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Not-so-hidden cost of health insurance

May 19, 2008 | 12:30 pm

I hate to break this to you, but you're paying more for health insurance. Your employer is paying more too, but you're picking up more of the increase by seeing a bigger deduction in your paycheck and by paying higher co-pays.

Duh! This probably doesn't come as a surprise. But what's really depressing is that pretty much the whole wad is coming out of your pocket, when you think about it. Your boss's contributions are actually coming out of foregone wage increases, the authors of a new study say.

A survey of health spending in 14 states, the 2008 Milliman Health Index, found that while your boss pays $9,442, or 60% of the average family of four insurance cost of $15,609, you shell out $6,167. Of your total, $3,492 comes out of your paycheck and $2,675 comes out of your pocket. Milliman is a global consulting and actuarial firm.

“The employee’s share of spending on healthcare services rose by double digits for the second consecutive year in 2008,” study co-author Lorraine Mayne, a Milliman principal and consulting actuary, said in a news release. “We estimate the employees’ portion of healthcare premiums increased 10.1% in 2008 over 2007. This is likely to increase pressure on the next presidential administration to address healthcare costs.”

For Californians, who pay $15,861 to cover a family of four, things could be better. Folks in Phoenix pay $13,868 for the same coverage. But cheer up. It could be worse. A family of four in Miami pays $18,780.

-- Susan Brink

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Comments (4)

While casting about for health care systems to emulate, Canada's system isn't as represented. The reality is that Canada's Medicare is breaking.

I have been involved in Health Insurance since the late 80's, I am currently 45 Years old. I just saved a Corporation $40,000 a month- so you ask how is that possible?.. Well it is all about change and education, if your employees are paying Small Copays (ex. $5-10.) each time they visit a Dr. - the cost is being shifted to the employer. Back in the 80's I specialized in "Self Insured Large Groups"- today I am seeing a trend back- recently Kaiser Permanente announced administration for Self Funded large groups in Ca. Contact me for more information.

In 2008 folks need to understand that obtaining low Health Insurance premiums is about shifting costs and responsibility over to the employees. This translates into employers changing to higher copay and also higher deductible plans, employers also need to introduce a healthier lifestyle to employees'. Encourage healthy eating, encourage physical excercise and promote utlization of physicians and diagnositc labs that are charging less for services. In a booming economy employers can hand out "Rich benefits" in a struggling economy Employers need to find solutions to lower overall costs, and still keep employees happy.

In the U.S.A. Citizens have not been educated about Health Insurance, which is a wonderful thing for "Big Corporate American Health Insurance Co's". Consequently, a person gets sick goes to visit a Physician-
a. HMO Patients:
Visit a primary care physician who is controlled by a IPA (Independent Phsycians Association)- a group that monitors and controls the expense of health care. If a patient needs a diagnostic or referralI, the group will either allow it or deny the request. Physicians are pre-paid (Capitation) on this type of service- so think of it this way- if you are the Doctor you get paid if you see a patient or not.
b. PPO Patients:
In this type of system the complete opposite occurs- a physician is paid on services rendered. He/ She will bill the insurance company and receive a payment or seek payment from the patient. Physicians are actually encouraged by the system to administer as many test as possible. Think of it, you are paid for the amount of charges you bill.
c. Cash Patients:
Will incure all charges, if a person has any "net-worth" this is putting it all at risk.

Every year people call or write to me and ask me for my thoughts on Universal or a Single Payer System, and since 1991 my answer continues to be the same. "Until America votes in a new system, I offer solutions within our current system- when (if) are system changes so will I." Rudy L. Rivas, President & CEO National Health Insurance Writer-

Besides the problems of medical costs being high due to inefficiencies in the system, affecting employer-provided insurance, there is a separate, serious problem for people who lose their jobs, and wind up in the pre-existing-condition screened individual insurance market.

The way the system is constructed in California, a middle class citizen faces the substantial possibility of working hard, saving money, only to be completely financially wiped out because of the state's gaps in pre-existing-conditions regulations.

(According to some research I undertook myself and posted here: ,
your state is one of about 25 with such a gap affecting hard savers who responsibly attempt to maintain health insurance continuously) In particular, in the case of California, the gap arises from the $75,000 maximum medical payment payout in the state's high risk pool, as well as the fact that the pool is not guaranteed always to be open to enrollment.

Good luck to you all. Frankly, I live in NY state, where there is no such issue, and the issue in California makes it too risky for me to consider moving there.

My previous employment was with a small company that offered health insurance through SurePayroll. Though I no longer work with that employer, I was able to convert from a group plan to an individual one and keep the same service. I could have paid so much more if I didn't have them to help me find the best price available for the quality of coverage that I feel to deserve. I always has online access to their website as an employee for all of my insurance info, and changing it was seamless. These sure are trying times. I think that many of us are waiting to see what might come out from a new administration to help us all in this issue. Hopefully, out healthcare costs won't be so disproportionate to out income in the future.


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