The Affordable Care Act (ACA) has changed how many New Yorkers approach health care. We may begin asking ourselves how we can minimize our health care costs while still getting the best care money can buy? In essence, what is the true cost of health care? (And why does insurance cost what it does?) Let’s look at where your premium dollars go.
Nearly 60% of the 3.5 trillion dollars spent on health care in 2013 went directly to physicians and hospitals. Another 20% went to prescription drugs, medical equipment, nursing homes, and continuing care. That left 12% for health insurance administration, and another 8% for taxes and fees.
A closer look reveals that the amount of money we’re paying hospitals and physicians is increasing at a rate greater than inflation. Combine that with the fact that in addition to the added benefits and services required by the ACA, the law also introduces new taxes and fees that will contribute to health care costs. A study by global management consulting firm Oliver Wyman indicated that over ten years, there will be close to a $10,000 per family impact as a result of the ACA’s taxes and fees.
What does all this mean for you? Well, you may not be able to control the taxes and fees that are being imposed, but you can have greater control over your health care spending choices.
According to the Institute of Medicine (IOM), wasteful spending accounts for about half of all U.S. health care expenditures. That means that patients are undergoing unnecessary tests and procedures – and they are not getting better outcomes as a result. So is that really money well spent?
How to get the most from your health care dollars
The situation is not bleak, however. The ACA is creating an environment that engages consumers and educates them about the costs of their health care. And we’re here to help by providing key steps you can take to get the most from your health care dollars:
There are four main factors you should consider when selecting a health plan:
Cost of the annual premium
Type of benefits offered
Eligibility for tax credits and subsidies under the ACA
Chances are, you wouldn’t buy a house without researching the neighborhood. Apply the same logic to your health care costs. Look at what you need, what you want, and which plan best fits your lifestyle and medical concerns. Don’t be afraid to ask the hard questions – your health care costs are in your hands.