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Watch Out For New Health Coverage Programs To Offered By Your Employer for 2008

By Erik Folgate

A new year always brings new decisions about your family’s future. One of those decisions is your health care coverage offered by your employer. With the onset of rising health care costs, employers are beginning to mix up the available plans offered to accommodate individuals in all types of situations. Yahoo Finance wrote a great article about what to watch out for with new health care coverage plans. Picking the right health care plan can be a daunting task. Here are some of the things listed in the article that you should look out for when thinking about switching plans or when your employer switches plans for you.

— Fully funding preventive care benefits such as immunizations, flu shot clinics and age-appropriate cancer screenings.

— Offering plans with lower contribution requirements and fewer covered benefits to encourage lower-wage workers to stay insured.

— Promoting nurse advice lines, health coaching and disease management programs.

— Offering “consumer-driven” health plans that typically have high deductibles and encourage workers to be more price-sensitive.

My company switched us to a “consumer-driven” health plan for 2007. I am required to pay half of my $3,000 yearly deductible, and then my coverage kicks in 100%. My company helps fund half of my deductible, and they roll over the amount that I don’t use to the next year. So, it’s kind of like an HSA account, but I don’t fund it. My company contributes to it every year. I would not have chosen this plan if I had the choice. I would have stuck with a PPO, because my financial situation benefits me to pay a higher premium and a lower deductible. It would be tough for me to front $1,500 if something catastrophic occurred. However, some people can afford a higher deductible in order to save on the premium. This is a great quote from the article.

“You should only pay to insure the risk you can’t bear,” he said. “If you’re paying for risk you can bear, I would suggest you’re paying for something you don’t need.”

This is a wise statement. You will always save money on insurance if you apply this saying when you buy an insurance product. Don’t get a higher deductible, if it’s going to put a huge financial strain on you. But in the same respect, don’t have a couple hundred thousand dollars sitting in the bank and continue to pay the highest premium possible. It just doesn’t make sense. Insurance is meant to cover the financial risk that you cannot bear.

Read the whole article. It’s got some great advice in there about choosing your health care program and also identifying the hidden aspects of new programs that employers force upon you.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • http://www.outofpocket.com Mona Lori

    Many consumers transitioning from a first-dollar coverage plan to a consumer-driven plan with a high-deductible approach this with uncertainty. I believe consumers should take personal responsibility for their own health and included with this responsibility is making more informed choices about price and quality. I am a big fan of free-market health care solutions. In fact, when I shop for vacations, cars, electronics, hotels, and large appliances – I always research consumer recommendations. More competition and more consumer-choices will help drive down prices, encourage innovation, and improve the quality. Unfortunately, consumers do NOT have access to relevant tools that are necessary to help them make informed, cost-effective choices for finding the best value (quality and cost) for common health care services. There’s plenty of health care content out there, but no meaningful tools consumers can use to lookup costs for routine health care services, so I have started a grassroots initiative that relies on social networking to help consumers find the best value for routine health care services. The project is called, OutOfPocket.com, and includes a directory of true prices for common health care services based on actual visits by individual consumers. The website invites everyone to contribute, including the insured and insured, by anonymously posting prices they paid for routine health care services (such as MRIs, mammograms, x-rays, CT scans, vaccinations, office visits, dental and vision), along with their personal recommendations on the provider.

    This project benefits all consumers without having to wait for legislation to pass, complicated programs to be initiated, or waiting for the country to decide how to reform our health care system. The site was launched last month and everyone is encouraged to participate. If enough consumers participate to share prices – consumers will have created a powerful tool to help make informed healthcare purchasing decisions and everyone benefits by exposing health care prices. Consumers save money by shopping for the best value and eliminating wasteful spending on overpriced services with poor performance. Taking responsibility for your own health requires access to information and meaningful tools. Be Healthy. Mona Lori, Principal, OutOfPocket.com

  • author

    I am all for consumer driven health care. I think that we need to take responsibility for our own health and the health care system mess. Only WE can help control the cost of health care by being responsible with our coverage. This means only going to the doctor when we truly need to, and undergoing testing only when necessary. A high deductible allows us to take on some of the responsibility of health care so that we do not abuse the system.

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