Introduction

Concerns over our healthcare delivery system are certainly not new. The FDR Administration looked at “universal health insurance” during the Depression. The Truman and Johnson Administrations also visited the topic. Former President Bill Clinton won election in 1992 with the pledge to solve our national economic crisis by solving the healthcare predicament. ¹ Hilary Clinton brought national attention to the inform as First Lady, valiantly attempting to offer solutions but getting defeated by special interests and “the Bureaucracy.” Now, with the looming Presidential election, concern has become even more heightened. Over these past 15+ years, we are no closer to a solution while healthcare spending is expected to reach 20% of GDP by 2016. ²

The first problem with healthcare is that there are too many problems. No matter what “solution” is offered, there is always someone to disagree and point to something else. “The scrape is Federal and State mandates.” “No, the problem is the third-party payor system.” “No, the problem is the lack of consumerism.” “No, the problem is uncapped jury awards and malpractice insurance costs.” “No, the problem is the 40 million+ uninsureds.” So you see, the first thing that needs to happen is that everyone must agree that “all of the above” is the correct answer! I also understand that many people are “positioning and posturing,” while others are legitimately concerned about their future. We need to agree to find the compromise solution and put aside our individual agendas.

There is itsy-bitsy doubt that the current system is unsustainable. Premium costs continue to increase while benefits and services seem to decline. Just over the past five years, premiums have increased 57% to $5,646 per employee, ³ which now represents almost 32% of employers’ total payroll. Healthcare costs have outpaced inflation for some time now (see supporting chart), and a current Journey Poll identified these increases as the number one financial concern among American families. ⁴ It is also important to imprint that this increasing cost has a direct impact on the increasing number of uninsureds. ⁵
At the same time, medical spending as a percent of Gross Domestic Product continues to increase. When Congress created Medicare in 1965, the estimated cost for 1990 was $9 Billion! The Heritage Institute recently projected Medicare/Medicaid entitlements to advance 11.1% of GDP in 2006 and rise to $2 Trillion by 2030! ⁶

To further complicate the bellow, consumers are unaware of the true costs of care, expect only the best in treatments, and complain about any increase in their shared cost. Recent news headlines decried the reduction or elimination of retiree health benefits for major corporations. The major unions fight an ongoing battle over increased cost-sharing for their members, and Wal-Mart recently fought a public relations battle over the availability of healthcare for its many seasonal, part-time, and transient workers. Every day brings new issues and debate.

The second problem hindering valid reform is that everyone has an “agenda.” Since healthcare affects everyone, everyone needs to agree to some compromise. Doctors need to accept some reduction in pay in return for jury-award caps. Insurance brokers and agents need to accept a shift in revenue sources for medical coverage (fees vs. commission). Insurance and Pharmaceutical companies need to agree to compete in a novel environment. Consumers need to agree to more cost-sharing and become more active in care decisions.

I understand that many will feel that it is naïve to think that such a consensus could ever be achieved. But I say to those people that we are reaching a point where there will be no alternative. Thomas Edison was fond of saying that “Nothing is impossible. – The impossible fair takes longer.” As long as we respect each other’s interests in this debate, and enter the fray with a sincere desire to achieve a long-term solution, what I am proposing herein is truly achievable.

First, let’s understand the cost-drivers.

What Drives Healthcare Cost Increases?

Utilization & Consumer Demand

American employers have offered medical coverage to their workers for quite some time now. In the past, Conventional Health Plans had a improper deductible, e.g. $100 or $250, and 100% coverage thereafter. As costs began to rise in the late 1960’s and early 1970s, employers were forced to initiate introducing “cost-sharing” through HMOs, PPOs, and other similar plan models. However, by then consumers had become accustomed to great care with minimal out-of-pocket expense, and we are still paying for that precedent.

As a result, utilization has increased significantly, and consumers, particularly unions, continue to inquire the best care with the least cost-sharing. The biggest problem with this approach is that consumers fail to develop an idea of the true cost of their care. They go to the doctor, pay a $10 co-pay, and walk out thinking that their visit’s cost was $10!

A second problem is that, because consumers do not know or care about the true cost, they do not “shop” for the best values. This results in high utilization costs and in many cases unnecessary spending. Over the past 15 years, this scrape has been increasingly addressed, most recently by the introduction of the “Consumer-Directed” healthcare models. Conventional Plans have fallen to 3% of the total plans offered in 2006, simply because they are no longer affordable. ⁷ This go toward greater cost-sharing and consumerism, which will be addressed in more detail later, is a move in the right direction but has failed to solve the broader problems.

Technology & Medical Advances

In order to deliver the best possible care, providers need to keep up with technological advancements. Over the past 20-25 years, these advancements have come very rapidly and at an increasingly higher cost. This is not expected to change and is generally considered as part of the “cost of doing business.” However, we need to also examine that other industries also face rising technology costs and do not experience the higher-than-inflation cost increases seen in the healthcare market. Thus, this is clearly only a contributing factor.

Aging Population

As the general population ages, with Baby Boomers now facing retirement, utilization increases. This is also generally accepted. Some studies have posited that 80% of our total healthcare costs are driven by 15% of our population. ⁸ This too has become a generally celebrated fact, i.e., that our aging population will continue to require more care.

