What You Should Know To Save Money On Healthcare

By Irina

This digest-analysis of several key aspects of the current healthcare crisis in the U.S. may help the readers become more educated consumers of healthcare services.

Why so expensive?

Roughly 15.1% of the U.S. GDP (gross domestic product) is spent on healthcare that averages $5,198 per person per year. The numbers are expected to reach 17.9% of the GDP and $7,352 per person in 2005.

It wasn’t always that way. In 1960, America’s health bill was only $141 per person and nearly everyone was able to pay it out of pocket. What happened? Two key developments:

 


  1. free market was abandoned in favor of government- or employer-sponsored prepaid plans. Individuals no longer paid the bills and NO LONGER CARED what things cost.

  2. technology exploded. New and better diagnostic and therapeutic techniques were developed. And everyone demanded the best REGARDLESS OF COST.

Does Joe Average pay for you, or on the contrary?

In a given one-year time period, 50% of insured Americans don’t go to the doctor. Another 30% claim less than $500. THE REMAINING 20% CONSUME 80% of the $1.1 trillion annually. Only half of them indeed has serious chronic conditions or naturally induced traumatic symptoms. The remaining half is suffering LIFESTYLE DISORDERS like overeating, drinking, using drugs, practicing poor sex habits, not wearing helmets, seat belts, etc.

With health insurance you never get what you paid for. The numbers above suggest that for most of us it’s LESS much more often than MORE.

Vanishing insurance

Not long ago getting a job meant getting a good health benefits — now there are 44 million uninsured Americans. Not necessarily due to poverty, since over 25% of them make more than $50,000 a year. The trend also reflects the increasing number of self-employed and small businesses without health benefits.

Even more Americans will be uninsured in the future as increasing costs and patient rights laws force more employers to drop or cut back on health benefits. Bottom line — those still insured will have to pay even more for Joe’s LIFESTYLE DISORDERS.

What to expect

  • The average price of prescriptions is rising 4% per year;

  • The average senior citizen takes 3.3 medications every day;
  • 60% Americans require corrective lenses;
  • Over 33 million need hearing aids — yet only 6% can afford them;
  • 19 million Americans use chiropractic services that are not covered by insurance;
  • Approximately 10 million suffer from substance abuse — the cost of treating this illness is often not covered by insurance;
  • Another 5 million are suffering from mental illness that again is often not covered.

The solution

Americans spend nearly $200 billion annually on OUT OF POCKET healthcare expenses or nearly $1,000 per person per year. Most of this is paid for at FULL RETAIL prices.

As a solution to rising costs consider a MEDICAL SAVINGS ACCOUNT. This concept is like an IRA for healthcare. Instead of sending ever-increasing premiums to a black hole called insurance company, you buy a high deductible “catastrophe” plan and pay for the everyday health maintenance and routine medical procedures out of pocket with the help of your tax-free medical savings account.

You can further minimize your out-of-pocket healthcare expenses through various Healthcare Savings Programs. They negotiate prices on behalf of their members and provide access to the same networks of healthcare providers that large insurance companies use. The service is available for a modest monthly fee that is only a fraction of an insurance premium for similar coverage. No long-term commitment is required and — to make these programs even more appealing — all pre-existing conditions are accepted.

Summary: Healthcare today is 50(!) times more expensive than it used to be in the 1960s and shows no sign of getting any cheaper. There is no free lunch in America — the only way to save money on healthcare is to understand current trends and take appropriate action.

(C) by Irina 2003.

About the Author: Irina helps people save money on healthcare and create steady stream of residual income working from home

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