A PEEK AT 2006 HEALTH INSURANCE PLANS
MedSave.com was able to compile a sneak-preview of changes that consumers can
expect next year with regard to prices, insurance companies, policies and
employer trends. Health Insurance
, enrollment adviser at MedSave.com, says that most
health insurance buyers will benefit from the overall effect of these changes.
MedSave.com predicts that health insurance rates will increase by an average of 10% nationally, based on a consensus of reliable industry sources. This is a modest price increase compared to health care inflation trends over the past 25 years. In fact, next year's price increase is expected to be the second smallest of the past decade. High deductible insurance plans including health savings account qualified insurance will increase by more than 10%. Average short term health insurance rates will not increase in price and costs may actually drop slightly due to the introduction of new lower-priced plans.
Three of the nation's largest low cost health insurance companies nationally are expected be bumped from that position and surpassed by more innovative and lower cost health plans. Large national health plan administrators (independent of health insurance companies) will be more likely to be able to use their power to "kick out" an insurance company but continue to market the same or slightly improved health plan to their existing member base. This emerging shift of power in the health care delivery system may have significant positive long term implications for consumers. Residents of some state including Minnesota and Washington will find fewer low cost health insurance choices available as some leading low cost health plans withdraw from the state in 2006. Listings will be updated on a state-by-state basis at MedSave.com.
The trend toward "limited benefit" or "basic" health insurance policies will accelerate. Limited benefit plans typically have a maximum dollar limitation built into the insurance policy. Traditional health insurance typically provides maximum coverage amounts reaching into millions of dollars but basic health insurance limits maximum benefits to a few hundred thousand dollars. More than a dozens new limited benefit health insurance policies will be introduced by insurance carriers in early 2006.
A second significant change will be the re-introduction of 36 month short term medical insurance plans in most states. "Short term" insurance is significantly less expensive than continually renewable health insurance. MedSave.com data indicates that more than 98% of health insurance buyers change their coverage in less than 36 months, so this type of coverage is suitable for most health insurance buyers. Most short term health insurance policies are purchased directly online.
The overall effect of the changes will be that the average dollar amount spent on health insurance policies purchased online at MedSave.com is expected to decrease by more than 10% compared to 2005 as more people replace full coverage health plans with limited benefit plans. This is not because the insurance costs less, but rather because of the widely increased ability of buyers to buy different types of health insurance with less expensive "trimmed down" coverage provisions.
The largest growth area in the health insurance industry in 2006 will be firms that specialize in providing benefits to low income workers as more employers offer limited health benefits to part-time workers.
The dollar amount of the employee's contribution will increase by more than 10% over 2005. This change is consistent with the long-term national trends to shift the balance of cost of health coverage from the employer to the employee.
Most large employers will begin offering health savings accounts in 2006. The availability of free health savings account administration and low cost investment account options with firms like Vanguard Funds makes this option more popular with employees. Affiliated Web sites like www.healthsavingsaccount-hsa.com offer free assistance and support to those who wish to start a health savings account online.
MedSave.com provides enrollment support for low cost health insurance plans for individuals and small businesses. Further announcements about health plan changes for 2006 will be made over the coming months as details become available.