Federal and State Mandates

As a former Benefits Consultant, I straddle both sides of this fence. Many mandates are necessary and do indeed provide care where none would otherwise exist. However, over the past 20 years, many mandates have been introduced at the urging of various groups which have added to the cost of care. This problem has been further complicated by the many Space mandates that exist. As of the end of 2005, there were 1,824 state mandates nationwide! In many ways, this accounts for part of the reason coverage might cost under $2,500 in Iowa or Wyoming and over $6,000 in New Jersey.

Inflation (CPI)

Another driver of cost is inflation. Little can be done to change this. As the costs of materials and labor increase, providers must also increase fees. So inflation will remain a part of the cost.

Litigation & Malpractice

Medical providers walk into situations every day that involve split-second decisions affecting their patient’s very survival. Sometimes, mistakes happen. The unusual case inspiring a celebrity’s infant children receiving the wrong medication is a perfect example. The manufacturer of the medication in question used blue labeling for both the 10mg and 10,000mg bottles, with miniature incompatibility in font size. The only difference between the two bottles was that the 10mg bottle used a lighter shade of blue.

Is this actionable? Against whom? The manufacturer, or the pharmaceutical administrator at the hospital that dispensed the wrong medication? Perhaps the nurse that administered the medication without noticing the dosage level? Or the hospital itself? The reality in today’s litigious society is that everyone will get sued. Perhaps, some deserve to be. But the “rush to sue” is the root dilemma here. Not all mistakes are, or should be, actionable.

That said, calls by various lobbies for laws restricting one’s “suitable to sue” are misguided. There needs to be an injection of “reasonableness;” however, everyone should have the right to seek redress if warranted by the details.

What if I now told you that this same mistake was made before, at another hospital in Indiana? Following that mistake, which seriously threatened three infants and cost the lives of three others, the manufacturer failed to recall the existing stock of drugs. Nor did they issue a request to existing known buyers of these drugs to post warnings advance the bottles or to segregate existing stock. All they did was add a red warning mark to new stock. Does action against the manufacturer now seem more actionable???

My point here is that in every instance there will be a point at which, when crossed, the “mistake” becomes actionable “negligence.” What is needed in our healthcare system is a law mandating a process to flesh this out before cases can move to the courts.

Pharmaceutical R&D

This leads to a major cost driver – the high costs of medication. No one can argue that the use of medication should be controlled by anyone other than the doctor. And the availability of medication choice is one reason why America enjoys some of the best care on the planet.

So what is the problem? Why must Americans pay $115 per pill for a drug available from Canada for $40?

I glean as fact that pharmaceutical companies need to invest significant sums into R&D in order to bring a drug to market. I also accept as fact that these companies deserve to be reimbursed for this expense through the sale of the drug. The problem, as I see it, is in the lack of oversight in establishing this R&D cost and/or the fair market price for the drug. When a pharmaceutical company claims that it had to spend $2 billion dollars in R&D, who is there to verify this? Who is there to ask for the financial records to prove the claim? This may cry out for increased funding and help for the FDA, perhaps increasing the bureaucracy that will support our new system. But it is imperative to success that we assume the restrictions to fair competition that currently exist in regard to pharmaceuticals and stop allowing these companies to charge “whatever the market will bear.”

It should be recognized here that the FDA does perform an important function. Recent contamination discovered in the drug Heparin, manufactured in China for Baxter International in a depart to increase profits (they didn’t lower their price!) illustrates the need for greater oversight. However, this contamination occurred because the FDA did not have sufficient funding to inspect the plant in China or the drugs that it imported. If we are to allow for originate competition and the importation of drugs, we must also allow for the FDA to grow sufficiently in manpower and funding to protect the American public as they have done in the past.

Federal & State Regulation

The sad fact is that, without some regulation, many providers would simply take advantage of consumers. Greed exists, and it is silly to pretend that it does not. Without regulation, scam artists and disreputable practitioners would be free to “take whatever they could get.”

However, after over 50 years of regulation, there are many regulations that should now be removed or relaxed. This includes many of the filing, licensing, and manufacturing regulations that permeate all aspects of the current system. When multiple participants must increase costs in order to offset these regulations, healthcare costs increase exponentially. A simplified regulatory environment would go far to removing this problem.

National licensing of insurance companies, brokers, and agents would allow centralized and standardized regulation while opening competition across state lines. Simplifying FDA regulations in bringing a drug to market would back ease R&D costs. Removing restrictions on buying drugs from non-domestic sources would help competition and drive down drug costs. I am certain that the FDA can find some way to guarantee quality and collected allow such imports with proper funding.

These are just a few examples of how Federal and State regulation can be addressed. The debate that I hope will reach from this article can certainly flesh out more.

Fraud & Abuse

This is an yell that applies to many levels of the current system. Consumers “abuse” the unusual system if they have access to, and can afford, healthcare but go without, knowing that hospitals won’t turn them away if they need care. As stated earlier, greed also drives many providers to “milk the system” in regard to false treatments, inflated claims to insurers and Medicare, and other well-documented scams. Furthermore, some insurance companies are only in the business of making money and not “paying claims.” This is also a type of fraud that needs to be stopped.

There will always be people looking to “get over” other people. It is a unlit indictment of society over the past 30 years that this is just how some people are raised. No proposed system will be able to eliminate this cost driver completely. However, if everyone had access to care, the reasons to “scam the system” would be greatly diminished.

What In The Current System Works?

When this article was first written in 2004, health care wasn’t even on the national radar; now, there are many “solutions” being proposed. Most proposals try to maintain what is good in the current system, and rightly so. There is distinguished pleasant.

