News Alerts

Your Health Care: What IS Covered?

Last week, President Obama met with the Council of Economic Advisors to review their analysis of the economic impacts of health care reform. With health care expenditures at 18% of GDP and estimates projecting them to be at 34% of GDP by 2040, slowing the cost growth is essential to the well being of health care in the United States.

Most individuals probably don’t care about health care to GDP ratios. As health care is becoming increasingly more expensive to employers, and therefore to employees, a larger portion of compensation will be required to fund an employee’s portion of employer sponsored health insurance. Further, although employer contributions have previously not been taxable to employees as a benefit, this too could change.

Re-engineering the health care system is complex, costly, and will involve significant shifts in the delivery of healthcare and the behavior of the consumer. It will not happen all at once, but over time. We certainly can expect to see some change this year, but how significant remains to be seen.

What remains critical is that individuals understand their health insurance coverage and what is available to them. In order to know whether coverage is adequate, an individual must consider if he/she is covered for:

  • “Reasonable and customary expenses”
  • Catastrophic care
  • Lifetime expenses
  • Medications
  • Other services that an individual believes are “medically necessary”.

Most people are unaware of what will be covered by health insurance. In fact, many aren’t certain of the exact terminology of the health care world.

As a wealth manager, you should insist that your clients review their health insurance so that they can plan for potential expenses in the future. As an employer, provide your employees with the necessary information to select the appropriate health insurance plan and factor that into their overall financial plan.

Consider designing a health care roadmap for your clients or employees. For additional information, contact EAB HealthWorks.