Under the current health insurance system and until the new law takes effect in 2014, it is the most difficult to get insurance when you try to purchase it as an individual or family (as opposed to getting the coverage through your employer).   In the “individual market” people are routinely denied coverage for certain conditions or denied coverage altogether for a long list of preexisting conditions.

Why Do Companies Deny Health Insurance Coverage?

While this practice makes insurance companies appear heartless, the practice has historically existed to help keep insurance rates lower for other customers and to keep the insurance company solvent.  If a person with any physical aliment could buy insurance at any time, many might wait until they are very sick to buy insurance, generating large medical bills.  The way insurance works today, the customers’ premiums are pooled together to collectively cover everyone’s health care expenses.  This helps the insurance company spread the risk and ensure the solvency of the pool.

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The rising cost of family health insurance has dramatically outpaced that of family incomes, as you can see in this historical graph.

The President really has his work cut out for him lately selling health care reform; it is hard for the average American to get excited about the new law when those who buy their own coverage are facing a 20 percent increase in their health insurance premiums.  Those covered by their employers (in the “group market”) have seen their rates rise as well.  If we have finally started to fix this mess why is health care getting more expensive not less?

So Why are Health Insurance Costs Going Up?

The answer is simple and complex at the same time.  At the most basic level, health insurance premiums are going up because the cost of health care is rising.  And during this recession people who don’t need a lot of care (the “young and healthies”) are opting to forego coverage, making the current pool of insured in the individual market older and sicker on average.  A slightly more sinister explanation is that insurance companies may be playing off consumer fears of health care reform, and trying to make strong profits before several provisions in the new law actually take effect.

But sticking with the most basic explanation for a moment, why do health care costs continue to rise?  The answer to this question is less simple.  Many experts believe our health care system continues to provide care that is excessive, ineffective or even unneeded.

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The growing trend of high-deductible health plans for employee health coverage could be a troubling sign that the quality of coverage through employers is declining.

The days of 100% health insurance coverage by employers are long gone. Employees all over the nation contribute nearly 20% to their employer-sponsored health care packages. For those employees who currently complain about the amount of their health care contributions, brace yourselves. Your employer may be looking to grab a higher-deductible health insurance option as a means for them to save a few dollars in a still-struggling economy.

A little high-deductible health plan history

Higher deductibles aren’t a new thing. Since 2003, high-deductible health plans have been working their way into the health care industry. Most have an average deductible rate of $1,200.00 for individuals and $2,400.00 for a family plan. The logic behind the high deductible is that it is supposed to serve as an incentive for people to make wiser choices for their individual health needs, and not run to the emergency room for every little ache of pain. For employers, the higher deductible rates mean lower premium costs, and this reasoning is catching on.

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Health insurance reform has helped making an "apples-to-apples" comparison between health plans much easier.

Anyone who has ever tried to buy health insurance as an individual knows it is just not as simple as purchasing other goods and services.  It is easy to compare a Delta flight to New York to a United flight to New York based on price, when both start and end at the same destination.  Both come with a seat, and these days — if you are lucky — probably a soft drink and maybe even some peanuts.

The trick in purchasing health coverage is that it is very difficult to make apples-to-apples comparisons between plans, especially just based on price.  The plan with a cheap monthly premium may actually have a much higher deductible—and end up being much more expensive in the long term.  Two plans may look very similar and be comparably priced; but one may cover maternity care, while the other does not. That can be tough, especially for the consumer who only learns this after she becomes pregnant.

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Health and Agriculture have different goals in sight - one wants us to eat unhealthily, while the other - because of recent reforms - will want us to eat more healthy.

The next time you’re trying to decide which grocery store has the lowest prices, you might want to look at the waistline of its shoppers.  If the person in line behind you is very overweight, the store might just be a bargain, or so says a new study from the University of Washington. However, health care reform could mean a big change in the makeup of your grocery store. Why? Find out below.

The Relationship Between Health and Grocery Budget

The relationship between one’s grocery budget and waistline is complicated. Research shows that higher income people may have more free time to visit multiple stores, buy specialty foods, shop based on quality (not quantity), and prepare nutritious meals.  But research also shows that poor quality, high-calorie foods are cheaper.

This comes as no surprise to anyone who has ever eaten lunch at McDonalds from the value menu.  But we often don’t understand the reasons why high calorie, low nutrition food is so cheap. The reason is that our public policies are designed to support industries that produce high calorie foods in mass quantities.  Under the Farm Bill, the largest dollar amount of U.S. Department of Agriculture subsidies go to supporting corn. (For anyone who has ever followed the Iowa Caucus, it is immediately clear how powerful the corn lobby is in this Country).

Corn Syrup and Health

Lots of corn creates lots of high fructose corn syrup—which makes foods sweet and calorie rich for pennies on the dollar.  The USDA also subsidizes cotton, soybeans, rice and wheat.  Absent from that list is vegetables.

A map depicting levels of obesity across the United States. Notice that states with the most obese population are generally closer to the Corn Belt.

To help even out prices between our grocery stores and the difference between our waistlines, the U.S. may need to figure out a way to make healthy food cheaper, or unhealthy food become more expensive.  Some pundits have started to argue that the only industry powerful enough to take on the agriculture industry might be the health insurance industry.  Because the new health care reform law mandates health plans cover everyone, plans will have to cover the thin and healthy along with the obese and unhealthy. When that starts to mean even higher health care costs and a bite out of health insurance industry profits, we might see health insurance and “big ag” go head to head.

Congress is in recess, and – as was expected – the bill that would have extended COBRA was allowed to lapse.  As of June 1st, the federal government will no longer subsidize COBRA premiums.  What does this mean to you, as a health insurance consumer? Read on to learn more.

What is COBRA Coverage?

COBRA is a form of protection for individuals who become unemployed and have their health insurance benefits taken away as a result. It was first introduced in 1986, under the Consolidated Omnibus Reconciliation Act passed during the Reagan administration. Since then, millions of unemployed workers have had the opportunity to retain the coverage that was provided to them by their former employer.

In 2008, when the economy took a nosedive, millions of people became unemployed (the best estimates show that a record 10 million are collecting unemployment insurance and half of the 15.3 milion jobless Americans have been unemployed six months or longer). The newly elected Obama administration stepped up to the plate and added government subsidies to help cover the cost of COBRA through the American Recovery and Reinvestment Act of 2009.

Under the ARRA, COBRA was provided at a 65% discount to the unemployed. What this meant was that a typical COBRA plan (which would have cost a family in California $1,107 a month and 82% of their unemployment check) would have cost only 35% of the actual cost of the plan – or about $390 for a family. The subsidy finally made COBRA affordable for most American families.

What’s Changed about COBRA Subsidy?

As of June 1, 2010, anyone who becomes unemployed will no longer receive subsidized COBRA coverage. This means that you will need to pay the full premium for coverage, which could total more than 3/4th of your unemployment check! Unfortunately, Congress is in a fiscally conservative mood, so you won’t be able to take advantage of any more federal subsidies.

However, the good news is that there are essentially dozens of alternative health insurance options within your reach. The thing most consumers may not realize is that COBRA is priced as group coverage – and it often includes coverage that you may not need as a family. You can take advantage of drastically lower rates simply by opting for a private health insurance alternative. All you have to do is click here to request a free quote!