First, we have the freedom of choice, not only between carriers and providers but also in regard to plans and coverage levels. Any solution that proposes removing this freedom is, I feel, doomed from the start. Thus, proposed “solutions” that include mandated concept designs are, I feel, misguided.

While most people would express dissatisfaction over the cost of healthcare, the fact is that the new system does use Market-Driven Pricing. Individuals and employers have the freedom to decline coverage that they consider too expensive. Carriers understand this and must price their plans competitively; otherwise, they will erode market share and eventually face reduced profit.

Finally, the current system includes Market Competition. While this market is dominated by a handful of national providers, the current system also allows small regional providers to offer competitively-priced alternatives. This in turn forces the big nationals to be more careful in pricing themselves where this competition exists.

The successful solution needs to retain these elements.

Can We Achieve A Long-Term Solution?

So, you might well ask if we can ever gain control over our healthcare costs while still delivering acceptable levels of care. The answer is an unequivocal “YES!” The solution however must include sacrifices from all participants: (1) the providers of care; (2) the carriers; (3) the insureds; (4) plan and network administrators, (5) employers, and (6) the brokers/agents. Most attempts at serious change have failed to come by a solution savory to all parties, thus leading to lobbying and political in-fighting and eventual failure. I believe that the following proposal, while level-headed requiring some sacrifices from all parties, can achieve the necessary balance to allow for success.

The Basic Structure

I propose that we bustle our national health system just like the major corporations of the world run their plans. Think of it like a huge self-insured plan covering 281 billion people. Yes, — it sounds “daunting.” But it is possible.

As in any large, Fortune 100 health plan, there exists the following participants: (1) the providers of care (doctors, nurses, surgeons, labs, etc.); (2) the carriers; (3) the insureds; (4) the plan administrator, and (6) the broker/agent. The broker/agent initiates a Request For Proposal (RFP) and sends it to all vendors that might be able to supply the required services. Responses are analyzed and the top bidders are presented to the client. A selection is made, and implementation begins.

There is no reason why a similar process cannot acquire place for our National Healthcare System. With the structure shown in Figure 1 below, nine (9) carriers can be contracted with 3-year terms to provide three (3) plans each. Plan 1 can be a PPO, plan 2 can be an HMO, and the carrier can be free to offer any Plan 3 it wishes. This will promote freedom of choice in coverage levels.

After the initial 3-year Phase-In, three carriers would come up for bid each year. This will promote competition and allow new players to access the market in the future. In order to announce immense National coverage, carriers will be forced to manufacture their networks competitive or negotiate with regional networks. During the transition, all existing plans, both public and private, would continue to operate in order to minimize disruption. This would also allow current players the time to adjust to the new market environment.

Now let’s look more closely at the components:

The National Healthcare Commission

A “National Healthcare Commission” [NHC] should be formed to conduct the selection process and run the program. It can be made up of industry leaders representing the many interest groups, such as pharmaceutical manufacturers, hospitals, the AMA, the American Bar Association, insurance carriers, Pharmaceutical Benefit Managers, labor groups, AARP, etc. Congress can also create a new Cabinet Level post for the National Health Director, who could be non-partisan and appointed in much the same scheme as the head of the Federal Reserve or a Supreme Court Justice. Seats on the NHC should also be non-partisan. At the end of the three-year transition, we would have nine carriers involved, with three coming up for re-bid each year thereafter. This would ensure ongoing competition and tag efficiency. Plan designs would be at the discretion of the carrier subject to a minimum standard set by the NHC and including those mandates that are determined to be of value.

Such a system would allow people to select networks and use doctors of their bear choosing. Claims would continue to be processed by the participating vendors. Pricing would composed be driven by administrative efficiency and network discounts. It would also allow vendors such as Multiplan, Beechstreet, and other national network administrators to compete. I am certain that enterprising and intelligent people “out there” would find ways to achieve additional pricing efficiencies that would allow them to compete under this new system. I also envision that such a change would lead to mergers and acquisitions within the industry among networks and carriers, which would also lead to additional efficiency as well as market growth.

Furthermore, as we know with any self-insured plan, the administrative National Healthcare Committee and the Healthcare Director would also have all the tools they would need to track and manage utilization, implement early intervention, utilize Disease Management or Work/Life programs, and implement any of the many cost controls currently available in the industry. What they would NOT be empowered to do is dictate coverage beyond the basic mandates or establish reimbursement levels.

So, we would have a national healthcare system in which: (a) Doctors continue to operate noteworthy as they do now, (b) Carriers continue to operate much as they do now (with forced efficiency), (c) Insureds bewitch providers and plans like they do now, and (d) The levels of care and benefits are peaceful dictated by the market, not the government. What we would get rid of is waste and inefficiency. The only government involvement would be in the annual RFP process of selecting carriers, the collection and disbursement of funds (like any Fortune 100 employer), and the data analysis that would lead to contracting initiatives and future cost savings. Because of the size of the plan, there would be immediate “credibility” in negotiating premiums. The NHC could also negotiate bulk pharmaceutical discounts. This proposed system would provide the greatest efficiency and the best use of existing technology in controlling costs.

Employers

The largest beneficiaries of this proposal would be employers. Yes, they would still need to participate in some funding mechanism. However, they would be freed from the administrative and HR burdens associated with the current system. Furthermore, for many it would mean a net savings from current healthcare costs. This should result in pay increases as well as increased profits, which in turn should generate additional discretionary consumer spending and market expansion.

