Major medical cost

Average annual workplace family health premiums rise modest 3% to $18.142 in 2016; more workers enroll in high-deductible plans with savings options over the past two years. The costs in a typical company plan are $12,865 for the company and $5,277 for the employee. A person can purchase a major medical plan sometimes called catastrophic insurance for about $3,000 per year for a $10,000 annual family deductible plan. This means you pay out of your own pocket all of your health care cost up to $10,000 for your family each year. Everything over $10,000 is paid by your insurance. This type of insurance is purchased by wealthy individuals who can afford to self-insure for most of their health care needs. This type of plan can also save money for employees of companies who have group insurance plans. The company buys a major medical plan for you and your family at a cost of $3,000 and then the company puts $10,000 into your health savings account. This is after tax money that grows tax deferred and is used tax free for health care needs. Now instead of spending $18,000 per year between employee and employer they are now spending only $13,000 for a savings of $5,000 per year. Any money left over at retirement could be used just like 401K money. The $5,000 annual savings is generated by lower administrative (paper work) cost. Since over 90% of claims are less than $10,000 While the dollar savings are considerable there are other advantageous. Since consumers get to keep money they don’t spend they will shop around for healthcare and competition will help to lower prices. Look at what happened to Lasik surgery. A few years ago it was $5,000 and now it is less than $500. The same thing is currently happening to dental implants. The providers are pleased to get paid for their service on the spot, without having to file claims and wait 3 months to get paid. This idea is currently going nowhere because it eliminates most insurance companies. Only one or two large companies would remain to handle the claims over $10,000.