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health as it happens

Rising Health Insurance Costs

Jul 22, 2021

With health care reform is moving ahead and the implementation scheduled to start in January 2021, rising health insurance costs could prove to be a reality for many in the coming year. Health insurance premiums are increasing across the board in the United States and other first world countries, as well. Although this is good news for some, it could bring rising health insurance costs for others. Many people would like to escape rising health insurance costs and find affordable and high quality health insurance coverage. One easy way to find health insurance coverage that could give you peace of mind and lower health insurance premiums is to seek out a doctor that works overseas.

Cost Problems

As more people have sought employment in the United States, rising health insurance costs have become a problem for many. Even if they continue to work with their current employer policy, they may still face serious health care problems as their company continues to shift them off to part-time workers, especially through rising health insurance costs. Employers, faced with rising health insurance costs and struggling themselves with employee lawsuits, have continued to change them off to full-time employees, especially through spikes in out-of-pocket compensation which result from higher deductibles and fewer benefits. As a direct result of these changes, people may not be getting as much compensation as they were used to or the level of compensation they deserve.

What makes things different when it comes to rising health insurance costs? The simple answer is that people are living longer. Years ago, the average life expectancy in the United States was around 70 years of age. Now, the average expectancy is closer to that of France, Canada, Germany, Italy, and Japan.

Providers

Rising health care costs are also a result of changes in the market concentration of health care providers. The trend to provide more services through specialty hospitals and physician offices has increased dramatically over the last 20 years. Specialty hospitals are able to deliver advanced health care at lower costs because they can control their prices through specialization. Conversely, primary care physicians and emergency room doctors have traditionally provided lower quality and lower priced services than more specialized hospitals. As a result, the two sides have been forced to compete for business as service tiers increase.

Competition

In order to keep up with the competition, some providers are re-defining their services to keep up with the increased demands. This new focus on value drives providers to provide better care at less cost. The result is that patients get the care that they need at a lower cost as well as the opportunity to choose a specialist doctor to suit their individual needs. While this is good for the doctor and the patient, it is also good for the U.S. health care system which can benefit by allowing the system to expand services available to more people while creating more efficient primary care physicians.

Deductibles

One way that employers can help control health care costs is by increasing deductibles and offering other forms of assistance to their employees. Many workers have very high deductibles and aren't able to afford much out of pocket unless it is mandated by their employer. Providers must work hard to convince these workers to take advantage of the programs. If they don't, the premiums will naturally go up. If premiums go up, the employers may have to cut back on other things or they might lose some of their labor thus resulting in fewer benefits.

Premiums

Two-thirds of the total cost of health insurance comes from premiums, so the employer is going to want to make sure that they have managed their costs effectively. One way to do this is to make sure that all workers are eligible for the group policy. Some of them might not qualify yet, and a better strategy would be to make it so that those who do qualify to get a better price break. A better policy might result in two-thirds reduction in premiums as opposed to one-third reduction if you only offered health insurance to non-contributory employees. You also have to check the regulations of your state so that you don't violate any of them.

Compensation

One way that you can lower health insurance costs is by improving your employee's compensation package. It is better to pay for actual performance rather than pay for an entire year's worth of benefits every year. For this one, you should focus on the administrative costs like payroll taxes, insurance premiums, and coding and certification fees. You can always add on some of the cost saving measures above to cover for these expenses, but you'll never get a bigger payback than when you pay for performance.