Enrollment

Although carriers would no longer be paying a “commission,” there would still be a need for them to pay service fees per participant to the broker who enrolls and services that participant. With employment remaining the primary access for most eligible citizens, it is also reasonable to suggest a 6-week “open enrollment” every year beginning in mid-October during which all employers would be required to allow their brokers to enroll their employees into the National Health Plan. Those brokers with existing books of group health plans would therefore have each and every employee on these plans as a possible client and receive an “enroller” and “service” fee for each.

Providers and Hospitals

Since claims processing and payments would still come from the carrier rather than the government, providers and hospitals would continue to function very much like they do under the current system. In many ways, at the end of the transition when existing plans like Medicare, Medicaid, and the Federal Employees Health Plan would be folded into the new National Health Care Plan, hospitals and providers would be freed from the administrative burdens imposed by these existing plans and may even regain additional revenue from higher payouts.

Carriers and Plan Administrators

This proposed plan would require carriers, plan administrators, and network administrators to change their business models slightly. However, the ruin result would be greater efficiencies and the opportunity to allege on a National Contract. Regional network administrators would negotiate with carriers to help improve the carrier’s efficiency. Inefficient vendors unable to make this transition would have to look to different markets. Mergers and acquisitions would probably be the long-term result, but this too would lead to greater market efficiency.

Brokers and Agents

It is moral that this proposal calls for a phased end to the current system over three years from its inception. I expect that it would take two years from the decision to implement this system for all of the parties to work out the details and get the National Director and NHC in plot. Thus, we are looking at about a five-year time horizon here. Many brokers and agents who rely on medical coverage will need to seek new revenue. That said, these same brokers and agents would be in a position to receive enrollment fees from carriers for their existing books. With nine competing carriers, the carrier’s profits would improve with higher participation; thus each carrier would be incented to offer “enrollment fees” to brokers and agents would could assert them enrollees. Brokers and agents would also continue to act as consultants to their clients for all other benefit matters. The money employers and employees would save from no longer paying medical premiums could be re-allocated toward Voluntary Worksite Benefits, non-qualified fringe benefits, and pensions.

So, yes, there would be a important adjustment. But it wouldn’t be the “end of the world” many in the insurance industry predict.

The Uninsured

Since anyone with a Social Security Number would be eligible for coverage, there would be a significant reduction in the number of uninsured. Those who remain uninsured would probably do so because they distrust the system, they are in the U.S. illegally, or they enjoy they can scam the system. In any of these cases, these people would eventually risk needing care, at which time they would need to establish their financial ability to pay. This new system may also drive those here illegally to become correct citizens. One critical aspect of any new system, however, is the raze to “free care” for all but the most needy.

Consumerism

“Consumerism” comes the closest to addressing a root cause of the problem: the lack of involvement on the part of the healthcare user. It must therefore have a part in any long-term solution.

The concept finds its roots in the legislative authorization for Medical Savings Accounts [MSA], an idea that never gained widespread acceptance in large piece because of the restrictive contribution limits. EBRI began researching the issue at its 49^th Policy Forum in May of 2001. In 2002, at a National Symposium in Baltimore on healthcare, Johan Hjertqvist of The Timbro Health Unit in Stockholm addressed consumerism in the pharmaceutical industry as a way to simultaneously: (1) mutter improved outcomes in medical care, (2) meet social and moral obligations, and (3) improve Quality-of-Life.

The 2004 Economic Report that was commissioned by President Bush then took the view that those without insurance are, in fact, “efficient buyers of healthcare services” since they only incur expenses when they are truly needed. The report asserted that the insured population is actually over-insured and their behavior is wasteful. It is this philosophical stance that now drives us toward Consumerism, in an attempt to gain the insured more like the uninsured. The point is to provide incentives to the insured to make more carefully-reasoned buying decisions – in the process making them pay for more services out-of-pocket like the uninsured.

Essentially, all Consumer-Driven Health Care [CDHC] models involve the same components: (1) a high-deductible health plan [HDHP], (2) a reimbursement account, and (3) consumer tools.

Consumer Tools are the critical component. They will determine the level of consumer involvement and the success of the outcomes. Common offerings include: (1) Employee Assistance Programs [EAP], (2) Discount Programs for vision, dental, convenience items, and prescriptions, (3) Disease Management and early intervention programs, (4) online provider performance measures, and (5) personal “MyHealth” web pages where consumers can manage their own medical histories, download documents, track claims, and manage their reimbursement accounts.

Incorporating these characteristics into the new system will also be critical to its success.

Now the Funding

As for the collection and administration of the funds, I would suggest that computer systems exist that are fully capable (with some new programming and a very large storage capacity) to administer such a plan. As for where the money would come from, I am not an economist or an actuary, and I am sure there are many people better qualified than I to “flesh out” the funding details if this proposal sparks some interest. However, I will offer some general observations.

In a recent article in Life, Health & Disability, distributed by the Society of Financial Service Professionals, Malcolm Gladwell of The New Yorker stated that the uninsured “consume, on average, $934 a year on medical care. . . . Those of us with private insurance, by dissimilarity, consume $2,347 worth of health care a year.” ⁹: He also points out that “The United States spends more than $1,000 per capita per year – or close to $400 billion – on healthcare-related paperwork and administration, whereas Canada, for example, spends only about $300 per capita per year;” This leads one to assume that significant savings can be achieved through increased efficiencies.

Americans spend $6,700 per capita on health care every year ¹⁰, over three times the industrialized world’s median of $2,193; Many of the “naysayers” in the debate on national healthcare point to the $2 trillion plus per year that we currently spend on healthcare, saying that funding such expenditures is insurmountable. I suggest that the funding needs are indeed attainable and the actuarial analysis that I ask to occur must allow for fresh inefficiencies.

