The Health Insurance Marketplace open enrollment season has
begun (Nov. 1 through Dec. 15) for people who do not have access to health
insurance plans at work. For the 2020 plan year, 20 more insurers have entered
the federal exchange market and the average premium dropped by 4% from last
Employers see strong health care benefits as a strong
incentive for recruiting purposes in today’s competitive job market. Some are
offering a broader array of options, with less reliance on the high-deductible
health plans (HDHP) that have become a staple cost-savings measure in recent
years. According to a large-employer survey by the National Business Group on
Health, only a quarter of companies plan to make an HDHP their only offering, a
14 percentage point decline from two years ago.2
Despite this good news, health care continues to be a major
expense for most Americans and is expected to continue until some of our bigger
problems with the nation’s health care system are addressed. Even people who
are eligible for Medicare find that out-of-pocket expenses add up. According to
Fidelity, the average retiree spends about 15% of annual income on health care-related
expenses.3 It is important to consider how you will pay for possible
increased health care expenses in retirement. Some insurance products such as
life insurance and annuities provide various options you may want to consider. We’d
be happy to discuss your options based on your unique situation.
In the ever-growing effort to battle health care expenses,
some employers are developing alternative options. For example, Amazon,
Berkshire Hathaway and JPMorgan Chase & Co. joined forces to create a
health care company (Haven) to serve their combined 1.2 million employees and
family members in the U.S. The company is not yet up and running, but its
objective is to provide primary care access, more simple insurance benefits and
affordable prescription drugs.4
For people who are looking for affordable health care
services regardless of insurance status, Walmart recently introduced its first standalone
primary care clinic (Walmart Health), located in a suburb of Atlanta. While the
retail giant has opened in-store Care Clinics at other locations, this expanded
office provides dental services, lab tests, X-rays, hearing, optical and mental
health counseling.5 Better yet, the services are offered at fixed
prices, such as:6
- Office visit: $40
- Strep test: $20
- Dental Exam
(including X-rays): $25
- Teeth cleaning: Starting
- Routine vision
Some savings have also been generated in recent years by
health industry initiatives that received funding through the Patient
Protection and Affordable Care Act. Accountable Care Organizations (ACO), which
are local collaborations between hospitals, physicians and other health care
providers, have managed to reduce Medicare spending. Recent data analysis from
the Centers for Medicare and Medicaid Services found that the 548 ACOs nationwide,
serving 10 million members, yielded $739 million in savings in 2018, more than
doubling the $314 million saved the prior year.7
Maternity care is the latest example of specific-condition
services being bundled for a flat fee. Some insurers are testing the idea of
paying a physician a fixed amount for all care and procedures in an effort to
reduce costs while improving the quality of care for pregnant women. This
bundled price, however, would not include hospital expenses.8
prepared by Kara Stefan Communications.
Health News. Oct. 24, 2019. “Health Law Premiums Drop For Second Straight Year
And More Insurers Enter Fray As Marketplace Corrects Itself.” https://khn.org/morning-breakout/health-law-premiums-drop-for-second-straight-year-and-more-insurers-enter-fray-as-marketplace-corrects-itself/. Accessed Oct. 31, 2019.
Andrews. Kaiser Health News. Oct. 29, 2019. “Employers Are Scaling Back Their
Dependence On High-Deductible Health Plans.” https://khn.org/news/employers-are-scaling-back-their-dependence-on-high-deductible-health-plans/. Accessed Oct. 31, 2019.
Epperson and Jessica Dickler. CNBC. Oct. 7, 2019. “Here’s how to keep
health-care costs down in retirement.” https://www.cnbc.com/2019/10/06/heres-how-to-keep-health-care-costs-down-in-retirement.html. Accessed Oct. 31, 2019.
4 Fox Business. March 7, 2019. “Amazon, Berkshire,
JPMorgan healthcare company to be called Haven.” https://www.foxbusiness.com/healthcare/amazon-berkshire-jpmorgan-healthcare-company-to-be-called-haven. Accessed Oct. 31, 2019.
5 Knowledge@Wharton. Oct. 15, 2019. “Will Walmart’s
Health Care Gamble Pay Off?”
https://knowledge.wharton.upenn.edu/article/walmart-health-care-gamble/. Accessed Oct. 31, 2019.
6 Walmart Health. Sept. 11, 2019. “Summarized Pricing
List for Dallas, GA Store #3403.” https://i5.walmartimages.com/dfw/4ff9c6c9-cc08/k2-_5dbef86c-f434-4f3b-86da-82c091e3037f.v1.pdf. Accessed Oct. 31, 2019.
7 Stephanie Goldberg. Crain’s Chicago Business. Oct. 18,
2019. “Find out which local hospitals are saving Medicare real money—and which
aren’t.” https://www.chicagobusiness.com/health-care/find-out-which-local-hospitals-are-saving-medicare-real-money-and-which-arent. Accessed Oct. 31, 2019.
8 Carmen Heredia Rodriguez. Kaiser Health News. Sept. 27,
2019. “Insurers Test New Way To Cut Maternity Care Costs: Bundling.” https://khn.org/news/maternity-care-bundling-payments-insurance-cesarean-sections/. Accessed Oct. 31, 2019.
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strategies using a variety of insurance products to custom suit their needs and
objectives. This material is intended to provide general information to help
you understand basic retirement income strategies and should not be construed
as financial advice.
The information contained in this material is believed to be reliable,
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