The Health Insurance Coach

We are all aware that by opting for a more affordable health insurance plan we might end up with a higher deductible, or less coverage. But as more and more Americans are discovering, spending caps on health coverage could be the least known, and most dangerous, clause in your contract.

As health care costs continue to rise, one way that employers are able to save money on their premiums is to offer a more affordable health insurance plan that includes a cap. Around one third of workers have a lifetime medical coverage cap of $2 million or higher, and 22% have caps that are lower.

And while it may seem that $1 million is a lot to most people, as it's made clear at azstarnet.com, the soaring costs of medical care mean that those bills rack up very, very fast.

There are different types of caps applied to insurance, including lifetime caps, annual caps, prescription caps, and caps per illness. In every case reaching that cap means that the person in question, usually someone who is very sick, no longer has coverage.

For those people searching for an affordable health insurance policy, it's always good to ask whether or not your policy has a cap and what type it might be.

As those individuals in the article have discovered, running out of coverage when you need it the most can prove devastating.

Much has been made of John McCain's suggestions regarding small business health insurance, individual coverage, and taxes. McCain's plan would involve removing tax breaks for employers who offer coverage, and offering refundable tax credits instead to those individuals who opt to pay for coverage themselves.

Critics argue that this would lead many employers to abandon small business health insurance policies, particularly if health coverage would no longer be a lucrative means of attracting workers.

On the other side, we have to admit that fewer and fewer employers can afford to offer insurance these days. Premiums have risen so quickly in recent years that many employers can't afford to offer coverage, or can't afford to offer very good coverage at any rate.

But then there's also the issue of the splitting of markets, as it's addressed at Kaiser's Daily Health Policy Report. If healthy, younger employers can save money by switching to individual coverage, then only older or less healthy employees will continue to rely on small business health insurance polices.

This could lead to a situation where employer based insurance costs would actually go up, and individual costs would go down (but only for those who could qualify for such policies).

Whether or not employers would drop their policies is its own argument, with some believing it won't happen while others say it absolutely will. But, with no restrictions on the denial of coverage to those with pre-existing conditions, it's likely that the probable boom in individual health insurance would leave many people unable to qualify for health coverage at all.

Massachusetts health insurance is facing both ups and downs, as the state's mandatory coverage laws run up against growing costs.

On the up side, according to Kaiser's Daily Health Policy Report, since Massachusetts health insurance became a legal requirement enrollment in health coverage has jumped, and the number of uninsured adults has decreased to about 7% of the population.

There are about 355,000 newly enrolled residents in the state, some enrolled with help from state subsidies, some on their own, and some through employer-sponsered plans that were a requirement of the new Massachusetts health insurance laws.

But there are down sides, and they're expensive. The law was expected to cost $472 million in the first year, but because of higher-than-expected enrollment in government-sponsored programs, the actual cost was $625 million. State costs are thus going up for next year, as are the costs paid by residents.

The report states that "monthly premiums for partially subsidized coverage increased by an average of 9.4%" and for those purchasing private coverage costs will increase by about 5.1%.

Lawmakers argue that the goal was always to make Massachusetts health insurance a legal requirement first, and then figure out the costs later. This would then force "the political leadership, doctors, hospitals and health insurers to grapple with how to make this affordable."

Hopefully, that's exactly what will happen in the coming months, making Massachusetts an example of how to manage health care for the rest of the country.