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The Alternative is

The Alternative is. Consumer Driven Health Insurance. Proprietary Information of Lee Benham and Associates. Permission Required for all distribution. Where are American’s getting their health insurance?. 80% of Americans get their health insurance through work.

ashely-caldwell
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The Alternative is

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  1. The Alternativeis Consumer Driven Health Insurance Proprietary Information of Lee Benham and Associates. Permission Required for all distribution.

  2. Where are American’s getting their health insurance? • 80% of Americans get their health insurance through work. • Employer subsidized health insurance causes people to not understand it’s true cost.

  3. What’s wrong with that? • Insurance companies add options into policies that are a waste of money! • Terminology is being used to confuse people!

  4. Confusing the Consumer $1000 Deductible $1000 Deductible $1000 Deductible 90/10 Co-Ins 80/20 Co-Ins 50/50 Co-Ins Which Looks Better? 10% of $10,000 20% of $5,000 50% of $2,000 $1,000 $1,000 $1,000 What is the total out of pocket for each of these? $2,000 $2,000 $2,000

  5. Family Example • 40 year old male, non-smoker 40 year old female, non-smoker 2 kids • Zip Code: 68133

  6. 80/20 To $5,000.00 $500 Deductible $1000 Co-Ins $1500 Max Out of Pocket $779.57 x 12 months= $9354.84 Max out of pocket +$1,500.00 Total Yearly Risk $10854.85 50/50 To $2,500.00 $1000 Deductible $1250 Co-Ins $2250 Max Out of Pocket $487.28 x 12 months=$5847.36 Max out of pocket +$2,250.00 Total Yearly Risk $8097.36 Example Yearly Costs 50/50 To $2,500.00 $500.00 Deductible $1250 Co-Ins $1750 Max Out of Pocket $647.73 x 12 months=$7772.76 Max out of pocket +$1,750.00 Total Yearly Risk $9272.76 50/50 To $2,500.00 $1500 Deductible $1250 Co-Ins $2750 Max Out of Pocket $422.26 x 12 months=$5067.12 Max out of pocket +$2,750.00 Total Yearly Risk $7817.12 • 50/50 To $2,500.00 $2500 Deductible $1250 Co-Ins $3750 Max Out of Pocket $343.5 x 12 months=$4122 Max out of pocket +$3,750.00 Total Yearly Risk: $7872 As you can see, there is very little difference between plans!!!

  7. Your Actual Costs • Lets run these quotes on you and see the actual numbers.

  8. Options • Doctor’s Office • Co-Pay • Health Insurance is expensive. • Paying $20 or $30 at the doctor seems like a bargain. • The Reality, it’s a giant waste of money!

  9. How It Really Works • How many times does an average family of 4 go to the doctor in a year? • 4, 5, or maybe 6 times • What does a doctor’s office visit actually cost? • $70 - $80

  10. How It Really Works • Let’s assume this family has a $1,000 deductible. With a 50/50 Co-Ins up to $2,500 • This Family has a really bad year and they go to the Doctor 20 times and each visit costs them $100. Visits Doctors Charge Total Deductible 20 x $100 = $2000 $1000

  11. The Deductible Visits Doctors Charge Total Deductible 20 x $100 = $2000 $1000 If you are the one paying the office visit, then the cost would go towards your deductible, so after the first $1000, your deductible would be satisfied. Visits Doctors Charge Total Deductible 20 x $100 = $2000 $1000 You Pay $1000 SATISFIED!

  12. The Co-Ins Visits Doctors Charge Total Deductible 20 x $100 = $2000 $1000 You Paid Deductible $1000SATISFIED! You Pay Co-Ins $500 Insurance Pays (50%) $500 Total $2000 So, for this example you have paid $1500 and the Insurance Company paid $500, BUT THE YEARLY DEDUCTIBLE HAS BEEN SATISFIED.

  13. Lets Add The Doc Option • First Replace the words co-pay with the words Penalty Payment • When the co-pay is made to the doctor, the amount does not go towards the deductible or the co-insurance. It is just extra money out of your pocket. • Remember: Insurance Companies aren’t in the habit of losing money. So what they have set up here is a smoke and mirror cost shift. Where you the consumer are guaranteed to pay more than you can ever collect.

