Health Insurance Costs
Buyer/Patient Beware.
Our program today is about health insurance costs. According to a recent healthcare survey regarding consumer healthcare concerns, increasing health insurance costs ranked second. Given recent events, we’re surprised it’s not number one. As explained in a previous post, health insurance is the primary and best tool for families and individuals to mitigate the economic risk related to medical events. Because most peoples’ experience in purchasing health insurance occurs through an employer with menus of options and straight forward processes to select coverage, knowing what to do without these tools can require a steep learning curve.
Therefore, we’re going to start with a short quiz to check your health insurance acumen.
- Co-Insurance is the amount the insured is responsible for paying for a medical visit as outlined in the policy. (True or False)
- Co-Payments usually are paid after services have been provided. (True or False)
- Out-of-Net work providers are professionals or facilities not included in your insurance company’s insurance plan. (True or False)
- The cost of health insurance is determined by providers, insurance companies and
- Every US citizen over the age of 21 is required to have health insurance. (True or False)
(The answers can be found at the end of this post).
There are a multitude of reasons to discuss health insurance. First, in 2026 employer sponsored health insurance cost for a family of four is $37,824 according to the Milliman Medical Index. This represents the largest, non-COVID, increase in a decade. Second, approximately 3 million people dropped ACA coverage between the end of 2025 and February 2026 because premium payments increased an average of 58% because government subsidies expired. Estimates indicate another increase of approximately 14% in 2027 is coming. Third, Milliman’s data shows employers’ share of premiums has dropped from 61% to 58% and employees’ premiums have increased from 21% to 27%. Because of these changes, expectations for additional cost shifting to employees are on the way in the form of larger deductibles and copays. Finally, predictions from consultants indicate a potential new form of employee health benefit for employers with under 200 employees might be the discontinuance of health insurance and replaced by stipends.
If these aren’t enough reasons, we recently noted two articles in national media outlets reflecting individuals dealing with medical issues with insurance. In one case, the individual could not afford the deductible and co-insurance and was sued by the Catholic hospital for payment. In the other case the patient owed out of pocket costs of $7,000 and used savings to cover the bill. Both individuals were very surprised and unprepared for these financial outcomes. This begs the question, why?
Some of the following may be blinding glimpses of the obvious, however, given circumstances of what lies ahead we didn’t think a refresher could hurt.
First, the healthcare consumer needs to fully understand their health insurance policy. This includes but is not limited to the following: Co-insurance amounts, Co-payment amounts, Deductible amounts, Coordinated benefit amounts, In-network facilities and providers and Out-of-network facilities and providers are a few of the most important items. If you’re employed, most employers’ human resource departments have individuals to assist employees navigate through understanding these processes and coverages. If you’re unemployed, self-employed or your employer doesn’t provide health insurance, we strongly recommend finding a reputable insurance broker to assist you. Health insurance has always been complex, however, with coming changes it’s going to be even more so and going without an advisor can result in very expensive mistakes or oversights.
Second, if employed and depending upon your medical condition(s), knowing your employer’s medical insurance coverage options is important. A wild card to consider is a stop-loss policy. These have been a very common tool used by employers having self-funded health insurance programs. The stop loss policies are protection against catastrophic cases. This option might be worth considering as supplemental protection to cover costs not covered by the employee’s base policy. This is a simple economic risk question. Given your current financial position, what is your economic risk of an event occurring causing medical costs greater than your current coverage? If your employer does not provide this type of insurance or analysis, find an insurance broker to assist you. Given aforementioned changes in the healthcare insurance marketplace. This idea while today sounds crazy might not be down the road.
Third, know what providers and facilities are in the insurance policy’s network before you obtain the policy. If you’re in a metropolitan area with numerous providers and facilities this is very important to know when selecting an insurance plan. Choosing in-network providers and facilities could mean the difference between normal out-of-pocket costs and “break the bank” level costs. Networks in healthcare are a phenomenon that has evolved during the past 20 years. As hospitals have entered the insurance business and employed their own physicians, knowing who’s in and who’s not is very, very important. If you live in a rural area without a hospital in town, then checking neighboring communities’ hospitals for in network access is crucial.
Fourth, buying health insurance is a contract. The true economic value of the contract is never known until it’s utilized. In the stories, both individuals missed some of the issues discussed above which resulted in additional personal financial costs. Therefore, before it’s needed, a certain level of due diligence is necessary. There are internet-based calculators to assist in the number crunching necessary in determining coverage amounts, out of pocket costs and coordinated benefit amounts during the insurance acquisition process. At times this work can seem very tedious, the benefits, however, can be significant. Especially if medical services are necessary. The business of healthcare has changed from the locally owned and operated community hospital, or the metropolitan hospital formerly run by a religious organization to big business dominated by a profit motive. Remember in our first story a Catholic Hospital sued the patient. Doing your homework will protect you and your family from becoming victims of the healthcare business platform.
(Quiz answers 1-T;2-F;3-T;4-T;5-F)