Since per-capita spending is expected to reach $12,300 by 2015, ¹¹ I would suggest starting out funding for about $7,500 per capita. The latest population number identifies a total United States population of 299,199,906. The Department of Labor lists total healthcare spending at around $2.1 trillion in 2006. Using these numbers, all the actuaries have to do is figure out how we can regain $7,019 per citizen per year.

Of course, I am over-simplifying to beget a point. Naturally, you cannot query a family of five to pay over $35,000 for their coverage. Under the current system, funding is provided through the following: (a) Employer premiums to insurance carriers, (b) Employee payroll deductions to their employers, (c) Insured copayments to providers, (d) Medicare/Medicaid premium deductions from SSI, (e) Individual premiums to insurance carriers, (f) Federal subsidies to carriers and providers, or (g) Federal subsidies to States.

Under a National self-funded Health Plan, we would be paying for actual claims plus administration only. Claims would be paid by the carriers and reimbursed through standard, self-insured claims reports. I expect that some combination of collection methods will be necessary, since payroll deductions cannot work for the unemployed. Some collection methods that I believe can work include: (a) Employer’s Quarterly 940 or 941, (b) Corporate 1120s, (c) Employee Payroll Deduction, (d) Tax Assessments on Individual 1040s, and (e) A separate billing mechanism similar to Property Tax collection.

I would also expect that a dual-pricing strategy would be necessary to maintain the pricing for current Medicare participants and those covered under the current Federal Employees Health Benefit Plan. The proposed “phase-in” would allow for a smooth transition for the participants of these and other existing programs.

Co-payments and coinsurance would also provide a fragment of the funding. This of course would be driven by thought design and participation, but these are issues faced every day by those running large self-insured medical plans.

The point is that the size of the task should not deter us from trying. Furthermore, funding for $7,500 would allow for a possible surplus, which hopefully would also be grown through cost savings and efficiencies. All I suggest is that there are brilliant actuarial minds in this country who I am distinct can advance at a workable funding solution. The first step, however, is in believing it is possible.

Conclusion

By now you are wondering why an insurance broker who specializes in Employee Benefits would be proposing an approach that will effectively raze this market as we now know it? The answer in part goes back to my opening statement about “sacrifice.” Yes, there will be some adjustment. I believe this plan reaches the needed compromise to satisfy all participants. Carriers would be forced into efficiency but essentially continue to operate as they do now. Hospitals would be freed from mighty of the bureaucracy that currently hinders profit levels. Consumers would access health care from carriers and process claims much as they do now. Brokers and agents would give up “commission” income but pick up consulting fees. The National 6-week enrollment period would provide brokers and agents with additional enrollment fee income. Doctors and other providers would join networks and function the same as they currently do. Malpractice insurance premiums would advance down following reforms in the system.

There has been a saying that I am sure many readers have heard before: “There is always a reason not to do this.” I now say to you that there are far more reasons to put our differences aside and secure this done. So the next step is to allow that this could actually work and . . . begin the dialogue that could lead us to a actual and long-lasting solution to the healthcare problem!

Endnotes

¹ Gallup Organization, “What Do You Think Is the Most Vital Problem facing this Country Today? ” Gallup Poll Most Principal Problem Series, Oct. 11-14, 1990, through Sept. 14-16, 2007.

² John A. Poisal et al., “Health Spending Projections through 2016: Modest Changes Obscure Part D’s Impact,” Health Affairs, 26, no. 2 (2007).

³ Mercer Human Resource Consulting, “2005 Survey on Employee Benefits.” Please note that there is a methodological discrepancy between the Mercer numbers and the trend as reported by the Hay Benefit Group, which I maintain is based in the weighting methodology used by Hay.

⁴ Gallup Organization, “What Is the Most Important Financial Problem Facing Your Family Today? ” Gallup Poll Social Series, July 12-15, 2007. http://www.galluppoll.com/content/? ci=28384.

⁵ Todd Gilmer and Richard Kronick, “It’s the Premiums, Stupid: Projections of the Uninsured through 2013,” Health Affairs, 25, no. 6 (2006).

⁶ James G. Lakely, “Spending Escalates Under GOP Watch,” The Washington Times (November, 2003).

⁷ Kaiser Health Research & Education Trust, “Employer Health Benefits 2006″ Kaiser Family Foundation, 2006.

⁸ William Copeland, Jr., Ed. “The Catalyst For Health Care Reform,” Deloitte Consulting LLP, 2006, Pg. 12.

⁹ Malcolm Gladwell, “The Moral-Hazard Myth: The Poor Idea Behind Our Failed Health Care System,” reprinted with permission from The New Yorker, Life, Health & Disability (December, 2005).

¹⁰ William Copeland, Jr., Ed. “The Catalyst For Health Care Reform,” Deloitte Consulting LLP, 2006, Pg. 3.

¹¹ Ibid.

Related Blogs

Whether you are making a choice between the health insurance plans offered by your employer, or buying an individual policy for yourself, here are 10 tips to take into consideration.

1 Know thy needs
Before you gain down to comparing different plans, it is important to determine your insurance needs. You may not find a policy that will cover every contingency, but you should try to find a plan that at least covers the essentials, and meets your medical needs.
Does a family member have special needs? Do you understanding on having a baby in the next couple years? Does a dependant need prescription drugs? Do you travel abroad? Thinking this through will enable you to match your next policy with your current and future medical needs, and get the kind of coverage that is right for you.

