This is truly a good service, but if there is money left in the account at the end of the year it is forfeited. So you would only want to select an amount you are almost sure you will spend for the year.

Even with skyrocketing health insurance costs I feel very fortunate to have health insurance. No one ever expects to get sick, but that's why we are insured to protect against a catastrophic event. I personally know some people that don't have it and it has devastated them when a huge hospital bill came in the mail. One family I know had to sell a property they owned to pay the bill.

I don't know what the future holds when it comes to paying for health care, but for now it looks like the consumer is going to have to have deep pockets if they get sick.

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