What is Not a Recommended Strategy for Controlling Your Health Care Costs?

Health care cost is something to watch out for and regulate, especially over time. Significantly, health care costs rise due to the rise of various commodities and value for offered services due to the economically-driven factors.

As such, there is a need to know the expenses that need to be controlled, and the strategies that people need to employ to make the most out of the available resources.

The cost of health care is one of those services that rise almost every year. The expenses of the United States on health care exceeded $2.3 trillion in the year 2008. This is more than thrice the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980. Knowing what causes this growth has become a major policy priority since the government, employers, and consumers struggle more and more to keep up with the costs of health care.

In 2008, the spending in health care of the US was about $7,681 per resident, and this accounted for 16.2% of the gross domestic product (GDP) of the nation. This was said to be the highest of all industrialized countries. The expenditures on total health care developed at a yearly rate of 4.4 percent in 2008, which is lower compared to recent years. However, this still outpaces inflation and the national income growth. Without reform, there is a general agreement that costs on health are likely to continue to add up in the future. Many financial analysts have stated that controlling the costs of health care is key to achieving better economic stability and development.

Even though Americans gain from investment in health care, at the current rate of increase in cost, together with the overall slowdown of the economy and rise in federal deficits place huge strains on the systems used to finance health care. Since 1999, premiums for the family on employer/group-sponsored health insurance coverage grew by 131 percent, placing rising cost burdens on employers or groups, workers and members.

As such, it is only proper to come up with strategies to control the costs of health care. Some have shifted more of the cost to the employees or members through higher deductibles and co-payments. Others tried to regulate costs by slashing the benefits and looking more aggressively for less expensive coverage for health care. Still, others have presented programs to administer and prevent disease in order to avoid trips to the doctors which cost a lot. Although these approaches somehow support the move to control the costs of health care, these are not recommended.

Here are several tips that will help regulate the increasing costs: first, if one is currently under a group health insurance policy, one should keep it in “grandfathered” status. This will help avoid getting a plan that contains new regulations and may have higher premiums. Second, one should regard shifting to a consumer driven, high deductible plan. This will be a preferred and cost-effective model in 2015, when there is a shift in the market. Third, consumer-driven, high deductible plans should be used for individuals who are not a part of a group health insurance plan. This can be done on a tax-favorable basis for a worker with or without employer contribution. These plans are underwritten for health, and thus, they are usually much less expensive than group health insurance plans. Fourth, if one does not provide benefits for health insurance but is considering dropping on a group plan, then one can consider a Defined Contribution Plan. These plans permit the employer to set a regulated budget by setting fixed contributions for workers.