Part I: The Current State of Family Health Care Coverage

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Medical expenses in the U.S., whether covered by private insurers, individual households or taxpayer-funded assistance programs, have skyrocketed in recent years. Much of this increase is due to a disturbing upward trend in preventable issues like heart disease, diabetes, cancer and high blood pressure. In 2010, U.S. expenditures for health care totaled $2.6 trillion, and costs per person averaged $8,402. Nearly three quarters of total healthcare costs in America were directly related to preventable illnesses.

Health problems that begin in childhood can lead to fewer job opportunities, lower income, decreased self-esteem and a less productive adult life. Fortunately, families with dependent children can do much towards preventing health problems by promoting healthy living. Smart lifestyle choices not only reduce a family’s out-of-pocket costs, but create positive habits that extend into adulthood. Purchasing a health insurance policy for your family is optimal; however, even without insurance, instilling proper nutrition, exercise and personal hygiene habits can result in some not-so-obvious benefits – your kids will perform better in school, and the costs of raising your family will be greatly reduced.

Family Insurance Policies

Family insurance policies cover two or more people who are part of a nuclear family; they are also somewhat different from individual insurance plans, at least in the way they operate. Costs are projected for the family as a group, and benefits include coverage that is specific to a growing family’s needs. Family insurance plans may be provided by an employer, subsidized by an employer for purchase or bought on the open insurance market. While employer insurance plans are generally cheaper, some families consider these risky in an unstable job market, preferring to purchase a policy that remains in place regardless of employment.

Typical Costs of Family Plans

While insurance can undoubtedly save a family from catastrophic health care costs, family insurance is not inexpensive. Recent legislative health care reform has changed the landscape in ways that are yet to be fully understood, and insurers have responded by raising costs. The average annual premium for U.S. families in 2012 was $15,745, a 4% increase from 2011. Out-of-pocket costs increased at a similar rate to $962 per year. If you purchase insurance through your employer, your cost is likely to be significantly higher if you work for a firm that has over 200 employees, or if the majority of employees are older adults.

Many insurance plans have a deductible, or minimum out-of-pocket expense that must be paid by the policyholder before insurance begins to cover costs. In individual plans, the deductible is set for one person. Family plans, however, calculate deductibles for the family as a whole, or sometimes with a lower deductible for each family member and an aggregate total for the entire family. According to a report on costs and benefits of family health insurance plans conducted by eHealth, Inc., the average family deductible after premiums in 2011 was $3,879.

Benefits Coverage for Families

Coverage provisions in family plans are designed to meet the unique needs of parents and children. Growing families have a greater need for OB-GYN and maternity health care, well-baby checkups, preventive care, immunizations, emergency room visits and prescription plans. There is no legal requirement that children be insured, but laws are in place to protect children. For example, under the Affordable Care Act, insurers are no longer allowed to apply pre-existing condition status to children, though they are allowed to charge higher premiums for at-risk minors. Additionally, children may now be covered on a family policy until age 26. Any parent-child relationship qualifies children for insurance, whether biological children, step-children or adopted children. Enrollment rules vary among states; check your state legislature for details.

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