Customer Reviews

The New Health Insurance Solution: How to Get Cheaper, Better Coverage Without a Traditional Employer Plan

5 star:		(22)
4 star:		(2)
3 star:		(3)
2 star:		(3)
1 star:		(5)

 

 

I am a V.P. at a large Tennessee-based third party administrator and typically work with sizable employers (over 250 employees). My interest was in gathering more information about the individual plan market and how it works. As the title suggests, the book is loaded with surprising information about the individual plan market.

First, I have to admit that I knew very little about individual plans (other than what is available at numerous Internet quoting sites) and was shocked to see how inexpensive individual plans are in many very large states. For instance, the average price of an individual plan in California is less than $200 per month (individual plans are on a monthly contract, not annual like group). If you live in California, this is a book you should pick up to learn more about individual plan rates there. Plans here in Tennesse are a little more expensive and the author did a good job of explaining why plans cost less across numerous states. If you are in New Jersey or New York or Massachussetts, it is clear that you are screwed when it comes to trying to find affordable insurance for you and your family. That is because the carriers are not allowed to underwrite you and therefore have to take the crack users with the marothoners and triathletes -- great thinking, NY and NJ! The result? Carriers price individual plans to the moon.

Second, the HSA is an excellent tax savings vehicle as it is one of the few government approved accounts you can put your money in tax free, use it tax free (for medical expenses) and take it out tax free. We administrate HSAs for many groups here in Tennessee and in North Carolina -- so that was no surprise. What was surprising was the availability of individual HSAs and how inexpensive they are -- again, depending on where you live. If you are self-employed, you owe it to yourself to look at an individual HSA just given how cheap the rates are. I suggest you read this book cover-to-cover and then go shop around online for plans to get the best deal.

Third, the author highlights the plight of small businesses in America and suggests that small business owners get out of the group business and move to a reimbursement model for employees to get their own health plans. I was not aware that most US bankruptcies are caused by medical bills and not credit cards. Even more of a shocker, the majority (forget the percentage quoted) were actually on a group plan when they got sick and started encountering major medical bills. So much for the protections afforded by getting insurance from your employer via a group plan. Most of our clients are self-insured -- which means they pay for substantial amount of their health care costs themselves. They use us to manage their claims. In Professor Pilzer's world, small companies would not need group insurance and would just give employees allowance to go buy what they want. An interesting idea that a small business owner may want to consider (after getting their 3rd major rate increase in 3 years).

The negatives to the book are that there are so many examples and cross chapter references that you will find yourself skipping around the book pulling information from different sections on numerous occassions. There is also almost TOO MUCH data and examples listed in the book. I realize the author wanted to support his claims (and he did), but the number of Tips and Hints was a bit overwhelming. I am in the health care business and I found myself having to go back and review sections more than once to make sure I "got it" and the accompanying charts and tips that are found on what seemed like almost every page.

The final negative is a call to action to "contact your Congressman and get them to remove themselves from the government health insurance program". Yeah, right. Like they are going to give up benefits for life. Perhaps this is why so many politicians do not understand the United States health care system -- because they actually are insulated from it by taking office and getting on some incredibly rich benefit plan. Most of my clients cannot afford such a plan and are getting priced out of the market. This book offers a "cook book" of what employers can do about it. I am not sure that bombarding your Congressman is going to have much effect -- they are set for life and are not like the rest of us.

The negatives are largely outweighed by the positives in the book -- not the least of which is the sheer amount of information and data from real world policy purchasers -- not some think tank guessing about what individual health insurance actually costs. If you want the most in-depth look at the US health insurance market, look no further as I am not aware of any other book that covers the entire marketplace and provides the latest info on new Health Savings Accounts. If you are self-employed or own a small business, this book will likely be enormously useful to you. Good luck.

Pilzer's general proposition is that the market place will take care of the health insurance issues in this country if we just let the free market operate. He maintains that individual health insurance is widely available at reasonable cost and people, including employers and employees, should take advantage of the individual market for health insurance. I believe he tends to force the facts to fit this basic proposition.

