I recently planned a vacation – a glorious road trip spanning northern California’s wine country, San Francisco, Big Sur and Los Angeles. Most of my online “legwork” was spent researching and comparing prices for rental cars. I had to pay attention to drop-off fees and parking charges, not to mention the considerable number of miles we were putting on the car. The range of car types and price points were astounding!

As much as I wanted to rent a luxurious trail-ready SUV or a fun, sporty convertible, we really couldn’t afford it. And did we need heated seats, a sunroof, or room for seven people? We certainly didn’t want to pay for these extra features we really weren’t going to use. If we had kids in tow or truly needed the amenities and conveniences of a more expensive rental, I’m sure we could have shuffled our budget around to accommodate it. So we made our way with a sensible car that got us from point A to point B to point C – and had a rate that left us some money for souvenirs!

Health insurance is similar. Many people set out, as I did with the rental car, thinking about the features of a “fully-loaded” product. But when it comes to making the purchase decision, they simply don’t need the extensive benefits and higher price tags that usually come with the more comprehensive plans.

That’s why basic benefit health plans are so popular – they’re reasonably priced with just the right amount of major medical coverage for hospitalization, Rx drugs, PPO office visits, and even preventive care. While these plans lack many of the “bells and whistles” of more comprehensive health plans, they have the important benefits that consumers need and the prices they shop around for.

The thing to keep in mind is that basic benefit plans require policyholders to cost-share (to pay additional deductibles for hospital visits and Rx drugs, for example) in exchange for low monthly premiums and essential major medical coverage when they need it. That’s kind of like paying out of pocket for gas and supplementary collision insurance on a rental car that comes standard with A/C, power windows and satellite radio, right?

I’m happy to report our road trip was a great success! We really were quite comfortable traversing the coastal highways and bustling city streets in our sensible car. (All of the natural beauty was outside the car, anyway!) Not only did we have fun, but I felt really good knowing we saved as much money as we did. If only health insurance plans came with satellite radio…

According to a new study, without any health care reform there will be a 94% for health care insurance premium by 2020. The research was done by Commonwealth Fund, a non-profit health care charity.

The research title: “Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes,” which concluded that the employer sponsored health insurance premium will increase with the current trend. In the next ten years an average family spending $12 298 on their health insurance each year will need to spend $23 841 by 2020.

However, the employers pay most of the health care insurance premiums. The employers will need to cut back in order to pay for their workers health insurance coverage. This leaves the workers to have lower earnings with no raises and reducing their retirement savings.

Keep in mind with the trade offs of lower pay, the workers will also have to contributes more money every month to their employer-based health care insurance.

The research have shown that families and employers could save $2 572 per premium for family coverage by 2020 if the health care reform could slow down the premium increase just by 1 percent in every state. If the health insurance premium can be slow at 1.5% points, there will be a saving of $3 759 per premium base on the current projections.

According to the author of the study, Cathy Shoen, the heath insurance cost is projected to double by 2020 and the low income and middle income families will face the risk of losing their health insurance plan as well as lower wages.

If the health reform reduces the increase of health insurance cost, this will help working families afford good health insurance coverage and help working class families stabilize their finances.

State Farm Health Insurance understands the variety of needs their customers have.  They have a marketing relationship with Time Insurance Company, Milwaukee, Wisconsin, (Assurance Health), which enables them to assist each individual.  This information was obtained from State Farm’s health insurance web page.

State Farm is offering individual medical insurance coverage, short term medical coverage and student select coverage.  They also have a high deductible health plan which can be used with a health savings account.  A health savings account is a special savings account which enables you to pay for health costs and save for future medical expenses tax free.  You own and control the money in your health savings account, and you also make decisions on what type of investments you participate in to make your savings grow.  This information was obtained from the US Treasury’s website on HSA’s. 

State Farm and Assurant health have combined company histories of 175 years which helps to make them a great team.  This alliance assists State Farm agents in fulfilling their customers’ unique needs and desires and manage the risks of life.

I recently was helping a friend who was considering purchasing a HSA qualified health plan. She is going into private practice after working for a number of years at a large law firm. She knows health coverage is important, but isn’t sure if a HSA makes sense.

Information about Health Savings Accounts

After helping her with a HSA quote, she found a premium savings of about $100 a month compared to a traditional major medical plan. The extra $100 she saved on premium she could use to fund her health savings account. Her tax accountant, who helped her set-up her solo practice, said that was a really smart idea because the money she invested in the HSA could be deducted from her annual income tax. Plus, the money would grow tax free.

