Experienced Medicare Broker
I’ve spent the last 23 years as a health insurance broker specializing in Medicare and individual coverage.
One main reason why the cost of these plans has risen significantly over the years can be traced back to two specific events.
1. The Affordable Health Insurance Act known as Obamacare has caused the monthly premiums to rise significantly beyond many Americans ability to pay the monthly premiums. The reasons are simple. One, the insurance companies were forced to take all applicants regardless of their health. Prior to Obamacare, the insurance company could reject your application due to many factors including what illnesses you had.
Prior to Obamacare a male under 30 could buy a $1,000 deductible with a $3,000 maximum out-of-pocket for under $100 per month. Today, those plans no longer exist and the replacements are high-deductible plans ($6,000-$8,000) with maximums out-of-pocket of maximums of the same ($6,000-$8,000) or higher. The premiums are much more expensive which are based on age and are north of $800 per month in some cases.
2. Americans as a nation are not as healthy as they should or could be and the lack of discipline has led to the situation, we are currently in. Thus, the cost of insurance keeps rising as cost of healthcare rises along with the unhealthy Americans. The cost of healthcare has risen beyond the cost of living because those involved want more money for everything they do. Doctors and hospitals keep raising their rates partially because their malpractice insurance keeps rising. Unfortunately, there are two reasons for the rise in malpractice insurance. One is the claims made by ambulance chaser lawyers and two, the cost of care keeps increasing.
We could debate this forever but really those two items are the reasons stated above. Sure, there may be other factors but these two are the main reasons in my opinion.
I’m not sure if there is an answer except universal healthcare which I am against. Just look at the cost of universal health insurance in other countries. Canada, for example, is a perfect case in mind. The long waits to obtain services can be proven by so many Canadians coming to the Pacific Northwest for medical services because they can’t get those services in a reasonable time in Canada.
Personally, everything the government touches gets ruined or destroyed or costs too much. Look at the Post Office, for example. The wages for federal employees are too high, with no risk of getting fired, thus the cost of mailing a letter or package keeps rising. Of course, there are many other examples of our government paying too much with no risk of termination and the retirement costs also keep rising. Apparently, that is what DOGE is supposed to find and reduce the government’s expenses. Merely stating a fact, not making any judgements.
Like every other country that has universal healthcare, you can expect long waits for services and sometimes the doctors are not as qualified as in the private sector. It appears that this is the direction that our country is going, health insurance wise and I am not happy about it because of the reasons stated above.
Not sure what the solution is except that having the government run it is a mistake and hopefully we won’t go there.
Today, individual coverage for the most part is high-deductible plans. This is not a bad thing as the purpose is to cover the large expenditures and not worry about doctor visits or generic medications. The way it works is the insurance charges you the contracted rates the doctor has with the insurance company. It’s more than a fixed copay but is not unreasonable and reduces your deductible and maximum out-of-pocket. The maximum means that you will not pay any more than that amount and for the balance of the year all medical costs are picked up by the insurance company. Hospitalization will cost more than the maximum out-of-pocket but everything else is covered by the deductible and maximum.
This is how health insurance is for the foreseeable future, and I recommend that clients take the highest deductible and maximum out-of-pocket with the lowest monthly premium. The best way to buy insurance is using an HSA, or health Savings Account. This is not your group health plans FSA, but the HSA is an account owed by you. You simply decide what you can afford to save into this HSA account and use it to pay for out-of-pocket medical expenses with pre-tac dollars. You can contribute a specific amount each year, amounts set by the government and use that pre-tax dollar to pay your medical expenses. You can do this until your turn 65,and then use that money to pay for a supplement or continue to pay your out-of-pocket medical expenses until there is no more money in the account.
The cost of health insurance is driving these HSA type accounts but most people like the concept but don’t have the discipline to set it up and put money in the account.
Lastly, remember that the insurance is there for major illnesses and not for doctor visits and small items. That is the direction that health insurance is going in so you might as well get on board and ultimately save premium dollars. It is not easy when you have family but unless you have group insurance, it’s the only reasonable way to go.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, take a look at Medicare 2025 Information.
The Barend Agency Inc.
Len Barend, Broker
Cell:702-250-2200
Email: len@insurance4unevada.com