Answer to Rising Health Insurance Costs

By: Arthur Levine

Please feel free to use this article as long as credit is given to the resource box.
Keywords: Disease Prevention, Health Insurance, Health Savings Accounts, Universal Coverage, Health Care, New Middle Aged Group
? Copyright Arthur Levine 2007
Words: 843

There is now a substantial portion of the population in the United States, which is unhappy with their health insurance coverage or lack thereof. There are approximately 46 million uninsured in the US.

Members of the New Middle Aged Group are particularly interested in their health insurance options because many of them lose health care benefits upon retirement. Medicare, which is available at age 65, does not cover everything, and individual or family health care insurance policies are very expensive and for the most part payable with pre tax dollars.

Health care costs in the US keep rising, and in most years health insurance premiums do too often at double-digit rates. .

Disease Prevention expenses as a portion of Gross Domestic Product (GDC) accounts for some 16% of the budget with only 4% spent on Disease Prevention while 50% of Diseases are preventable.

According to the Congressional Budget Office by the year 2020 health care spending which, is already more than $2 trillion dollars (16% of GDP), could easily exceed 25% of GDP.

Americans 65 and older represent about an eighth of the population and one third of health care spending. By 2030 older Americans could account for nearly half of health care spending according to a study by the Centers for Medicare Services.

Government statistics indicate that health care spending by Americans between 1970 and 2005 has increased on average 9.8% per year for private health insurance and 8.9% for Medicare beneficiaries according to the New York Times.

The Republicans by and large favor a private insurance plan called Health Savings Accounts (HSA) to solve the Health Care problem. An overview of this program is that it allows businesses or individuals to contribute a certain amount of money tax free to a HSA (Health Savings Account) and take catastrophe or major medical insurance for the balance. The good part is that it encourages individuals to become Disease Prevention conscious because most of their medical expenses are coming out of their HSA, from which the balance of funds can re rolled over like savings from year to year. In major companies where the program has been instituted savings have been substantial. The drawback is that it tends to draw in young healthy people, and does little to help the aging, sick or uncovered portion of the population.

The Democrats by and large favor some form of Universal Health Care funded by the federal government. The good part is that everyone would be covered. The drawback is that there is no inducement by individuals to practice Disease Prevention because the government is picking up the tab and this might result in a new massive federally funded program that over time cannot be adequately funded by the government as it grows in light of demands from our other entitlement problems such as, Medicare, Medicaid and Prescription Drug Insurance.

Today we find ourselves at the crossroads of escalating Health Care Costs and Health Care funding requirements that have brought us to the point of a collision.

The solution may lie in combining some form of both of these programs utilizing the platform of Health Savings Accounts, which would be federally funded to the extent needed to subsidize them so that everyone could be covered including those with pre existing conditions either through a series of federal corporate or individual tax credits, or with direct contributions in the individual's name to fund the program, but it is not just about the cost of health care. It's about finding a solution.

The solution to our health care needs may well lie in practicing Disease Prevention nationally.

The costs of funding this combined approach might be substantially less than under a straight Universal Health Care plan because people would have the incentive to practice Disease Prevention once they understand that it is their money that they are spending on their health care, which can be rolled over from year to year similar to an IRA, and because catastrophe insurance is generally less expensive then the current all inclusive small deductible type insurance program being offered.

To this end, a Disease Prevention Program should be made available to everyone that will help them maintain a better state of health, and enable them to minimize their health care expenses in keeping with good medical practice and the utilization of best care options.

We have to show people how to practice Disease Prevention at the same time that we seek to cover them with Health Insurance if we want to produce a program, which in the long run can be self-funding through medical cost savings.
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