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2011 Healthcare cost for the American family tops $19,000!

Total health care costs for the typical American family topped $19K per year. Though the increase over 2010 cost was a modest 7.3% increase, health care costs are now at an all time high.

Health care costs more than doubled in 9 years! Employees continue to pay for a larger share of the increase relative to previous years.  Total distribution for this year: employers
pay about $11,400, employees pay about $4700 in premiums and $3,300 in out of
pocket costs.

Milliman does an excellent job in laying out the components of these increasing costs in their 2011 Medical Index Report.



Covering young adults, two important issues.

Health care reform required health plans that offered dependent coverage to extend coverage to all young adults up to age 26. Approximately 30 percent of young adults between the ages of 19 and 29 have no health insurance coverage. This young adult expansion of eligibility was an effort to make health insurance coverage more accessible to these young adults. However, what is not discussed is that this new right of young adults to be on their parents’ health plan appears to be independent of their parents’ discretion to prevent their child’s enrollment. Department of Labor’s FAQ on the issue is subtle:

“Q:  What happens if a young adult under the age of 26 is not eligible for employer-sponsored insurance and both parents have separate plans that offer dependent coverage?

A:  Neither parent’s plan can deny coverage.”

Some parents may not want junior on their health plan beyond a certain age, however, the government may have removed the parent’s discretion on the matter.

The other issue more frequently discussed is when does or should coverage end of the young adult? When they turn age 26? Up until the end of the tax year they turn 26? Or only until the turn age 27 do they become officially ineligible?  These are all very good questions and extremely confusing. PPACA only stipulated that coverage had to continue to be offered to dependent children up to age 26. However, employers and insurance companies may wish to extend coverage beyond age 26 or at least until the end of the year in which the young adult turns 26. This is permissible and apparently without tax consequence pursuant to IRS notice 2010-30 as long as this child has not obtain the age of 27 by the end of the taxable year. Check with your insurer and qualified tax advisor for how this new law could affect your situation.

Could our medical providers be the best salespeople ever?

“The demands of the public for definitive wellness are colliding with the public’s belief in a diagnostic system that can find only disease. A public in dogged pursuit of the unobtainable, combined with clinicians whose tools are powerful enough to find very small lesions, is a setup for diagnostic excess. And false positives are the arithmetically certain result of applying a disease-defining system to a population that is mostly well. … If the behavior of doctors and the public continues unabated, eventually every well person will be labeled sick. Like the invalids, we will all be assigned to one diagnosis-related group or another. How long will it take to find every single lesion in every person? Who will be the last well person?”

Dr. Clifton Meador in his 1994 essay “The Last Well Person“

We have been discussing efficiency in medicine for decades, only recently have policy wonks been aggressively addressing the issue. The 2008 release of the book Knowing What Works in Health Care by the Institute of Medicine placed additional focus on this issue.  Since this time a series of policy and legislative actions have occurred around the issue of efficiency in medicine. Including but not limited to the recent health care reform law. Kenneth Lin’s post Book Review: “Overdiagnosed” and the Paradox of Cancer Survivorship highlight some of these concerns.

An old saying in salesmanship is, “If the need is not there (for your given product) then create the need (for your given product)” Could our medical providers be the best sales people ever?