Archive for October 2012

How are American’s being affected by health care cost while being under employed or unemployed

The recession has taken its toll on Americans, and health care costs continue to plague underemployed and unemployed individuals. People who are employed and about to retire also see that their economic security is at greater risk than before because health care costs are rapidly increasing.

What is the impact of health care cost on workers? 

Employers are usually the ones who fund employees’ health benefits. However, health care costs are taken from the total amount of compensation paid to them. Due to the fact that health care costs continue to rise, employers have begun to remove some elements included in worker’s compensation. This includes retirement benefits and cash wages. Employers may also require higher health premium contributions from workers. Worse yet, employers will stop giving health benefit or only select a few workers who will qualify for benefits. In some cases, people who are employed by small businesses are not provided with insurance.

How about those who are underemployed?

Workers who are underemployed but still face the same health premium increases may give up their health benefits because they can no longer afford the coverage. In turn, they will be exposed to greater risk. Based on the study that National Nurses United released, almost half of underemployed and unemployed Americans do not have access to health insurance, and about 56 percent skip check-ups due to cost concerns. This leads to delayed medical care.

There were 1,500 participants in this study including 300 part-time workers, 757 full-time employees and 413 unemployed individuals. One of the reasons why respondents delay medical care is because they cannot afford it in the first place. Based on the survey, about 63 percent skipped medical checkups and dental care, 46 percent skipped test recommendations as part of a treatment process, 40 percent did not buy medications the doctors required and 18 percent admitted they had problems receiving appropriate services for mental health. This is why underemployed U.S. citizens are more likely to carry a life-long financial burden due to major illnesses.

Why health care costs also affect unemployed individuals?

Once individuals are unemployed, they often automatically lose their health coverage as well. It is difficult for unemployed people to cope with the loss of health insurance. The lack of it can cause a lot of problems. Unemployed individuals forgo medical care because they cannot afford the cost for checkups and hospitalization. Although it is possible to receive medical care even when not insured, Americans often need to pay thousands of dollars for their medical expenses.

Why do health care costs continue to rise?

• Technology 

Advancing medical technology can cause health care costs to rise. This is because a vast range of new innovations have already been introduced to improve medical procedures and diagnostic tests. These modern advances pave the way for introducing new forms of treatment that either shorten medical procedures or replace the usual treatment methods.

• Increased Demand for Services

The pressure is on the health care system due to the increased number of people in need of service. The growth of people over 50 that require health care also involves additional services from nurses, health care providers and physicians. This is to ensure that health care and medical facilities are keeping up with the demands.

• Prescription Drugs

The cost of prescription drugs has also dramatically increased. The frequency of use also affects the cost of health care these days. There are three factors that influence the cost of prescription drugs. These are price inflation, sudden switches to using more expensive drugs and more drugs being prescribed.

• Income

Even the rise in personal income can lead to an increase in health care costs. This is due to the fact that people see to it that their health is not compromised as they improve their quality of life. As a result, they spend on things that extend their life.

What needs to be done to control rising health care costs?

• The request for additional health care systems needs to be carefully evaluated.

• Efforts need to be simplified as much as possible.

• Medical malpractice lawsuits should have reasonable limits.

• State government programs also need to make sure that full funding is available to people.

What are the options available to unemployed individuals?

There are a number of options available for people who have lost their health insurance due to unemployment. People often get health coverage from their spouse’s employer. There are also individuals who may be qualified for Medicaid when they lose their insurance due to work policies. There are also some states that provide other alternatives for people who have unintentionally lost their health care insurance.

The Power to Make Choices: Benefits of an HSA

Health savings accounts (HSAs) operate like personal savings accounts. Money put into an HSA can only be used for health care costs. The individual has total control over the amount of money in the account; they choose how much to save, when to deposit money, and whether or not to use that money. The owner of the account can invest the money in bonds, stocks, or mutual funds. The money put into an HSA is not taxed as long as it is not withdrawn from the account for anything other than medical expenses. For a person to be eligible to open an HSA, he or she must have a high-deductible insurance plan, to provide coverage should there be a need for extensive health care.

HSAs were created in 2003 as a way to give more options and control to the individual. This is called consumer-driven or consumer-directed health care. HSAs were also theorized to keep health care costs down. The logic is that if individuals are spending their own money, they will use health care more wisely and conscientiously. It was also said to make the market more competitive and lower the rates set by health care providers. The IRS determines the limits on how much money can be contributed to an HSA. In recent years, the limits have been around $3,000 for individuals and $6,000 for the average family.

HSAs have several advantages. They give more control to the individual and they help prepare for the future. Because the money is not based on the current state of an insurance plan, there is no way the individual will not be able to access his or her healthcare savings. Especially for younger people who are healthy, HSAs allow them to save money that they would otherwise be giving to an insurance plan, without any “return” on the monthly premiums when they do not need health care. Then when they are older, they will have a safety net for medical costs.

Another advantage to HSAs is cost-effectiveness. The money a person contributes to their account is not taxed. This again makes it advantageous to younger people who generally have less tax exemptions and deductions. It allows them to “keep” a greater portion of their income. At some point in almost everyone’s life, health care expenses will be incurred. From a long-term perspective, money in an HSA account means less money has been paid in taxes.

Finally, employers can contribute to their employees’ HSA plan. Due to tax regulations, the employer will generally contribute via a cafeteria plan, which may include set contributions or matching contributions. Having a second party add funds to an HRA account means more money that the individual decides how to spend, as opposed to employer-purchased insurance, where payment decisions are made by the insurance company.

