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VOL. 127 | NO. 111 | Thursday, June 07, 2012

Dana and Ray Brandon

You Could Soon Determine Health Insurance Costs

By Ray and Dana Brandon

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Ray’s Take A generation ago, corporations pushed the responsibility for retirement planning onto employees by dropping pensions in favor of 401(k)s. While the jury is still out on how this is working, it looks like the next frontier may be health care.

At this point, some company health insurance plans require employees who smoke to pay more for their coverage. Next could very well be higher premiums or co-pays for excess weight or other conditions and habits deemed non-healthy.

Keep in mind this is not the government telling us what to do. It is driven more by global competition. Lost productivity due to health-related issues is a huge factor in this country. In addition, both legal and illegal drug use drag down domestic productivity. There are a lot of potential employees in the world willing to work harder for less. Also of importance, corporate-provided heath insurance is usually not a factor as so many countries have socialized medicine.

Right now, the U.S. has the highest per capita health care expenditure of any country, and that cost is growing at over two percent each year. Companies carry a lot of that expense burden by completely or partially underwriting their health insurance programs and their costs have risen 29 percent since 2009.

No wonder 32 percent have or will soon introduce financial incentives to improve wellness, with another 30 percent seriously looking at that option. But the big news is that 45 percent are considering introducing or increasing penalties for employees who do not make lifestyle changes for healthier lives. For generations we have been largely insulated from the financial consequences of most of our health choices. The time is coming when we’re going to have to start taking more responsibility for them.

Dana’s Take Ray has increased the deductibles on our health insurance to reduce the premiums. Going to the doctor now costs us more “out of pocket” and each prescription costs us more.

Staying healthy puts money in our pockets. If one of us becomes ill, the money we plan to spend on a vacation could go to our family deductible. We would all rather lie on the beach than lie in a bed in the ICU.

So what can we do about it? Ray and I can walk every day for 30 minutes to an hour. Our family can buy more fruits and vegetables and fewer Cokes and French fries. We can play tennis instead of Xbox. Each choice can save us on medical expenses. The side bonus is that we improve our chances of feeling better and living longer.

Daily habits can make us healthy and wealthy. Or not.

Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.

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