What Health Insurance Agents “Forget” to Tell Their Clients”

Published by John Wiley & Sons

http://www.amazon.com/Protecting-Clients-Fraud-Incompetence-Scams/dp/0470539747

Chapter Thirteen

Lance Wallach 

I was painfully initiated into boxing, because the guys I fought were a lot bigger than me.

- Sugar Ray Leonard

OUT OF CONTROL COSTS

Imagine a health insurance agent speaking with your business client about their health insurance.  The agent is thinking about the $100,000 premium they are going to receive when your client renews his Major Medical health insurance plan.  The agent conveniently forgets to mention an alternative type of health insurance plan that can reduce premiums by 40% - a Health Savings Account (HSA)  .

Think this is not happening everyday?  … think again.

If you think rising healthcare costs are only the insurance company’s problem or your employer’s problem, think again.  Most employees pay 10%-90% of their healthcare costs, when all costs are included.  All it takes is a quick review of your pay stub over the last few years to see that the insurance companies are passing on increasing healthcare costs to employers and employers are passing on these costs to employees.  Healthcare costs have risen 8%-10% each year over the last three years and are likely to grow two to three times the rate of inflation for the foreseeable future.   

Compounding the problem are State insurance laws.  Almost every state in the U.S. can deny individuals coverage through the underwriting process.  New Jersey is one of only five states in the U.S. that provides for “guaranteed issue” – which guarantees health coverage, regardless of health status, age, claims history, or any other risk factor.  Although this may be considered a blessing, it is an expensive blessing.  Almost by definition, this increases the cost of insurance coverage for everyone in the state to account for those who use the benefits most.

Established as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the HSA is a hybrid between health insurance and a retirement plan.  The HSA was established so savings used for qualified medical expenses for yourself, or anyone you claim as a spouse or dependent would be free from taxes.  Qualified medical expenses include: medical doctors, dental and optical care, chiropractic care, long-term care, and Medicare Part A or Part B and Medicare HMO insurance premiums.  Unqualified medical expenses include: cosmetic surgery, health club dues, nonprescription drugs and medicines and funeral expenses.