The New Health Insurance Solution is not about what should or could be done to change health insurance—the legislation and regulations allowing the changes described in this book have already been passed, and the changes are taking place right now. The sooner you or your company take advantage of these changes, the safer you will be, and the more money you (or your employees) will have for your future health expenses in your Health Savings Account(s).
As illustrated throughout this book, there is a great paradigm shift under way: As a country, we are moving from employer-sponsored group health insurance plans to indi- vidual/family health insurance policies and from wasteful, low-deductible “other-people’s-money” health plans to efficient, high-deductible “keep- what-you-don’t-spend” HSA/HRA health plans.
Employer-Sponsored Group Health Insurance—The Old Way
■ In 2004, 5 million fewer U.S. jobs provided health benefits than in 2001 (see Chapter 1)—and health benefits will be eliminated from millions more jobs in 2006 and the years to come (see Chapter 5).
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- Among those jobs still providing health benefits, from 2001 to 2004 the average employee’s contribution (per family) increased 49 per- cent, from $149 per month to $222 per month,1 and the average employee’s annual deductible increased 35 percent (see Chapter 5).
- In 2004, 50 percent fewer large employers offered retiree health ben- efits than in 1993 (21 percent in 2004 versus 40 percent in 1993, see Chapter 8)—and soon no employers will offer retiree health benefits except those that are obligated to under expiring union contracts.
- The cost of health benefits now exceeds profits for most large employers and is rising much faster than GDP—the expected aver- age $14,000 per year ($1,166 per month) family premium in 2006 for employer-sponsored health insurance is more than the annual wages earned by some employees.
- U.S. healthcare costs have risen from one-twentieth of GDP in 1960 to almost one-sixth of GDP in 2005, and, unless something is done, healthcare costs threaten to bankrupt the U.S. economy by 2020 (see Chapter 1). A primary reason for rising costs is that most doc- tors and patients are still spending “other people’s money” when it comes to healthcare—see Chapters 9 and 10 for examples of how much you could save if you wanted to on your medical expenses.While about 50 percent of Americans today receive health insurance from an employer, this number is rapidly declining due to employers either dropping health coverage entirely or increasing the amount contributed by employees and their families for health insurance.