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 year’s plans.1
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 at $25
- Routine vision exam: $45
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
Advisory services offered through B.O.S.S. Retirement Advisors, a Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Marketing materials provided by Infinity Marketing Services.
1 Kaiser 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.
2 Michelle 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.
3 Sharon 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.