
	\| about us \| contact us \|

» Everyday Savings
» HOT TOPICS
» Jobs and Economy
» Mortgage
» Insurance
» Auto
» Loans
» Real Estate

FAST FACT

More personal telephone calls are made on Mother's Day in the USA than on any other day in any other country.

Saving Money on Healthcare

by Kathleen Seligman

In recent years, the cost of quality healthcare has risen considerably. According to the National Coalition on Health Care (NCHC), healthcare costs are rising at the fastest rate in our history, with national healthcare expenditures rising 7.9% in 2004 and totaling $1.9 trillion. Economists expect this pattern of ever-increasing healthcare costs to continue to soar and project that healthcare costs will approach $4 trillion by 2015.

Several factors contribute to healthcare’s bloated price tag:

1. Americans’ unhealthy lifestyles are leading to more and more annual hospital visits and resulting in additionally expensive ailments.

2. With rising healthcare coverage costs, employers are increasing the amount of money workers must pay out of their pocket toward their health insurance.

3. Drug companies spend billions of dollars to create the latest life-saving medicines, and then pass the cost directly on to consumers.

While these factors can seem intimidating, there are several relatively simple choices you can make that may drastically reduce the money you have to spend on healthcare. The following suggestions are designed to help you lighten the financial burden that healthcare can become and allow you to keep more of the money you earn for yourself.

When looking to save money on healthcare, many Americans automatically turn to various health insurance companies, such as Kaiser or other HMOs. Unfortunately, the rising cost of the premiums and deductibles for these healthcare insurance plans are financially challenging for many hard-working Americans. This doesn’t, however, need to spell disaster for you and your family.

One way to respond to the rising cost of healthcare is to consider a Medical or Health Savings Account (MSA/HSA). Basically a medical IRA, the MSA information website explains that these types of accounts are tax-sheltered savings accounts which are held in reserve to cover medical expenses. Deposits made in Health Savings Accounts are 100% tax-deductible for virtually everyone. Account holders can withdraw money from their HSAs to cover routine medical bills using checks or debit cards. To qualify for an HSA, you also need a low-cost, high deductible health insurance policy to pay for larger medical expenses. Fortunately, less than 20% of Americans ever incur these kinds of bills.

Also, like in an IRA, whatever money is not used each year remains in your Health Savings Account, growing interest to supplement your retirement. HSAs restore your healthcare freedom of choice as well. Unlike many HMOs and low deductible insurance plans, with Health Savings Accounts you can choose your doctor while not being bound by layers and layers of insurance company red tape.

If you aren’t quite ready for the structure of a Health Savings Account, you might consider enrolling in one of dozens of Healthcare Savings Programs. These programs do not offer health insurance policies; instead they provide access to networks of the same healthcare providers that larger insurance companies use, but at a discounted price. Such savings programs also negotiate prices of various health services on behalf of their clients, all for an affordable monthly fee. And don’t worry about any health problems you already have endangering your acceptance. No pre-exiting conditions will stand in your way, and you never have to agree to a long-term commitment.

Meanwhile, many individuals who work for companies that provide health coverage may feel that they do not need to worry about the rising costs of healthcare. Employer health insurance premiums, however, have also been rising significantly. The NCHC maintains that last year marked the fifth consecutive year where premiums rose by 9% or more. In 2005, these premiums increased by 9.2%. Along with increased premiums, employers are reducing the breadth of coverage they offer as well.

While it may be difficult to change an employer’s healthcare policy, you can combat these decisions by being as knowledgeable about them as possible. For instance, when looking for a new job, be sure to ask about its healthcare benefits. Some positions may pay less but provide you with better healthcare coverage that will be a financial boon in the long run. Researching your current health plan is also a good idea so you can be aware of any gaps in the coverage and plan accordingly.

Another way to reduce your out-of-pocket healthcare expense involves the medicines you choose to buy at the pharmacy. In order to develop the latest life-saving drugs, pharmaceutical companies spend billions of dollars in research and development. This cost is directly passed on to the consumer. After a new drug has been available for seven years, however, other companies are free to manufacture their own versions of these medicines; they are known as generic forms and are significantly less expensive than their brand name counterparts. Documenting the savings between generic and brand name medicines, the website for the Blue Cross Blue Shield of Kansas estimates that for every additional 1% of their clients who fill their prescriptions with generic drugs instead of brand name medicines, they save $1 million in coverage costs.

Finally, when it comes to reducing the cost of healthcare, an ounce of prevention truly is worth a pound (or thousands of dollars’ worth) of cure. All across the nation, experts are debating over how to control healthcare costs. While they disagree on many points, these experts have managed to concur on one solution: Americans need to start making healthier lifestyle choices. Current habits involving high-fat diets and a lack of physical activity lead to many debilitating, as well as costly, health problems such as cancer, diabetes, and heart disease. As numerous studies have proven, people who adopt healthy lifestyles are much less likely to require expensive medical care.

A healthy lifestyle is made up of several components including diet, exercise, and stress reduction. The American Dietetic Association promotes a balanced diet composed of a variety of nutrient-rich foods including plenty of antioxidant-laden fruits and vegetables, low-fat protein, whole grains, as well as mono-unsaturated fats. Regular physical activity, lasting between 20-30 minutes a day, can also reduce your risk of heart disease, stroke, high blood pressure, noninsulin-dependent diabetes, obesity, back pain, and osteoporosis. Additionally, devoting a little time for pleasure each day, as well as engaging in meditation, Tai Chi, or Yoga will help reduce your stress level.

At first glance, the notion of controlling healthcare costs may seem like a Herculean undertaking. But when you begin to break the problem down, there are actions you as an individual can take to change things for your benefit. You no longer have to be a victim to soaring healthcare costs.

print send to friend