He is easy to read with a breezy style. The book has pretty good explanations of HIPAA and COBRA and a number of good tips. However, health insurance in the United States is complicated. The price he pays for simplicity is accuracy and thoroughness. It is a pretty good book if you are 35, perfectly healthy, and thinking about buying insurance. But what is good for when you are 35 is not necessarily good 5, 10 or 20 years later. (Should I pay for drug coverage?. . . pregnancy coverage?) I would never rely on this book for making policy decisions or for forming opinions on healthcare in the United States. I strongly disagree with many of his policy recommendations.

Some problematic propositions from the book:

1. Several places in the book he claims that insurance companies in the individual market only turn down or place exclusions on 20% of applicants and 80% are accepted as healthy. He uses this statistic to support his idea that most people can get coverage in the individual market. I don't know about the accuracy of this statistic, but one problem is that people who are uninsurable often do not apply for insurance on the open market. They stay on their employer plan. They go into a risk pool. They buy a conversion plan. Etc. Even Pilzer advises against applying for insurance if you think you might get turned down. So the healthy gravitate to these plans and the unhealthy do not.

Pilzer doesn't discuss what "healthy" might mean and his discussion of the underwriting process doesn't describe what are the typical issues that exclude people from coverage. He does not address the possibly of the healthy fleeing to cheap plans while the unhealthy are trapped in what they already have, causing greater cost disparity.

2. For those who say they can't afford health insurance Pilzer claims that "If your annual income is below the federal poverty line, about $20,000 for a family and $10,000 for a single individual-you probably qualify for Medicaid."

This simply is not true, unless you have children at home, are disabled, or meet some other special category. Low income alone does not qualify a person for Medicaid.

In this same vein, he claims that of the 45 million uninsured, 16 million earn more than $40,000 for a family of four ($20,000 for a single) and 29 million earn less. He assumes that the 29 million earn at least $20,000 if a family and $10,000 if single. Otherwise he claims they would be on Medicaid. He maintains that these low income families could easily buy a low cost HSA plan. But how are they going to pay those big deductibles? Also, his cost data is for people age 35 and their families. In most states, the older you are the more expensive insurance gets. In this discussion, he ignores the issue of underwriting and possible exclusions for preexisting conditions and ignores the fact that in most states, this population could not afford the risk pool which runs on the average, 200% the cost of the same plan for a healthy individual.

3. "Despite what you read in the newspapers, there are health insurance optionsavailable for every American, although it may take you some time, effort and expense to get them." This is one of his soundbite quotes he uses in advertising materials for his book. This is misleading. Insurance on the individual market is not available for many people. The risk market policy will have preexisting condition exclusions and may have coverage riders unless you are coming off of a group plan and have HIPAA rights. The risk market may be unaffordable. If you don't have HIPAA rights, there may be no option for you at all in some states.

4. He states that "the premium you pay for an individual or family policy cannot be raised each year, nor can the policy be canceled based on your health or your prior year healthcare costs." He mentions this several times in the book. At best this is a case of overgeneralization, at worst it is a misleading statement to support his thesis that individual health insurance is the solution to our insurance woes.

I have read a lot about health insurance. Federal law requires guaranteed renewal of individual health insurance plans. Does this mean that rates cannot change based on your health status? Many state's insurance regulators think so. But that does not make it law. Most states allow rates to increase based on age. Some states' laws do provide that your rates can't go up based on your personal health situation. But other states have no laws that apply and in general, the individual market is not highly regulated. From what I have read, experts are not in agreement as to the extent re-underwriting occurs on renewal and insurance companies are not very forthcoming with information about why a particular person's rate increases. Some experts believe that re-underwriting is occurring more and more by a number of insurance companies. Also, some insurers have durational rate settings. This means that your insurance costs can go up considerably after a few years. At that time, you can reapply for a lower cost policy, but can be denied if you are not in good health.

4. Pilzer repeatedly claims that individual health insurance is cheaper than employer provided insurance. It probably is cheaper if you are 35 and healthy. Probably not if you are 60. This is because employers charge the same rate to everyone, whether you are 20 or 60. Also, only 4% of people in the US have insurance on the individual market. So it is a small part of the overall market. Pilzer doesn't break down what that market looks like as to age and health of its participants.


