Tired of all the rhetoric? Tired of all the political side deals? Alarmed at the realization that the proposed health legislation will cost all of us dearly? So are we.

The fact of the matter is that many small businesses and individuals and families can reduce costs on their own. We have been doing this for clients for over nine years. All it takes is a simple two step process and some realization. 

The first step is to understand that the more routine expenses we ask insurance companies to pay for us, the higher our premium will get. Sounds simple, but it is often difficult to get people to understand this. So, a higher deductible will reduce the premium you pay.

The second step is to us the amount we have saved to offset the increased expenses we pay by having a higher deductible. There are two great ways to do this.

By increasing deductibles from the traditional $250-$500, and eliminating co-pays, we lower our premium costs by as much as 45%. High deductible plans limit our out of pocket costs to the amount of the deductible, typically $2500. By the way, this is generally about the same out of pocket as the traditional plan, but just more straight forward. Routine physicals and preventive measures are covered at 100%, cause insurance companies want to encourage you to practice prevention.

Take the savings and for businesses, establish a Health Reimbursement Account, and individuals set up a Health Savings Account. Put the premium savings in the account a receive a 100% tax deduction. Take money out to cover medical expenses and the withdrawal is not taxable. 

The average person spends less than $750/year on out of pocket medical expenses, yet pays thousands in premiums to make sure that the insurance company pays these expenses. Sounds wasteful, it is. The result of the two steps we describe is a savings of at least 25%. Lower claims activity also means lower renewal increases, more stability, and greater satisfaction with health insurance benefits.

This may sound complicated, but it isn’t. We are happy to help everyone understand how this works. Please contact us and we will be happy to advise you.