An HSA can be opened through a bank or through an employer using the HSA option. To open an HSA, a person must be under the age of 65 and have a high-deductible insurance plan. Individuals with HSAs must use high-deductible plans as their only form of health insurance (vision, long-term care, disability, and dental plans are permitted).

A high-deductible plan has advantages as well. The premiums for this type of plan are low because the deductible paid when health care is rendered is higher than normal plans. By using an HSA in conjunction with a high-deductible plan, a person is in control of their health care spending while protected should something catastrophic happen. For instance, an emergency room visit for a broken bone would generally be paid for entirely by the policy holder because the cost would not be high enough to exceed the deductible. This deductible would then be paid using the HSA account. If extensive health care was needed, the deductible would be exceeded and insurance would cover some of the costs. Some high-deductible insurance plans cover some preventative procedures, such as pap smears, before the deductible is met, making the HSA/high-deductible combination plan even more advantageous.

In conclusion, there are many benefits to having an HSA plan. They offer control over healthcare spending, untaxed investment opportunity, and greater decision-making power for the individual. Because they are used in combination with a high-deductible insurance plan, there is still a safety net should something catastrophic happen. Health care savings account are popular among young professionals because they help them save for future expenses while taking advantage of tax breaks. HSAs allow people to have power over how much money they save for health care and how that money is spent.

2012 Changes to Federal Health Care

2012 Changes to Federal Health Care

The U.S. federal health care system saw significant changes this year. This includes benefits added to existing federal mandates like the Affordable Care Act. On the other hand, some benefits were newly announced as federal laws this year. Although there are still a few debates on some of the changes, these benefits give more health care assistance to U.S. citizens. Changes to the federal health care system in 2012 include the following.

Affordable Care Act

In 2012, the U.S. Supreme Court upheld the federal Affordable Care Act. There were a few changes in the act that became effective on January 1, 2012. The value of each employee’s healthcare benefits must be disclosed by their employer. This requirement was originally to take effect on January 1, 2011, but it was postponed by the IRS in 2010. The act requires Readmissions Reductions programs to be implemented. The Centers for Medicare and Medicaid Services or CMS will reduce payments to IPPS hospitals beginning on October 1, 2012. These healthcare facilities should minimize readmissions or they will be penalized. Approximately 2,217 healthcare facilities are expected to receive penalty with over 307 of them receiving maximum penalty.

Employee and Company Benefits from the Affordable Care Act

The act aims to target the increase of insurance coverage while decreasing healthcare spending. Staring August 1, 2012, all new healthcare plans must include preventive services like mammograms and colonoscopies without charging the employee deductible, coinsurance or co-pay. This will drastically expand insurance coverage to almost all Americans and will change how Medicare takes care of healthcare issues. Through this, the federal government will play a significant role in the nation’s healthcare policies. All residents are also required to purchase medical insurance to avoid healthy individuals from waiting to get sick before getting insurance. Those who will not adhere will pay a penalty of 2.5 percent of the total household income or $695 for each person in the household, whichever is higher. The act authorized each state to provide insurance exchanges for those who don’t have insurance plans. These people can purchase insurance under four categories depending on the coverage they need.

The Affordable Care Act is also good for companies including food service providers such as restaurants and fast food chains. The employees’ added healthcare benefits mean paid sick leaves and preventive measures like tests. Employees who are sick won’t be a threat to other employees and to the consumers. This results to cleaner and hygienic practices in eateries. The act will also result to healthier and happier employees in any business setting. Women’s preventive services are also included in the revised act. Added services in the insurance plans include well-woman visits, pregnancy-induced diabetes Screening, HPV and HIV testing and counseling, STI counseling, contraceptive techniques and counseling, domestic violence counseling and breastfeeding support and counseling. The act also helps in preventing insurance coverage denial caused from pre-existing conditions and bans active policy cancelation.

Health and Human Services or Contraceptive Mandate

The Contraceptive Mandate is a federal law that calls for health insurance companies and employers to provide health insurance plans that include contraception. Although a number of U.S. states already have such laws, the Obama administration proposed a federal mandate for all states starting August 1, 2012. This mandate gave exemptions to church organizations. However, affiliated nonprofit corporations such as hospitals are not exempt.

This mandate was announced on January 20, 2012. It requires all healthcare plans to include contraceptives at no additional cost for employees. Sterilization coverage is also included in the federal mandate. The contraceptives allowed in the coverage are those approved by the Food and Drug Administration as follows.

• Male Condom
• Female Condom
• Diaphragm with Spermicide
• Sponge with Spermicide
• Cervical Cap with Spermicide
• Spermicide Alone
• Oral Contraceptives that are Progestin-only or The Minipill
• Combined Oral Contraceptives on Extended or Continuous Use like Estrogen and Progestin or The Pill
• Estrogen and Progestin Patch
• Vaginal Contraceptive Ring with Estrogen and Progestin
• DMPA shot or injection with Progestin
• The Morning After Pill or other Emergency Contraceptives
• Copper IUD
• IUD with Progestin
• Implantable Rod with Progestin

Debates and Arguments on the HHS or Contraceptive Mandate

There have been a number of arguments regarding this mandate including those from church leaders despite its religious exemptions. At present, there are around 30 lawsuits against the mandate based on religious grounds. These lawsuits comes from different institutions including churches, charities and universities. However, the contraceptive mandate has no rule over the woman’s right to have an abortion. It only gives women the freedom to choose among a variety of contraception techniques.