2 Shop around
All health insurance policies are not created equal. You or your insurance agent should get quotes from different insurance companies for comparison. You will find that there are broad differences in the cost, benefits and exclusions offered by various policies. By shopping around, you may not only save money on your insurance premium, you may also find a policy with benefits that are better suited to your needs. While shopping, be obvious to do an apples-to-apples comparison of the standard benefits that each company has to offer.
One of the most convenient ways to get quotes from a number of health insurance companies, is at an insurance comparison website. You will fill out a single questionnaire and get several different quotes. Here are three comparison sites:
www.ehealthinsurance.com
www.netquote.com/
www.LowerRateQuotes.com/health-insurance.html

3 Review the Benefits
Before you commit to buying a policy, it is essential that you understand exactly what it will pay for and – just as important – what it will not pay for. Be sure to read the exclusions fragment of the policy very carefully, as many health benefits are strictly optional, and will vary from one plan to the next.
*Does the policy cover preventive care?
*Does it offer vision and dental care?
*Will the plan conceal pre-existing conditions?
*Is ambulance service included?
*Are prescription drugs covered?

It can be financially disastrous if you fall ill only to find out that your policy does not cover your particular condition and you are left on the hook for the bill.

4 Out of pocket expenses
Your monthly premium is not the only expense you will incur as far as your healthcare goes. Whichever insurance plan you go with, there will usually be some out-of-pocket expenses that you will have to pay. Before you buy your policy you should find out upfront what these expenses are going to be. What is the co-pay on the policy? If there is a deductible or co-insurance, what are the amounts? What is the maximum amount you will have to pay out of pocket?

5 Choice, Cost and Coverage
There are several types of health insurance plans out there: the HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), POS (Point of Service), HSA (Health Savings Account) and traditional indemnity insurance plan.
The insurance plan you choose will determine:
*The flexibility you have in choosing your health care provider
*The cost in insurance premiums and out-of-pocket expenses
*The level of coverage offered and the benefits excluded

Make definite you compare and consider the pros and cons of each option when choosing your health insurance. If you are looking to save money, for example, an HMO has the lowest out-of-pocket expenses, but it has the most restrictions. Indemnity and PPO plans offer greater flexibility, but have higher out-of-pocket expenses such as a deductible.

6 The Price you pay
Price should not always be the determining factor in choosing a health insurance plan. Ensure that the opinion you choose offers all or most of the health benefits you may need, particularly coverage for major medical conditions. Having to pay for a notable medical service out of your own pocket may cost you far, far more than what you could possibly save in premiums. It may also be financially devastating.
In the long run, the plan with the lowest premium may not work out to be the cheapest plan. The least expensive plan is the one that offers the best price for the particular coverages that you need.

7 The “free look” Clause
Be determined your policy has a “free look” Clause. Most insurance providers allow you a 10-day period during which you can cancel your policy and have your premium refunded with no penalty. This allows you time to carefully review the policies documents, and make a final decision as to whether or not you like the terms and the coverage offered. Take advantage of this provision to read and really understand your policy and the policy terms, and even get a second view.

8 Guaranteed renewable coverage
Some health insurance companies will cancel your insurance policy or hike your rates if you plunge sick – distinguished like an auto insurer may cancel your coverage if you have one too many accidents. This is actually legal in distinct states.
Look for a policy that offers non-cancelable coverage, guaranteed to renew each year. If this is not available, a “conditionally renewable” policy is another option. Under this policy, the company will reserve the right to cancel all its policies that are similar to yours, but you cannot be singled out for cancellation.

9 Maximum Life Benefit
Another principal consideration is the maximum lifetime benefit. This is the total dollar amount your insurance plan will pay out as long as you own it. that your insurance company will pay over the lifetime of the policy. Ideally, this limit should be at least $1 million

10 Questions are the Answer
Choosing your health insurance plan is a crucial financial decision. Before you effect any money down, be sure that you understand your new insurance contract. Ask your insurance agent or company to fully explain anything on the policy that you do not understand. Ask questions and be sure that you understand the answers. If not, ask again.

***WHAT ON EARTH IS TEMPORARY HEALTH INSURANCE?

Many if not most, people have never heard of temporary health insurance until suddenly they need it. Into most lives a gap must fall. People are in between jobs, on strike; working but benefits have not yet kicked in. Or they may be recent graduates who had health insurance throughout college and now they are now they are out pounding the pavements without any health insurance. For these reasons temporary health insurance is there for all those in between times. It will cover you from one to twelve months.

***IS TEMPORARY HEALTH INSURANCE LIKE REGULAR INSURANCE?

Yes and no. For starters, it never ever covers pre-existing conditions. No, nyet, no way, nada, and N.O. Nor does it cover preventative, routine health care. That means no physicals, no routine blood work, no mammograms. There is no financial benefit whatsoever to a temporary health insurance company for providing this kind of coverage. Other than these exceptions, temporary health insurance is pretty much like regular health insurance.

***ARE THERE SPECIAL COMPANIES FOR TEMPORARY HEALTH INSURANCE?

Do you mean something like Temporary Contemporary or Memp Temp, headquartered in Memphis Tennessee? No, it’s the same conventional companies that you love, hate, or are indifferent to. Blue Nefarious, Aetna, Humana and many others offer a wide range of plans. There are a number of sites on the Internet where you can get quotes and details. Always go to your library and read the assist issues of Consumer Reports that rate insurance companies.