  14. The Cost of Co-Pay • The Doctors Office Co-Pay option by itself costs $178 per month $178 x 12months = $2136 in premiums And 20 visits x $30 per visit = $600 in penalty payments The Total Doc Co-pay + Premium is $2736. Thiswould have only cost you $1500 ……. if you paid it yourself!

  15. When do you come out ahead? • NEVER!! • It does not matter how many times you visit the doctor when using a co-pay, you will never come out ahead. • Why? The cost is never going towards your deductible.

  16. Prescription Co-Pays • These work the same as other deductible plans. • A $500 deductible with 10/25 co-pay is part of the base plan. • BUT…you have the option of buying the card down to $0.

  17. The Math • Insurance companies immediately see potential claim losses of $500 as well as administrative fees. How much is this savings going to cost you? Deductible: $500 $0 Your Cost: $0 $181/month Total: $500 $2172

  18. The Cost of Saving Deductible: $500 $0 Your Cost: $0 $181/month Total: $500 $2172 You are spending $2172 to save $500. Now that you understand the cost, who in their right mind would do this?

  19. What is the SOLUTION ? • An Educated Consumer • An Empowered Consumer • An Enlightened Consumer • AND……

  20. Health Savings Account (HSA) • The HSA simplifies the consumers choices when buying a Health plan. • You the consumer, know what is best for your family! • How are you going to spend your hard earned Dollars?

  21. Understanding How an HSA Works • There are two moving parts to an HSA. There is the Health insurance portion and the cash portion. Your cash $ High deductible insurance plan

  22. Health Insurance portion • In order for you to have an HSA. You must first establish a high deductible health insurance plan… • A high deductible insurance plan must have an individual deductible of at least $1000 up to a maximum of $5000. • Family deductibles range from $2000 up to a maximum of $10000. • The current maximum contributions for an HSA are $2650 for individual $5250 family.

  23. Cash Portion • Only after you have established a high deductible health plan. • You can then place up to 100% of your deductible into a tax free cash account. • These are the funds that you may use to pay your health care expenses. • If you do not have any health expenses you keep the money.

  24. Comparing Plans • Lets go back and look at the 50/50 plan to $2500 with the $1500 deductible. • This is a $2750 max out of pocket. • This is times two for a family with a total family max out of pocket of $5500 • Cost of this plan is $5067.12 per year. • Total family maximum risk is $10567.12

  25. Comparing Plans • Now lets look at an HSA plan with a family deductible of $5250. • The coinsurance is 100%. • The cost of this plan is $3613.44 per year. • The risk factor for the family is now $8863.44 • The family risk factor drops by $1703.68

  26. Deductible $3000 Co-Insurance $2500 Total $5500 Cost $5067 Risk $10567 $5500 max out of pocket is a after tax out of pocket. Deductible $5250 Co-Insurance $0 Total $5250 Cost $3613 Risk $8863 $5250 max out of pocket is now pre tax out of pocket Side By Side Comparison

  27. Consumer Driven Plan • By Taking the savings in premiums from the traditional plan and placing them in an HSA account. • The consumer is paying themselves instead of paying the insurance companies. • Creating a Tax deduction even if the funds are not needed. • Lowering their yearly risk factor if they due become sick or injured. • Controlling there own funds. By paying only if and when they need their health program not every month in the hopes that they will.-

  28. IS There A Downside • Yes there is a down side to an HSA. • The down side to an HSA is in the first few months of an HSA people have not had sufficient time to fund their savings.

  29. Is There A Solution • Absolutely • By using insurance wrap around products. Clients will be able to fund their HSA’s with funds from other companies indemnity products.- • Clients purchase small Accident, Critical Illness, and Hospital Indemnity polices from other carriers, • This spreads the risk over several companies and drives the cost down even further.

  30. Example • 40 year old couple with 2 kids in 68133 area code. • HSA health plan. Monthly cost $232.50 • HSA contribution $25.00 • Accident policy with Hospital cash option rider. Monthly cost $32.41 • $5,000 Critical Illness policy monthly cost $17.06 • Total monthly cost of all plans $306.97

  31. You Now Have The Power • Now You Are An Educated Consumer! • Now You Are An Empowered Consumer! • Now You Are An Enlightened Consumer! • How Are You Going To Spend Your Hard Earned Dollars?

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