Health Insurance Rates and Premiums Demystified

No matter what you call them, health care premiums, rates, “bills,” are made up of the same things. Like many other critical services, health care costs are based primarily on how much the service costs and how much people use it. But, like anything as complicated as health care, there’s more to the story.

Rates submitted by health plans, and how those rates impact the premiums people pay, will receive significant attention. To fully understand why premiums may go up or down in 2017, consider the following factors:

Rates reflect medical costs: Medical costs make up most of the costs that go into the premiums people pay. By law, health plans must spend at least 80 cents out of every $1 of premiums on medical costs. Medical costs are higher in some places than others. Costs are higher when doctors and hospitals charge more, or when people go to the doctor more often, have more tests or fill more prescriptions. Medical costs also go up when drug prices go up (prescription drugprices jumped by more than 10 percent in 2015 alone) and often when new treatments are found.

On average, the people in plans on the public health insurance Marketplace or Exchange have been older, sicker and use more health care than people in other plans. This has been especially true for people who don’t join a plan at the start of the year, but wait and join later. This is one reason Exchange plans can cost more than plans offered through employers.

For all plans, medical costs continue to increase faster than the general rate of inflation and wage growth, and continue to be the driving force behind rate increases.

Risk pool and changes to government programs: The Affordable Care Act (ACA) included financial protections to maintain a stable marketplace and affordable premiums. However, two of the three programs that provided this financial protection now are set to end in 2016. When these programs go away, premiums need to rise even more.

So how do we make premiums more affordable? At Aetna, we’re working in many ways to help hold down our members’ costs. We’re working in new ways with many doctors, hospitals and health care systems so they get paid for the quality of care, not the quantity of services. We’rereaching out to members earlier to address potential health issues, so they can enjoy more healthy days. We’re emphasizing preventive care and cost-effective treatment locations in our benefit plans. And we’re giving members better online tools to understand their plans, find doctors and hospitals and estimate how much care will cost them. We’re even creating new kinds of health plans, such as our Leap plans that help remove barrier to care for people with chronic conditions. All of these things help hold down costs for people.

That’s not all. You can start by reading what Aetna is doing to build a better health system.

Brought to you by AETNA. Read More @: https://news.aetna.com/2016/06/health-insurance-rates-and-premiums-demystified/

Tags: affordable care act, consumers, health care costs, health plan rates, insurance rates, medical costs, personal health, quality care

Unexpected Costs of Medicare

The Unexpected Costs of Medicare

With a little planning, seniors on Medicare can minimize their out-of-pocket expenses.

Seniors can save hundreds – or even thousands – on Medicare costs through careful planning.

By Joseph P. WilliamsOct. 15, 2014, at 8:00 a.m.+ More

​Created in 1965, Medicare was intended to answer growing reports of impoverished seniors languishing or dying because they lacked health insurance. Since then, Medicare has acquired a reputation as the ultimate government entitlement, a system of low-cost, taxpayer subsidized health care provided at the stage in life when retirees need it most.

[Read: What You Need to Know About Medicare Open Enrollment.]

But the broad-reaching health care insurance system comes with costs that many seniors – including those already using the plan – don't see until the bills show up. Those out-of-pocket expenses, according to experts, can range from hundreds of dollars in monthly premiums and office visit copays to six-figure bills for surgery and hospitalization for things like joint-replacement operations, a procedure common among older Americans.

Those costs, which add up quickly, can stress or even break a household budget, particularly for retirees getting by on fixed incomes. Even declining to sign up for Medicare when you first become eligible, experts say, can cause a lot of pain in the wallet later on.

"A lot of people looked at Medicare as this Promised Land – 'Everything is covered, until the end of time,'" says Nicole Duritz​, vice president of health education and outreach for AARP, a nonprofit advocacy group. "I don't think people have a great understanding of how the system works. They're surprised at how much they'll have to contribute."

Compared to individual or group health insurance plans, "Medicare is unique in that it has no out-of-pocket spending limits," says Nancy Metcalfe​, a health policy analyst at Consumer Reports.

That's because Medicare plans are typically private health insurance policies that are government-subsidized. Nothing is completely covered, and no expense is 100 percent paid for. Though the subsidies paid to the insurance companies help keep costs low for seniors, the plans vary and usually require beneficiaries to pay some premiums.

There's good news, however: Metcalfe and others say a little planning, homework and realism can go a long way toward helping Medicare consumers keep more of their hard-earned money in their pockets.

That means seeing past the monthly premium payment to take a hard look at what may be some uncomfortable things – including a realistic assessment of your finances, anticipating how healthy you'll be during your sunset years and choosing what services you might need in a worst-case scenario.

Updated on Oct. 15, 2014: This article was originally published on Oct. 18, 2013 and has been updated to reflect new costs.

Visit Health News to Learn More: http://health.usnews.com/health-news/medicare/articles/2014/10/15/the-unexpected-costs-of-medicare

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