Wednesday, April 30, 2008

Health Care and Marraige

Health care in America can be expensive. However, it can be more expensive if you don't have insurance. The convenience factor goes way up of getting coverage is better if you are married versus being single, and is available more readily to those who get married as a qualifying event. The Wall Street Journal has reported this week that 7% of Americans said that in the past year they or someone in their household decided to tie the knot mainly so one spouse would be eligible for the other’s health coverage. That astonishing figure came from a survey out today from the Kaiser Family Foundation, a nonprofit group that looks at health policy issues. Is marrying for health-care convenience the new marrying to get a Green Card?

There are 114 million households in America, according to the Census Bureau. But the Kaiser survey suggests that in 7% of those households — about eight million total — someone decided to get married in the past year mainly because of health benefits. But the total number of marriages in 2005, the most recent year for which complete national figures are available, is only 2.25 million, according to the National Center for Health Statistics. That puts the total number of people who get hitched — for love, for money, for health insurance, for whatever — at about 4.5 million every year. According to MarketWatch, overall, changes in the economy and the public's growing insecurity about health-care costs are laying the groundwork for nationwide reform, but it's far from a sure thing.

Some people marry for love, some for companionship, and others for status or money. Now comes another reason to get hitched: health insurance. According to a similar article in the Los Angeles Times, a companion poll also detected an important shift among voters: Independents in particular say they are more concerned about reducing medical costs than about increasing the number of Americans with health insurance. Paying for healthcare is reflected not only in family budgets but in life decisions as reported by Kaiser in the press release. Healthcare inflation has been rising at about twice the rate of economic growth, and it's unclear how much of a difference better prevention, computerized medical records and other ideas for containing costs might prove to be. What surprised researchers was that health care costs had become a factor in marriage decisions. Also, they reported that most employers do not offer health insurance to unmarried domestic partners of employees.

The Los Angeles Times article went on to say that with employer-based health insurance averaging $12,000 for family coverage and $4,500 for individuals, the public concern with costs is understandable. Nearly 25% of Americans said they had decided to keep or change jobs in the last year because of health insurance. Those who cited health insurance as a factor in deciding to marry tended to have modest incomes. About 60% of those who responded were in households making less than $50,000 a year, and about 40% were between the ages of 18 and 34. The Kaiser survey also found that healthcare costs outranked housing costs, rising food prices, and credit card bills as a source of concern. Of those surveyed, 28% said they had experienced serious problems because of the cost of healthcare.

Choosing health insurance can be very confusing. The health costs surrounding injury or illness can be catastrophic to a family's finances. After you are married you should take time to review your individual health coverage to ensure you're properly protected. Millions of Americans go without health coverage every year, which can be a very risky decision - especially in the case of a sudden medical illness or injury. Going without health coverage can quickly become a risk that doesn't need to be taken. You and your family's health is important and a lack of health coverage can be financial and emotional strain. Even with a standard medical plan, out-of-pocket expenses (including co-payments, cost shares, and pharmaceutical costs) can add-up quickly and become a financial burden according to the Armed Forces Benefit Association.

The information about getting married and considering the insurance reasons as noted on is also some good advice. A good employer health insurance plan is hard to come by. If one of you doesn't have health insurance or if one partner's plan is superior to the other's plan - or even less expensive - then tying the knot could be a smart move. And if you are single as a Senior and getting married over 60, that can have benefits! Also consider your retirement expenses. Health insurance is one of the costliest line items for retirement budgets. If one of your employer plans pays for a spouse's health insurance in retirement, that is a potential savings of thousands of dollars a year.

The American Institute of Certified Public Accountants reports that when you and your spouse are making health insurance decisions, it may be useful for you to focus on three key areas: (1) the out-of-pocket cost of each plan, (2) the levels of service and coverage offered, and (3) the coverage offered to any dependent children, if applicable. Employers will sometimes pay some or all of their employees' health insurance premiums. If this is true in your case, there may be no reason to consider a change in your health insurance plans. If you pay the premiums yourself, however, compare the costs. Check into whether family coverage through one of the plans is less expensive than two single policies. If you have no children, two single policies are typically less expensive than one policy with family coverage. Many large group plans offer two-person coverage (an employee plus spouse, partner, or child) for less than the price of a family plan. However, insurance carriers will not allow you to bill two companies for the same medical service.

The Institute also recommends other important cost factors to consider are out-of-pocket deductibles and co-payments. Even if the premium you pay at your company is lower than that paid by your spouse, you may discover that your deductibles and co-payments for health problems and routine doctor's visits are substantially higher. Despite the higher premiums, you may decide that it is better to join a family plan through your spouse's employer because of its lower deductibles and co-payments. Be aware that the services and coverage that one plan provides, including the choice of doctors and hospitals, could outweigh the lower costs of the other. You might decide that your family is better off to pay higher premiums, deductibles, or co-payments while receiving specific services (such as rehabilitation, psychiatric therapy, or free eye exams) that the other plan does not offer.

Whatever your status, sharing the responsibility of choosing health care coverage should not be taken lightly. If you need to get insured, do it. If you need to work out an affordable plan, spend the time to investigate what options make the most sense. Use your time wisely as a couple to search out competitive plans and rates, and talk with your HR manager about what your employer offers. Don't wait til you have a catastrophic event to realize that you should have planned for the unexpected and are then caught by surprise. If you have an emergency or an accident, please be prepared.

Until next time. Let me know what you think.

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