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The New Healthcare Crisis: When Having Health Insurance Isn't Enough

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The New Thinking on Health Insurance

Between 1999 and 2008, insurance premiums rose 119 percent while the average salary increased 34 percent. "Employers [who provide monthly coverage for 159 million Americans] have to make tough choices," says Kim Bailey, a senior health-policy analyst with Families USA. "Limiting coverage keeps costs down, but people are paying a lot more out-of-pocket."

In 2008, America's Health Insurance Plans (AHIP), an industry association, published its recommendations for fixing the system, including a long-term goal of instituting a best-practice model, whereby doctors use the same proven procedures and treatments for each ailment, eliminating the potential cost of extra doctor visits and tests.

Meanwhile, the country is watching to see if President Obama will make good on his campaign promise to enact a healthcare plan that increases affordability and extends coverage to all Americans by the end of his first term.

For now, however, the responsibility for having enough insurance rests with the individual. "People have to educate themselves about what their plan covers," says David Knowlton, president and CEO of New Jersey Health Care Quality Institute. That means reading the fine print to understand the limits of coverage: knowing how the deductibles work, what services and medications are included and where you might be left short. Knowlton also recommends opening a "cafeteria" account, in which pretax money is taken out of each paycheck to be used for unexpected medical problems. Some companies offer to match these funds. Otherwise, even young, healthy women should set aside at least the amount of their annual deductible as a safety net for any catastrophic event. "It's not money wasted," Knowlton says. "The bottom line is, you want to be protected."

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