Health Care Plans | Summary and Q&A

TL;DR

Employer-sponsored health insurance premiums have increased significantly, outpacing inflation and workers' earnings, while deductibles have also risen. However, the cost of family premiums has slowed down. Health care costs have increased due to longer lifespans, new medical technologies, and expensive drugs. Employers employ various strategies to manage health care costs, including traditional plans, managed care, high deductible health plans, and consumer-driven health plans.

Key Insights

• 😮 Employer-sponsored health insurance premiums have risen significantly, but the increase has slowed for family plans.
• 💉 Rising health care costs are attributed to longer lifespans, increasing age-related health needs, and expensive medical technologies and drugs.
• 🌱 Employers use various strategies, such as traditional plans, managed care plans, high deductible health plans, and consumer-driven health plans, to manage health care costs.
• 🌱 HMOs, PPOs, and POS plans are different types of managed care plans, each with its own way of determining and paying for medical services.
• 😨 Criticisms of managed care plans include limited access to specialists, potential lack of patient care due to low out-of-pocket costs, and rising costs.
• 🧑‍⚕️ Consumer-driven health plans, like HDHPs and CDHPs, aim to encourage cost-conscious decision-making by employees.
• 🧑‍⚕️ Health savings accounts (HSAs) and health reimbursement accounts (HRAs) are examples of account-based health plans, providing ways for employees to pay for health care expenses.

Transcript

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Questions & Answers

Q: Why have employer-sponsored health insurance premiums increased significantly?

Employer-sponsored health insurance premiums have increased due to factors such as longer lifespans, the need for more health care with age, and the high costs of medical technologies and drugs.

Q: What are some approaches employers use to manage health care costs?

Employers use various approaches, including traditional plans with deductibles, managed care plans like HMOs and PPOs, high deductible health plans (HDHPs), and consumer-driven health plans (CDHPs).

Q: What is a high deductible health plan (HDHP)?

an HDHP is a health insurance plan with a high deductible, meaning that the plan only starts covering medical costs after the deductible has been met. These plans are less costly for employers and employees, with lower monthly premiums.

Q: What are consumer-driven health plans (CDHPs)?

CDHPs give employees more control and responsibility for their health care costs. They encourage employees to be more conscious of their health and healthcare-related decisions.

Summary & Key Takeaways

• Employer-sponsored health insurance premium costs have increased by 203% between 1999 and 2015, surpassing inflation and workers' earnings. Deductibles have also risen during this period.

• Family health insurance premiums have experienced a slowdown in the average annual increase, from 11% to 5%.

• Health care costs have risen due to factors such as longer lifespans, the need for more health care with age, and the high costs of medical technologies and drugs.