5. Pilzer's discussion of the uninsurable and state subsidized programs like riskpools leaves much to be desired. Mostly because there is so much state variability. This is another circumstance where I really disliked that he used figures applicable to a 35 year old male. The costs are considerably higher for those 50 and over. He fails to mention that some risk pools have low lifetime limits and other restrictions.

6. Pilzer pushes the idea that small employers should go to a reimbursement model, leaving their employees to buy health insurance on the individual market. Employers with older/sicker employees are in fact facing higher costs. However, their employees are going to have problems getting insurance on the open market and may end up with only very high cost options. The employer that has a young and healthy workforce already has lower costs.

This book was a terrific summary that will help individuals, families and businesses understand many new ways to control health insurance costs. It is NOT mainstream thinking within the insurance industry. Like bankers, insurance executives tend to be nervous about change, and it may be more difficult than Mr. Pilzer asserts to find knowledgable counselors for individuals or businesses who want to apply his suggestions.

My experience with the book was very similar to that of the TPA (Third Party Administrator) in TN as I found myself flipping back to various pages to make sure I "got it". Many times I did this only to find a chart summarizing Pilzer's response to my question on the next page, so my advise is to read the book twice, the first time only for concepts.

A California resident, I have checked a couple of plans for my family of three and am able to validate Pilzer's data personally. I was a Fortune 1000-employee for many years before becoming self-employed and I'm certain his assertion that individual plans are less expensive for healthy people is true, despite the conventional wisdom in the group-oriented insurance industry to the contrary. Too many employees covered under group insurance are unaware of how much they and their employer is actually spending on health care.

Overall Pilzer does a very good job explaining critical health care issues. I woud have liked to see even more information on long term care and disability insurance. For me, the most relevant chapter was his acknowledgement that there are many wrong ways for employers to approach a transition away from group insurance.

This book is a sound investment for anyone who pays or might pay any portion of their family's health insurance, or dare I say bureaucrats with a need of a dose of well-researched reality. It also has some excellent strategies for those approaching age 65 or seeking early retirement.

Clearly the person in the review below with the single star is either a group insurance agent or someone who works in a government office getting all their health care paid for by...who else....us (the taxpayers). Brokers are the guys who want you to buy only what they sell so they can get to their 1:00 pm tee time at the golf club. Government employees get to home at 5:01 pm every day. The reality of health insurance is very different. Give us all a break.

What this person also did not tell you, which Prof. Pilzer does in this book, is that companies are already moving a ton of the costs of the GROUP health insurance to their employees already. I know my employer continues to shift the cost onto us and there is nothing we (or they) can do about it. Seriously, my "contribution" on my group plan for my husband and kids is now $310 a month! I went on a site called ehealth insurance and found cheaper plans for my family. Plans that, per a chapter in the book, can be held after I leave my company. The $20 I spent on this book at Borders was worth every cent.

I suggest you check out this book also and read it yourself if you want to better undertand why you are paying more in the form of so-called "contributions". I for one wanted to control my monthly health care costs and did not want my employer deciding which pediatrician my kids can see. An individual plan allows me to do this. I also noted that my employer pays most of MY premium and very little of what it costs to cover my family. Prof. Pilzer explains this thoroughly. If you are on your spouses group plan and your monthly contributions go up every year, you owe it to yourself to read this book and learn what to do about it.

The knucklehead reviewer below would have you beleive that costs are not skyrocketing on your group plan -- which is false. This book shows you how to take control of your family's health care plan and make decisions on your own.

I wish each of you the best in protecting your family's health.

Peace.

Terry

Hooray! Finally someone has provided a succinct and insightful overview of how the complex individual health insurance market operates. Professor Pilzer does a great job of offering intuitive, real life examples of how an individual or small business (or a business of any size for that matter) can obtain quality, permanent health coverage and save money!!
As a small business owner that has been consistently hit with double digit rate increases we have been confronted a serious predicament - we've run out of ways to band-aide our group benefits situation. Like most small businesses over the past few years we had already increased our deductible and co-pays and passed a greater portion of the group plan premium increase onto our employees. We quickly learned this is only a temporary fix until the following years rate increase appeared and recently it has forced us to consider forfeiting offering our employees benefits altogether. However, it became increasingly clear to me as I read Mr. Pilzer's book that there ARE affordable alternatives to sacrificing quality coverage or abandoning loyal employees.
A must read!