***HOW Powerful DOES IT COST?

Let’s say you are a 40-year-old woman. If you take no deductible, your rates will be around $200 a month but they go all the way down to $100 if you take a $5000 deductible. There are also co-pays running from 20% to 50%.

In other words, it ain’t cheap. If you are flat broke and have no income or assets-no savings, stocks or bonds, no little chalet in Vale-you can go to your local welfare office and get your state’s version of Medicaid.

***DO I REALLY NEED TEMPORARY HEALTH INSURANCE? I’M VERY HEALTHY.

You’re out job hunting and you’ve got on your classy pair of spike heels. Your feet are killing you but you bravely pound the pavement. Suddenly that little heel catches in a crack and you twist and drop. There is a sickening “thunk” as your head hits the pavement. Now you have a spiral fracture to the leg and a brain injury. The doctors have to operate on your leg and drain the fluid from your brain. You are now thousands of dollars in debt and your salary from any job you get will be used to pay off this debt. You decide. Do you need temporary health insurance?

With the soaring costs of Health insurance, the financial toll on your itsy-bitsy business may force you to pass on more of the costs to your employees, or to conclude offering health benefits altogether. Before you get your decision, deem these five valuable reasons why offering your employees Group Health Insurance may be money well-spent:

To attract and support the best employees in a competitive job market
Survey after peer has shown that after monetary compensation, employees value health insurance benefits over any other aspect of their job. Group health insurance benefits may well be the deciding factor for a prospective employee who may be choosing between your job offer and a similar one offering the same pay. A competitive health benefits package is also very likely to aid you sustain your best workers.

To procure affordable health insurance coverage for yourself
If you have or are shopping for insurance for yourself and your family, you will fetch that an individual health insurance view is likely more expensive than a group health opinion. The more employees you have, the lower the rates you can procure.

To assume advantage of available tax incentives for your business
There are a number of vital tax incentives offered to businesses that offer employees health insurance benefits. As a business owner, you can usually deduct 100% of your group health insurance premiums on qualifying plans. If your group understanding is offered as a total compensation package, you may also prick your payroll taxes.

To offer your employees tax deductions
Your employees, in their turn, will reap tax advantages by paying for their health insurance using pre-tax dollars �€” their insurance premiums are taken from their pay check before their taxes. If they bought their contain individual health insurance, they would have to pay for it with after-tax dollars. It may also potentially lower their tax bracket. Secondly, if you offer a Health Savings Understanding, not only will your employees back from lower premiums, but any earnings made on the Health Savings Memoir will also net tax free.

To increase productivity and lower absenteeism
Research has shown that people who have health insurance are far more likely to steal preventative health care measures than those without insurance. This makes them less likely to plunge ill or to let an illness or injury progress to an advanced stage before getting medical attention.
What’s more, health insurance benefits have been shown to lower the incidents of absenteeism – jubilant healthy employees are more likely to indicate up for work, and to be more productive on the job.

Conclusion
Despite its rising costs, there are many reasons why group health insurance is genuine for your business and employees. For ways to put on your Dinky Business Group Health Insurance, win a watch at this article: Top 5 Tips For Saving Money on Diminutive Business Group Health Insurance.

With the soaring costs of Health insurance, the financial toll on your little business may force you to pass on more of the costs to your employees, or to cessation offering health benefits altogether. Before you create your decision, contemplate these five well-known reasons why offering your employees Group Health Insurance may be money well-spent:

To attract and keep the best employees in a competitive job market
Survey after study has shown that after monetary compensation, employees value health insurance benefits over any other aspect of their job. Group health insurance benefits may well be the deciding factor for a prospective employee who may be choosing between your job offer and a similar one offering the same pay. A competitive health benefits package is also very likely to befriend you keep your best workers.

To pick up affordable health insurance coverage for yourself
If you have or are shopping for insurance for yourself and your family, you will accept that an individual health insurance understanding is likely more expensive than a group health concept. The more employees you have, the lower the rates you can accept.

To choose advantage of available tax incentives for your business
There are a number of distinguished tax incentives offered to businesses that offer employees health insurance benefits. As a business owner, you can usually deduct 100% of your group health insurance premiums on qualifying plans. If your group belief is offered as a total compensation package, you may also slash your payroll taxes.

To offer your employees tax deductions
Your employees, in their turn, will reap tax advantages by paying for their health insurance using pre-tax dollars �€” their insurance premiums are taken from their pay check before their taxes. If they bought their hold individual health insurance, they would have to pay for it with after-tax dollars. It may also potentially lower their tax bracket. Secondly, if you offer a Health Savings Conception, not only will your employees serve from lower premiums, but any earnings made on the Health Savings Memoir will also bag tax free.

To increase productivity and lower absenteeism
Research has shown that people who have health insurance are far more likely to pick preventative health care measures than those without insurance. This makes them less likely to plunge ill or to let an illness or injury progress to an advanced stage before getting medical attention.
What’s more, health insurance benefits have been shown to lower the incidents of absenteeism – delighted healthy employees are more likely to demonstrate up for work, and to be more productive on the job.

Conclusion
Despite its rising costs, there are many reasons why group health insurance is edifying for your business and employees. For ways to build on your Microscopic Business Group Health Insurance, steal a leer at this article: Top 5 Tips For Saving Money on Miniature Business Group Health Insurance.

