SmartMoney Blogs

Pay Dirt
A daily look at what we buy, how we spend, and the companies that do right - and wrong - by their customers.

Blood Pressure Alert: Health Care Costs Set to Climb


Consumers can’t get a break. Food prices keep rising, the market remains volatile and now health care costs are on the way up.

The cost of employee health care benefits is expected to rise by more than 7% in 2012, according to a report released today by the National Business Group on Health, a non-profit industry association.

In response, employers are planning to shift more of those costs to workers. Next year, more than half of employers plan to increase how much employees contribute to premiums and 39% plan to raise in-network deductibles, according to the same survey.

For workers, this means it’s important to have a strategy when open enrollment rolls around, typically in October and November. For starters, pick the right insurance coverage, says Helen Darling, president and CEO of the National Business Group on Health. If you rarely visit the doctor, consider using a high-deductible plan, which typically has lower premiums but a significantly higher deductible than a traditional plan, she says. (In 2011, such plans had deductibles ranging from $1,200 to $5,950 for single person and $2,400 to $11,900 for a family.) On the other hand, “If you have two kids with asthma and allergies, you may be better off with the HMO,” Darling says.

Another way to save: take advantage of the discounts and freebies offered at the office. More companies are encouraging workers to get and stay healthy by providing free or low-cost smoking cessation classes, weight loss groups and other wellness programs. Among companies offering incentives for healthy lifestyles this year, the annual amount that could be earned ranges from $50 to $1,000 for participating in these programs, according to the survey. Employees collect an average $383, while dependents earn an average $303. And next year, companies say they plan to provide larger financial incentives and more opportunities for families to use them.

One of the biggest benefits for those in a high-deductible health plan is the tax-free earnings of a Health Savings Account (HSA). Employees can make pre-tax contributions to the accounts, and employers often make contributions, too. (The maximum HSA contribution in 2011 is $3,050 for a single person and $6,150 for a family.) There are no taxes on the savings if they are used on medical expenses. But unlike flexible spending accounts, which are more common, the money in HSAs does not have to be spent in the calendar year. Instead, it could be invested much like the money in a 401(k) or Individual Retirement Account and spent years later. One caveat—there’s a 20% tax penalty for those younger than 65 who use the assets on nonmedical expenses.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 5)

View all Comments »
    • Hello Webadmasadter, I noticed that is rankading pttery low on Google and has a low Google PageRadank. Now the Google PageRadank is how Google is able to see how reladeadvant your webadpage is comadpared to all the other webadpages online, if you canadnot rank high at the top of Google, then you will NOT get the trafadfic you need. Now usuadally tryading to get to the top of Google costs hunaddreds if not thouadsands of doladlars and very highly optiadmized taradgeted maradketading camadpaigns that takes a team of experts months to achieve. Howadever, we can show you how to get to the top of Google with no out of pocket expenses (free trafadfic), no stuadpid ninja tricks, no silly mind conadtrol techadniques, and this will be all white hat with no blackadhat softadware or tacadtics that could posadsiadbly land you on bad terms with Google and put you in the dreaded “Google Sandadbox”. We’ll show you how to easadily capadture all the taradgeted trafadfic you need, for free, muladtiadple ways to land fast (not months) first-page rankadings in Google and other major search engines (Bing, Yahoo, Ask, etc), even show you strateadgies on how to earn daily comadmisadsions just try , please check out our 5 minute video.

    • The same in my state nc very expensive to shop arnoud with.My state nc very expensive to insure young driver you can try to insure young driver you can try to shop arnoud with other companys and check there about the same in my state nc very expensive to insure young driver you can try to shop arnoud with other companys and.The same in my state nc very expensive to insure young driver you can try to insure young driver you can try to shop arnoud with other companys and.The same in my state nc very expensive to insure young driver you can try to shop arnoud with other.

    • Points 1-6 sound good in theory, but who mdtereines the price paid for coverage and who ensures that price is affordable to every American. This is especially hard since a lot of Americans live paycheck to paycheck regardless of whether they currently have health insurance or not.

    • While I was looking for a cheap health insurance my friend told me that there are sites, where people can compare prices from many providers.These sites are the only one way to save money on your insurance, because once you register many companies will make you different offers.The site he suggested me was:


      I tried them and I saved more than 30%.Try it.Just register and get free quotes!

    • I am very thankful for our health insurance, and even more thankful that we found an affordable one through “Penny Health” online. It has been 6 years that they have not increased my premiums. Having health insurance gives us a peace of mind

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.