Coming from a group plan she was also used to having dental and vision benefits. She decided not to purchase any additional coverage and simply use the money in her HSA account to pay for those qualified medical expenses when the need arises. After viewing the complete list of qualified medical expenses she realized the HSA account would pay for a lot more than just dental and vision exams.

Consumer Direct Health Care that Works

My friend feels lucky, after doing the research and having our conversation she felt comfortable with an HSA. It’s helping her stay within budget as she gets her practice up and going, yet provides her with important peace of mind.  

Want to find out if a HSA is right for you? Celtic offers a quick and interesting HSA presentation.

President Barack Obama wants a public insurance plan to compete with private carriers. Democrats in the House of Representatives want a government-run plan. Apparently so do a majority of Democrats in the Senate. However, as of now there’s enough Democrats in the Senate opposed to the idea to keep the support below the 60 votes needed to pass health care reform legislation. A compromise being considered in the Senate, however, could change the math, creating the potential government health plans will be part of the health care reform package ultimately enacted by lawmakers.

Advocates for public plans were set back when the Senate Finance Committee defeated amendments to add a government medical plan to the health care reform bill its writing. But liberals immediately pledged to keep pushing for the public option and many claim a public option is critical to meaningful reform. Whether progressives would defeat health care reform which doesn’t include a public health insurance plan is uncertain, but it is possible.

Enter Senator Tom Carper from Delaware. Senator Carper is a thoughtful moderate who voted against one of the public option amendments in the Senate Finance Committee, but voted for another. He is floating a compromise that not only may appeal to liberals, but to moderate Democrats and, conceivably, to Republican Senator Olympia Snowe, the only member of her party considered likely to support a Democratic version of health care reform.

Politico.com reports that Senator Carper proposal would give “states the option of creating a competitor to private insurers, (these competitors could be) a government plan, a network of co-ops, or a large purchasing pool modeled after the revered Federal Employees health Benefits Plan.” Unlike a compromise suggested by Senator Snowe which would create a national government-run plan only if private carriers failed to offer affordable coverage to at least 95 percent of the population, Senator Carper’s plan envision only state (and, perhaps, regional) public plans and permits states to move forward if, according to another Politico.com posting, “if affordable insurance is not widely available or the insurance market is dominated by only one or two players.” (It should be noted Senator Snowe has not sought a vote on her idea by the Senate Finance Committee)

Brian Beutler, writing on the Talking Points Memo blog, predicts Senator Carper’s idea may fail to gain support from either liberals and conservatives. He writes, “Liberal critics will charge that, while the plan doesn’t involve triggers, it does lack the heft that a plan organized at the national level would have to bargain down prices with providers” while conservatives will reject it as the first step toward a single payer system. “

Mr. Beutler may be right, but I think a compromise along the lines of Senator Carper’s proposal will gain traction. According to a second Politico.com posting, lawmakers, both public option supporters and opponents, are speaking positively about Senator Carper’s compromise.

The political reality is that there probably will not be enough votes to pass the “pure” public option desired by liberals. So they will face a choice: no government-run plan at all, a host of state-run insurance plans, or no health care reform. To reject health care reform because the public plans competing with private carriers are not controlled by the federal government is a political argument few liberals will want to make.

At the same time moderate Democrats may see the compromise as a way to push the entire public plan controversy to the states. This would allow them to escape the intense pressure they are under from party activists (and, perhaps soon, the White House) without personally voting for a government-run plan. State’s rights are usually championed by moderates and conservatives. It is certainly reasonable for a lawmaker to conclude that the public option is an appropriate decision for states and not the federal government. It is interesting to note that one of the three Democrats on the Senate Finance Committee to vote against both attempts to add a public option, Senator Kent Conrad described Senator Carper’s plan as a “very constructive option,” according to Politico.

What the effort to construct a workable public health insurance option overlooks is that it is virtually impossible to create a government-run plan that will both lower medical costs and compete fairly with the private marketplace. A public plan can lower health care spending only by imposing (not negotiating) low reimbursement rates on doctors and hospitals, most likely by tying them to other government programs such as Medicare. (It is important to note that Medicare often pays providers less than their actual costs). But imposing rates, something only monopolies and governments can do, is unfair competition (which is why we have laws against monopolies). But a public plan that merely negotiates rates with doctors and hospitals like any other health plan does is unlikely to be effective in reducing costs.

I’ve long predicted the health care reform legislation eventually enacted this year will not include a government-run health plan. Now, however, I have to recognize the possibility that a compromise along the lines of those proposed by Senator Carper or Senator Snowe might make it into the final package. It’s far from certain, but it is a possibility.