Many tiny businesses have crucial decisions to do concerning health insurance. Unfortunately, offering comprehensive health insurance plans to employees can cost a exiguous business a lot of money each year. The business will have to struggle to pay their bills and enjoy a healthy bottom line. If a slight business chooses not to offer a health insurance idea, they may risk losing distinguished employees.

An overwhelming 95% of microscopic businesses will fail in the first five years, according to the Puny Business Administration. This is due to many different factors, including lack of interest in the product or service being sold, financial burden, taxes, unforeseen costs, and startup costs. Adding the cost of health insurance for even two or three employees can send a tiny business into bankruptcy. Little businesses have to fetch other ways to offer benefits to their employees so that they will remain real to the company. But these days with rising health care costs, many employees need the security of smart that they have health benefits through their employer.

Types of Health Plans

Limited businesses have options when it comes to offering exiguous group health insurance plans. They can recall out indemnity policies that would require employees to pay for medical costs up front and then be reimbursed. This perform of health is the least expensive, but rotten to employees who cannot afford to pay out of pocket expenses. Another alternative is to offer employees a basic health care package that will hide hospital and some prescription costs. Again, this will cost employees more money. HMO’s and PPO’s are very expensive health plans, but will screen most medical situations. HSA’s are becoming more celebrated as a diagram to offer health insurance. These are health savings accounts. Each year, an employee will find an allotted amount of money that they can spend for their health care needs. Exiguous businesses and employees will pick up tax breaks that will succor off status the cost.

Since group health insurance coverage for minute businesses will cost a lot of money each year, some minute businesses have decided to offer other incentives to their employees along with a basic health care idea. These incentives are sometimes enough to maintain employees actual to a company.

Thinking Outside the Box

Employee motivation programs are a design for tiny businesses to offer employees extra benefits without adding to the cost of their health insurance.
Small businesses will offer incentive programs that include:

•
Personal Time or Floating Holidays
•
Company discounts on merchandise or services
•
Tuition Reimbursement
•
Extra Sick Days
•
Business Cards
•
Gym Passes
•
Parking Privileges
•
Direct Deposit Options

There are many other incentives minute business owners can give to their employees depending on the type of business they are in. Combining these incentives with a basic health care notion will aid to withhold hard working employees from finding other jobs. Being lenient about leaving work early for a doctor’s appointment or other personal business is another draw to retain employer loyalty.

The Bottom Line

In the demolish, the bottom line will always rep because if a shrimp business cannot pay for itself, then everyone will have to gain a recent job. Tiny businesses can be a gamble. But with suited planning, thinking of creative ways to offer employees competitive wages, health benefits, and other incentives, a exiguous business can succeed. Research is the best plan to regain out how to finance any business. Creativity and innovation are the ways to support a miniature business on the correct track.

Many microscopic businesses have crucial decisions to gain concerning health insurance. Unfortunately, offering comprehensive health insurance plans to employees can cost a minute business a lot of money each year. The business will have to struggle to pay their bills and have a healthy bottom line. If a puny business chooses not to offer a health insurance thought, they may risk losing necessary employees.

An overwhelming 95% of shrimp businesses will fail in the first five years, according to the Minute Business Administration. This is due to many different factors, including lack of interest in the product or service being sold, financial burden, taxes, unforeseen costs, and startup costs. Adding the cost of health insurance for even two or three employees can send a runt business into bankruptcy. Itsy-bitsy businesses have to obtain other ways to offer benefits to their employees so that they will remain true to the company. But these days with rising health care costs, many employees need the security of intellectual that they have health benefits through their employer.

Types of Health Plans

Exiguous businesses have options when it comes to offering petite group health insurance plans. They can lift out indemnity policies that would require employees to pay for medical costs up front and then be reimbursed. This develop of health is the least expensive, but corrupt to employees who cannot afford to pay out of pocket expenses. Another alternative is to offer employees a basic health care package that will camouflage hospital and some prescription costs. Again, this will cost employees more money. HMO’s and PPO’s are very expensive health plans, but will cloak most medical situations. HSA’s are becoming more favorite as a plan to offer health insurance. These are health savings accounts. Each year, an employee will regain an allotted amount of money that they can consume for their health care needs. Limited businesses and employees will obtain tax breaks that will serve off location the cost.

Since group health insurance coverage for itsy-bitsy businesses will cost a lot of money each year, some exiguous businesses have decided to offer other incentives to their employees along with a basic health care concept. These incentives are sometimes enough to maintain employees exact to a company.

Thinking Outside the Box

Employee motivation programs are a plot for microscopic businesses to offer employees extra benefits without adding to the cost of their health insurance.
Small businesses will offer incentive programs that include:

•
Personal Time or Floating Holidays
•
Company discounts on merchandise or services
•
Tuition Reimbursement
•
Extra Sick Days
•
Business Cards
•
Gym Passes
•
Parking Privileges
•
Direct Deposit Options

There are many other incentives petite business owners can give to their employees depending on the type of business they are in. Combining these incentives with a basic health care understanding will serve to preserve hard working employees from finding other jobs. Being lenient about leaving work early for a doctor’s appointment or other personal business is another design to maintain employer loyalty.

The Bottom Line

In the slay, the bottom line will always collect because if a dinky business cannot pay for itself, then everyone will have to derive a unique job. Diminutive businesses can be a gamble. But with top-notch planning, thinking of creative ways to offer employees competitive wages, health benefits, and other incentives, a diminutive business can succeed. Research is the best design to net out how to finance any business. Creativity and innovation are the ways to hold a little business on the factual track.