The Secret To Affordable Health Insurance

Healthy Exercise Leads to Affordable Health Insurance

A jolly crew near Mary's Peak in Oregon
A jolly crew near Mary's Peak in Oregon | Source

Putting the Incentives Where They Belong

The secret to affordable health insurance lies in putting the financial incentives where they belong: In your control and on wellness, rather than on illness.

For reasons of federal tax policy, some years ago there was a decision to give workers at many large corporations free health care insurance as a tax-sheltered benefit, rather than let the employee have a pay raise so they could pay their own health care costs. This took the employee off the hook for health care costs, which was an incentive to use more health care services than was actually needed in many cases.

Up. up, and away went the costs of health care -- and down went the affordability of health insurance for smaller employers. (Admittedly, other factors, such as the cost of malpractice insurance, high-tech devices such as MRI and PET scanners, and the tendency to order more tests were all important in causing health insurance costs to rise, but the decision to make health care expenses payable by employers rather than employees was crucial in driving up health care costs.)

The one thing that declined was the individual worker's attention on doing everything possible to maintain his or her health. Since he or she was no longer directly paying for it, this was an unspoken incentive to use more medical services because they were "free". This further pushed up the cost of health care, making it even less affordable to employers and, therefore, more expensive to employees once the burden was placed back on the individual.

Times Have Changed Greatly Over The Past Twenty Years

Due to the skyrocketing costs of health insurance for businesses, many have ended their employee benefit programs altogether. This has placed both the cost of insurance -- if any is carried -- and the responsibility for maintaining health back on the employee's shoulders. This is a good thing, but to appreciate this fact will require us to unlearn some bad habits we picked up when we had "free" company-provided health insurance.

Getting Back To Basics

There is a real, definite need for affordable health insurance today, especially for families. This hasn't changed. Going without insurance to protect against unforeseen accidents and major illnesses is inviting bankruptcy due to the costs of uninsured medical expenses today.

Medical expenses charged at clinics and hospitals are much higher to the uninsured than they are to those who have health insurance. So, it really shouldn't be an option to consider going without coverage for either the individual or the family.

The Question Remains, "How Can We Qualify For Affordable Health Insurance?"

To answer this question, let's look at the situation from an insurance agent's perspective. How can he or she afford to give us the lowest possible health insurance premiums?

The answer puts us, in most cases, back in the driver's seat.

It's very simple: The well-chosen insurance agent can give the lowest premiums to those who are the least likely to cause any claims to the insurance company!

For most people, premiums can be kept affordable by not doing things that will cause them injury or illness. Dangerous hobbies such as sky-diving are sure to make an insurance agent nervous. Bad health habits such as being overweight, smoking, heavy use of alcohol and drugs, or a simple lack of physical fitness are seen as health risks by insurers and they, too, drive up the costs of policies.

Uncertainties Over Whether Obamacare Will Become Law

The uncertainties of the constitutionality of the Obama health insurance mandate remain, but they don't change the fact that the best way to get affordable health insurance is to be healthy and at low risk for accidents, workplace or otherwise. Our health is fairly predictable, based on a knowledge of our lifestyle and dietary habits. Our likelihood of accidents is also generally knowable to insurance agents by perusing our driving record, our occupation, and our sports and hobby pastimes.

What seems to be the wisest course of action is -- if you don't have one already -- to set up a tax-advantaged Health Savings Account (HSA) in conjunction with a high-deductible catastrophic health insurance policy.

The HSA will give you much more flexibility over how you choose to spend your health care dollars, whether it be for vitamin supplements, regular checkups, chiropractic care or other services that are not currently covered by HMOs. Having a catastrophic health insurance policy protects you and your family in the event of those unlikely, but unpredictable events for which you really need insurance coverage.

By setting up an HSA and high-deductible health insurance policy -- and doing your best to cultivate healthy habits of diet and exercise -- you and your family will be covered as you need to be, whether or not Obamacare passes into law.

The key to obtaining affordable health care ultimately depends on your efforts to stay healthy and accident-free.

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