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September
29, 2005
Keeping
Your Health Insurance Premiums Low
Health
Savings Accounts offer tax deductions for medical
expenses, and the opportunity to set up additional
retirement accounts. But regardless of any other
positive benefit of HSAs, lower premiums are
the primary reason that thousands of Americans have
chosen Health Savings Accounts as the best way to
protect their family's health and assets. So
this month, I'd like to talk about some key suggestions
on how to keep your premiums low.
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1. Choose an HSA-qualified plan for lower rate increases.
Average
group health insurance premiums rose by 9.6% last year and
rose over 10% for each of the previous six years. Individual
plans went up even more. Yet I expect most HSA plans
to experience much lower rate increases. A very
large study was recently published showing that rate increases
over the past year for consumer-driven plans such as HSA plans
was only 3.4%. Blue Cross of Minnesota has reported
that its HSA customers spent 8% less than their traditional
insurance clients. Humana has reported claims' costs
of 4.9% for consumer-driven plans, versus a 19.2% increase
in claims for other plans. In fact, average HSA premiums
for individuals have actually dropped 19.5% during 2005.
The reason
these plans will have lower rate increases is that people
who have HSA-qualifying high-deductible health plans are likely
to pay closer attention to costs, and take better care of
their health. For instance, an HSA owner offered a statin
drug to lower her cholesterol may be more likely to request
a generic version, or ask her doctor if inexpensive nutritional
supplements such as niacin or fish oil may be a solution.
These actions save the insurance company money and should
result in lower rate increases.
2. Raise your deductible as your HSA account grows.
When you
fund your account you build up a financial "cushion"
which allows you to raise your deductible as your account
grows. Every time you raise your deductible, your premium
should go down.
By the
way, don't forget that every time you fund your account you
get an instant tax-deduction. When you offset the tax
savings against your premiums, you'll find your net cost for
an HSA plan can be very low.
The maximum
allowable contribution goes up every year with the rise of
the Consumer Price Index. Final numbers are not out
yet, but in 2006 we expect the individual contribution limit
to go up to $2,700, and the family limit to be $5,450.
So each year you can deposit greater amounts into your HSA
and continue to raise your deductible, if you choose.
3.
Stay healthy, so you can switch plans.
All health
insurance plans have rate increases, and we’ve even seen
premiums jump on some HSA plans. If a rate increase
happens to you, you can switch to a different insurance company
– but only if you pass their underwriting requirements.
If chronic disease develops, you may be stuck with your current
plan, and its accompanying rate increases, for eternity.
Or at least it may seem that long…
If you
pay attention to the pharmaceutical commercials, you learn
lifestyle really has nothing to do with disease, and it is
natural and healthy to be on many medications for the rest
of your life, which will then solve your health problems.
If you
pay attention to the science, you know the truth is quite
different. It appears lifestyle is probably 95% of the
picture, and we know the occurrence of degenerative disease
can be dramatically reduced and even prevented.
Fortunately,
I’ve found many of our customers are interested in wellness,
and disease prevention. After all, they’re paying
for their own doctor visits if they do get sick. I also
believe it is because HSA owners are “forward thinking”
people, and like to plan for their future – both financial
and physical. You can improve your odds of excellent
health with just a few key habits:
Often-times
people keep their plan much longer than they should, and end
up paying much more than they should. If your rates
go up, you should compare your plan to others that are available,
just to make sure you are getting the best value possible.
You can compare a wide variety of plans at http://www.health--savings--accounts.com/instant-quote.htm.
If you have your coverage through HSA
for America, we will do our Comprehensive
Policy Review every year or any time you get a rate increase,
in which we analyze your plan against other available plans
and give you our recommendations.
If you
do not have an HSA currently, you can find out how to choose
a plan and sign up on our “How
to” page. If you would like our assistance
in choosing and signing up for a plan, you must submit an
HSA Consultation application. Because each consultation
is a personal one-on-one conversation about your individual
needs, and because we are so busy handling new online enrollments,
we can only accept a limited number of consultation requests
each week. We will thoroughly review your application,
and if we feel like we can help you we will send you an email
to confirm your appointment. To apply for an appointment
you may call us at 866-749-2039, or fill out our online
consultation application.
If you'd
like our assistance, please give us a call at 866-749- 2039
and we'll be happy to help.
To your health and wealth,
Wiley
Long
President - HSA
for America
P.S. Next month – Minimizing Your Prescription
Drug Costs.
Subscribe to Maximize Your HSA
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