Since health care is privatized in the US, people spend an enormous amount of money on obtaining quality health care services. This article aims to introduce the reader to affordable health insurance choices, that may help reduce the cost of health care.
With the passage of time, people are finding it exceedingly difficult to spend on health care. Considering that people spend almost a third of what they earn on procuring medical services, it is not surprising that they welcome the Health Care Reform plan proposed by the Obama administration. The plan intends to subsidize the cost of health care without compromising on quality. Hospitals that have been persuaded to cut back on their Medicare payments have reduced their expenditure by $155 billion. Similarly, pharmaceutical companies have also agreed to cut drug costs by $80 billion. Until the government-run health insurance plan is enforced, private insurance is the way to go.
Under temporary coverage, we have COBRA and Temporary Health Insurance Plans.
COBRA (Premiums Reduced by 65%): Under COBRA (Consolidated Omnibus Budget Reconciliation Act), a person is allowed to continue on the former employer’s group health insurance plan, after getting laid off, for a period of 18 months. The American Recovery and Reinvestment Act of 2009, has resulted in a 65 percent reduction in COBRA premiums for a period of 9 months, starting February 17, 2009. Eligible individuals are required to pay only 35% of their COBRA premiums while the remaining is reimbursed to the insurance companies through tax credits. Previously, the laid-off employee had to pay the entire amount of premium. This premium reduction facility is available for people covered under COBRA, between September 1, 2008 and December 31, 2009, in order to compensate for involuntary termination of employment that occurred during the aforementioned period.
Temporary Health Insurance: Temporary health insurance is an indemnity plan that provides the benefits of traditional health coverage at a cheaper cost. The coverage is of transitory nature, and a person is covered for a maximum period of 6 months without having to undergo too many procedural formalities. Although preventive, routine, dental, and optical care are not included in this policy, it’s better than not having any insurance.
Under permanent coverage, we have the employer’s Group Health Insurance plan, employee owned Health Savings Account, and State Risk Pools. Both Health Savings Account and Group Health Insurance plan result in reducing the premium payments that have to be made by the employees, and can be extended to cover the family. Hence, they are better alternatives to individual health insurance plans.
Health Savings Account (HSA): People who are working for small employers who cannot afford to provide group health insurance, may be provided the option of employee owned Health Savings Account (HSA) by the employer. The employer has the right to determine the amount of money that would be contributed by him/her towards providing health care benefits to the employees. The contribution is exempt from payroll taxes, and it accumulates and earns tax-free interest.
Group Health Insurance In this case, the employer, who is the policy holder, pays a part or the entire amount of premium, which is fully tax deductible. Lower premium for employees, additional coverage at a cheaper cost, coverage for pre-existing conditions, and premiums that are not a part of the employee’s taxable compensation, are some of the benefits of employer based Group Health Insurance.
State Risk Pool: State risk pools were created to provide health insurance to people who do not qualify for private insurance. Disqualification can be as a result of pre-existing conditions or health problems that force people to pay an exorbitant premium in order to seek insurance.
Just as affordable health insurance helps people seek affordable medical treatment, dental discount plans may be a good option for people desirous of ensuring good dental health. These plans, that are an alternative to dental insurance, cover a person regardless of the claims history. There is no need for prior authorization, irrespective of the procedure. It is a simple case of a group of people tying up with a few local dentists to avail dental health care services at discounted rates. This is again a good example of collective bargaining power at work.