Paul Zane Pilzer has produced an excellent sequel to his book "The Wellness Revolution." In this new book, he outlines the details of how, e-x-a-c-t-l-y, we can piece together an insurance policy for ourselves, that gives us back control over our own healthcare and our own finances.

He carefully describes how we can use the new Health Savings Accounts (HSAs) and other insurance features to reduce our insurance costs dramatically (50% - 80% - more) and also feel more in control.

His approach makes sense. I say this even as an author of a competitive book (Health Insurance Off the Grid) because I think our approaches are very compatible. Paul's book is much more comprehensive than mine, but my book is perhaps easier to follow in a simple step-by-step fashion.

A large section at the end of his book gives the average rates for individual/family policies in every U.S. state. The amount of research he invested into this book is amazing.

If you are self-employed, get this book immediately. Same for the owners of small businesses.

And if you are an employee of a company that offers insurance but requires you to pay part of it, get this book! You can do much better by taking your insurance independently! It's absolutely true (but no one knows it).

I wish I had this book years ago. I was able to save over 40% by purchasing an HSA plan and will save even more money taking advantage of the tax saving allowed with this type of plan. Every family in America should have this book. In this times of $3 a gallon gasoline, it was great to find ways to actually save money on my health insurance. An easy read, full of great information and real life examples. Thanks!!!

As a healthcare professional, I was very interested to read Paul Pilzer's new book. He is right on the money. Most American's do not know the problems that could lie ahead of them when they receive health insurance from their employers. Mr. Pilzer explains in great depth what happens to sick employees who cannot return to work; they eventually loose their jobs and their employer provided insurance, eventually leading to financial ruin for themselves and their families.

This is one of the most important and misunderstood points of Mr. Pilzer's book. However, he also talks to the effect of group insurance on healthcare cost increases, how employers can free themselves from this burden, and what pre/post retirees can do to help themselves navigate the complex world of health insurance options for older Americans.

Everyone needs to read this book, regardless of age, health or employment status.

I have never written a review, but I feel compelled to disparage the the previous reviewer ("For the Rich Only") who obviously has never read this book--this guy also posted the same negative review elsewhere on the web. Pilzer does advocate high deductible health insurance for some people, but clearly shows you step-by-step how to analyze whether high deductible will save you money and, as Pilzer points out, Pilzer himself switched from a high deductible to a tradtional policy when high deductible was no longer the best deal for his family. Now, to the main point, this book is absolutely amazing! It contains priceless information on every page and hundred of "tips" that are so clear you wonder why no one ever told them before--like how to get 3 1/2 months of free COBRA coverage each time you change jobs. The chapter on Medicare, or the chapter on getting coverage for a sick child or spouse, or the chapter on long term disability, are each worth 100 times (Iiterally) the cost of this book. I'm not an employer, but Part II of this book, how employers can give employees tax-free allowances to buy their own permanent health insurance, makes tremendous sense. Buy this book. You will save lots of money and finally know how to get what every American deserves---permanent, safe, lifetime, affordable health insurance.

I am small business owner who has suffered these last three years coping
with a 50% increase in premium rates, while trying to provide good benefits
and protection for my employees who work hard and produce so much for my
company. I had long suspected that high deductible plans would be a good
bet, but I didn't know anything about those plans, much less about the
opportunities for HSA's and individual coverage. Neither had my defined
benefits broker (or so he said)!

Some weeks ago I researched and read about HRAs and high-deductible plans.
I even met with a Third Party Administrator. However, it was not until I
read your book today that I gained a complete and comprehensive
understanding of the opportunities and scope of the HSA, HRA, Section 125
and high-deductible plans. Tomorrow I will begin the process of conversion
that will "get my company out of the insurance business." In doing so, I am
giving them a greater long-term benefit than I could have imagined -- true
security and long-term financial freedom from the slavery of the traditional
defined benefits system.

THANK YOU for providing this information in a comprehensive and clear tome.
I believe your book information will lead my company, and the rest of my
friends' companies, into the vanguard of the health care revolution, saving
and making us and our good employees a fortune in
the process. In a few moments I'm going to your site to buy a bunch
of copies -- one each for my employees, family and friends.