The Rate Of Health Care Spending

Last week, the Centers for Medicare and Medicaid Services (CMS) released its annual health care spending projections. The CMS actuaries and economists project:

• Between 2009 and 2019, national health costs will grow at an average annual rate of 6.1 percent. This rate is about 2 percentage points faster than the projected growth of the gross domestic product, which is expected to average 4.4 percent. As a result, national health expenditures will grow from an estimated 17.3 percent of GDP in 2009 to 19.3 percent by 2019
• Private health insurers’ administrative costs will continue to fall, from 11.7 percent of premiums in 2008 to 11.2 percent in 2009. (In comparison, administrative costs were 13.7 percent of premiums in 2003.) Projections for administrative costs in 2009 are $4.3 billion lower than in 2007
• Private health insurance premiums will grow at a rate of 3.3 percent in 2009, up from 3.1 percent in 2008 and down from 4.4 percent in 2007. The rate of growth will decline to 2.5 percent in 2010
• Public health funds will account for 50.4 percent of all health care spending by 2011 – the first year government programs will account for more than half.

The report, published last week in Health Affairs, notes that the “two primary drivers of growth are medical prices and utilization.” It includes these proof points:

• Hospital spending growth is projected to have accelerated from 4.5 percent in 2008 to 5.9 percent in 2009
• Spending growth for physician and clinical services is expected to have accelerated to 6.3 percent in 2009, up from 5 percent in 2008
• Prescription drug spending is expected to have grown 5.2 percent in 2009, an acceleration of 2 percentage points from 2008.

The people we work with are saving an average of $2,208/year on their health insurance premiums without sacrificing benefits. You owe it to yourself to find out how an HSA can benefit you. Contact us today at 602-510-7507 or info@iqhsa.com.

IQ Financial Group, llc. is a licensed insurance agency in the state of Arizona.  We offer a complete selection of health insurance, term life insurance, disability insurance, long term care insurance and supplement plans to individuals, families, self-employed and small businesses throughout Arizona.  We offer the best in Arizona Health Insurance.
© IQ Financial Group, llc.

Traditional PPO Plan Compared To HSA PPO Plan

The following comparison was done for a family of four who was currently covered by a traditional PPO plan with Blue Cross Blue Shield of Arizona. 

Blue Cross PPO plan
$2500 individual deductible
80/20% coinsurance
With this plan your family could have a maximum out of pocket of $17,000 not including any copays you incurred during the same year ($2500 deductible x 2/family members=$5000; 20% coinsurance with an individual maximum of $3000/member x 4 family members=$12000).  Obviously this would be a worst case scenario if all of you maxed out the benefits in the same year. 

United HealthOne/Golden Rule HSA 100 Plan
$5000 family deductible
100% coinsurance
With this plan your family could have a maximum out of pocket of $5,000 total because all of your expenses during the year count towards meeting your family deductible ($5000 family deductible=$5000; 100% coinsurance after that means your maximum out of pocket for the year cannot exceed the $5000 family deductible).  With this plan the deductible can be met by one member of the family or by any combination of family members with claims totaling $5000. 

As you can see from an out of pocket stand point there is no comparison between a traditional PPO plan with copays and an HSA plan.  The next thing to compare would be the premium.  Current plan with Blue Cross the premium is $850/month.  The above HSA plan premium for your family would be $433/month saving you $417/month ($5004/year) of which you could contribute all or a part of to a health savings account to use for your out of pocket expenses. 

In this example if you deposited all of the premium savings to a HSA you would have enough in the first year to cover your total out of pocket exposure on the HSA 100 plan.

 In summary by making this change you would be reducing the out of pocket exposure by several thousand dollars per year ($12,000) and using the same dollars you are currently spending on premiums to not only pay premiums but also pay your out of pocket expenses for several years to come.

Get quotes for individual/family health insurance in Arizona here. Contact us today at 602-510-7507 to find out how an HSA can benefit you.

IQ Financial Group, llc. is a licensed insurance agency in the state of Arizona.  We offer a complete selection of health insurance, term life insurance, disability insurance, long term care insurance and supplement plans to individuals, families, self-employed and small businesses throughout Arizona.  We offer the best in Arizona Health Insurance.
© IQ Financial Group, llc.

Why Am I Getting A Rate Increase?

The fact is rates on health insurance policies increase. Even if you have not had any claims the rates on your individual/family insurance policy can increase. Insurance carriers increase rates based on the claims experience of the entire block of policies underwritten at the time your coverage began.

If the block of policies you are a part of has had above average claims over the previous 12 months you will receive an above average rate increase. If the block of policies you are a part of has had average to below average claims over the previous 12 months your increase will be lower than average to no increase at all.

At IQ HSA we assist our clients with the appropriate way of handling the increases they receive and managing their plan from year to year.

Get quotes for individual/family health insurance in Arizona here. Contact us today at 602-510-7507 to find out how an HSA can benefit you.

IQ Financial Group, llc. is a licensed insurance agency in the state of Arizona.  We offer a complete selection of health insurance, term life insurance, disability insurance, long term care insurance and supplement plans to individuals, families, self-employed and small businesses throughout Arizona.  We offer the best in Arizona Health Insurance.
© IQ Financial Group, llc.

When to Expect Premium Rate Adjustments

Whether you are on a group plan sponsored by your employer or own your own health insurance policy, rate increases are a fact of life.
Group plans have rate increases once per year on the anniversary of the plan.
Employers decide whether to:
• Accept the increase and make no adjustments to the plan
• Modify the plan benefits to lessen the impact of the increase
• Change to a new insurance carrier that has more competitive rates for similar coverage.

Individually owned policies typically have an initial rate guaranty period of 12, 24 or even 36 months. After this initial period rates can adjust annually on the anniversary of the policy and at age changes for the members of the family covered throughout the year.
Individuals/Families decide whether to:
• Accept the rate adjustment and continue the coverage without any changes
• Make changes to the plan benefits such as;  increasing the deductible or changing to a lesser plan with the same   carrier (without additional underwriting)
• Change to a plan with another carrier with more competitive rates (underwriting necessary).

At IQ HSA we assist our clients with the appropriate way of handling the increases they receive and managing their plan from year to year.

Get quotes for individual/family health insurance in Arizona here. Contact us today at 602-510-7507 to find out how an HSA can benefit you.