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2010-02-09

2010-01-19

Agriculture

Lifestyles

Saturday, November 14, 2009 11:00 AM

Rising health insurance costs complicate budgets

By VICKIE MOSS, Herald Public Affairs Editor

When Ottawa businessman Gary Jones battled cancer between 2007 and 2009, it increased the health insurance premiums not only for his policy but for his employees as well.

“I was very upset,” he said.

But Jones’ employees at Country Mart, 2138 S. Princeton Circle Drive, assured him they were OK with the increase. More than a third of employees take advantage of the company’s plan, he said.

“The plan itself works great, but the premiums are horrendous,” Jones said.

Making choices

The rising costs of health care forces American families to make difficult choices, like paying for medical needs versus paying for rent or food, according to a statement from the White House as part of a push for health care reform. If rapid health costs continue, $1 out of every $4 will be tied up in the health system by 2025, the statement reads.

The current economic crisis brings health care issues to the front, some experts say.

Many employers offer open enrollment in the fall for next year’s employee benefit coverage. Understanding the options may be a headache, but a little homework can save a lot of money, Jason Alderman said. He directs Visa’s financial education programs.

He advises people to review plan changes carefully and check with providers before automatically signing up for the same plan as last year.

Jones said Country Mart bids its insurance each year but has chosen to stick with the same company for the past few years. And even though premiums may be increasing, he encourages employees to explore a Health Savings Account, commonly called an HSA. An HSA is a tax-deferred savings account linked to a high-deductible insurance policy and used to pay for such things as deductible expenses, co-pays and non-covered health care expenses.

About 80 percent of employees who use the company’s health insurance plan also take advantage of the HSA, Jones said.

Smaller businesses like Weigand’s Home & Car Connection, 419 S. Main St., Ottawa, face a challenge providing health insurance at all. Owner Adam Weigand said his two employees have insurance through other sources, while his family obtains insurance through a high-cost private insurance plan.

“It feels like you get less for it all the time,” Weigand said.

Auto, home, life

Health care isn’t the only insurance people are struggling to pay.

The economy brought challenges for people who have to pay insurance for their cars and homes and for life insurance policies, James Wacker, an agent for Farmers Insurance Group, 109 W. Third St., Ottawa, said.

“People are worried about prices right now,” he said. “They’re sacrificing coverage to make up for price.”

More often, people are switching to auto insurance policies that meet the state minimum coverage requirements, he said. They’re also shopping around to find an insurance company with a lower price.

But that, too, can be more costly in the long run, Wacker said. Many companies charge fees or fines to start or stop a policy, and most companies have raised rates.

People who are less likely to switch policies are those who have combination policies, like home and auto, Wacker said.

Companies that offer auto, home and life insurance policies also are likely to have the lowest rates because they offer discounts to people who have more than one type of policy, Wacker said.

People who have life insurance are the least likely to switch companies, Wacker said.

“It’s more personal insurance,” he said. “That means agents took the time to care enough about the customer to ask about life insurance.”