Healthcare costs are rising. We read about it everyday in the paper and can hear about it on the news. Most of us have seen our own healthcare benefits changing. Costs are being shifted to the employees by way of increasing health insurance premiums, deductibles and copayments for medication and doctor visits.
Why is this happening? Let us try to answer some of these important questions. By working together to understand healthcare today you can keep your healthcare affordable to you and ensure that your employer can afford to offer benefits in the future.
Understanding your Health Insurance
Traditionally, insurance was used as protection against catastrophic loss caused by accidents or serious medical conditions. Now the expectation is that health insurance will cover everything from doctor visits to hospitalizations.
There are many different types of health insurance:
- Indemnity plans – also known as fee-for-service. Traditional provider reimbursement in which the provider is paid according to the service performed.
- Preferred Provider Organization (PPO) – a managed care organization that uses networks of providers. Covered individuals retain the freedom of choice of providers but are given financial incentives (i.e. lower out of pocket costs) to use the preferred provider network.
- Point of Service (POS) – In the POS model, the patient can receive care from physicians who do or do not contract with the HMO. Physicians not contracting with the HMO but who see an HMO patient are paid according to the services performed. The patient is incentivized to utilize contracted network providers through the comprehensive coverage offerings.
- Open Access plan – Open-access arrangements allow members to see participating providers, usually specialists, without referral from the health plan’s gatekeeper.
Rising healthcare costs affect everyone - hospitals, doctors, employers, insurance companies and ultimately you the consumer. Until recently, many of us assumed it was our employers’ responsibility to provide insurance coverage for us. The employer shielded us from how expensive health care had gotten by providing us insurance with little or sometimes no premium increases each year. But, times are changing.
Modern medicine has changed as technology has advanced. People are living longer. As consumers we have higher expectations about our healthcare and what we think should be covered by insurance companies, but did we ever stop to think about who would pay the cost?
How your premium dollar is spent…
Health insurance premiums are developed by projecting the amount paid for past claims into the future to determine amounts for expected claims. These premiums must be high enough to cover expected costs, but low enough to be affordable and competitive. Projecting amounts for expected claims includes reviewing the following:
- Cost of benefits used by members
- Type of health care used (inpatient, outpatient, prescription drug, etc)
- Administrative costs
- Adequate reserves to pay future claims
- Legal mandates and regulations
- Quality accreditation costs
Premium increases affect everyone – even those people who don’t use their benefits as often.
What can you do to help control my insurance premium increases?
- Know your benefits. Do you know what is covered and non-covered by your insurance company? What is your deductible? Co-insurance? Office visit copay? Call your insurance company before a procedure so that you know before your appointment how it will be covered.
- Be drug smart. Talk to your doctor or pharmacist about what generics are available for the drugs that you are currently prescribed. When trying a new drug, ask your doctor for samples. Know your health insurance company’s formulary or know where to access the information.
- Make wise lifestyle choices. Eat a healthy, well-balanced diet. Exercise for 30 minutes on most days of the week. Drink water. Get enough sleep at night. Wash your hands often. Talk to your doctor if you have questions. Start Walking!
- Practice prevention. Communicate with your doctor. Follow his/her instructions. Get your preventive exams. Wash your hands. Get a flu shot.
- Take an active role in your care. When switching doctors, call to have your medical records transferred to the new clinic. This can eliminate the need to duplicate testing that perhaps has already been done. It also establishes a medical history for your new doctor. YOU are in charge of your body – treat it well.
- Know your health risks. What diseases and conditions are you at risk for? Can you do anything about it? What preventive activities can you do to prevent health risks?
- Be cost conscious. How much does your doctor charge for an office visit? What is your deductible? Do you know what your copay is for medications? Know when to seek services and where. Use the acute care instead of the ER, unless it’s an emergency. You can call your doctor, even after hours, if you have a question about where to seek care. Clinics have an answering service for such questions.
- Use the health care system wisely.
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