What Are The Advantages And Disadvantages Of Health Insurance

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It’s no secret that the price of health insurance is rising every year with no regards to the cost of living. With the stresses of keeping up with the bi-laws of the ACA, employers are finding themselves in a tight position when it comes to contributing to health insurance plans for their employees. Employment agencies are starting to notice that providing health coverage benefits to employees at a reasonable costs is not an easy task. To date, the majority of the population in the US receives health insurance coverage through their employer for themselves and their dependents. Health insurance premiums have been steadily increasing over the past few years, requiring larger contributions from employers thus affecting their bottom line. …show more content…

Defined-contribution plans and consumer-directed high deductible plans are both designed to make employees select health insurance based upon price (Galvin 2016). However, both plans have varying qualities. The defined contribution plans affect employees during their yearly coverage selection. Employees are allowed to buy up or down depending on the fixed employer’s contribution to a specific benefit design. While this may seem beneficial, once an employer contributes less, the number of available services and providers decrease for individuals to choose …show more content…

For instance, the premiums are higher because each person is allowed to choose which plan that they feel is right for them. Sometimes people disregard prices until the last minute. Secondly, the payment for the health plan comes from after-tax dollars opposed to pre-taxed dollars seen with group plans (Pauly et. al 1999). Poor financial planning can put pressure on already strained pockets for individuals that choose this option. Therefore it is important for those pursuing individualized health plans to financially plan ahead. In terms of controlling costs for individual parties, these plans allow much more freedom and flexibility and allow for premiums to be purchased based on a specific need and not a generalized

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