Discover Lafayette: Marc Mouton – Focus on Health Insurance

Marc Mouton of the Insurance Resource Group was a recent guest on Discover Lafayette and discussed Jan Swift the ways people can purchase insurance in a more cost-effective way. With the price of insurance rising, along with the many mandates of the Affordable Care Act, it is a challenge for businesses and individuals to stay afloat and keep their families covered.

While just a few years ago you could purchase health insurance for your family for approximately $400 – 600 per month, costs have risen dramatically. Marc cited a recent example of a 56-year-old man with a 55-year-old wife and three children, who needed an individual plan. For a policy with a $4,500 deductible, no co-pay for doctor visits, and no prescription drug plan, basically a barebone catastrophic plan, the quote was $2,265 per month. Marc explained that if the couple formed an LLC (limited liability company), naming themselves as the managers, they could qualify as a legal entity and then obtain the same health insurance for $1,400 per month. People are taking steps to afford health insurance in ways that were unheard of just 3 to 4 years ago as the cost of health insurance is creating an economic depression within the middle classes.

Paying cash for medical procedures also opens up the opportunity to save money. This interview is eye-opening for those of us who are independent contractors caught up in the conundrum of covering our healthcare expenses. Consumers are poor negotiators when it comes to healthcare. We’ll haggle over the cost of a car or a mobile device at Best Buy, but not for our own health procedures.

Some of the largest employers in the U. S. have contracted with “Centers of Excellence” hospitals. An example was given of a large diesel engine company that contracts directly with a Center of Excellence hospital in negotiating costs for surgeries, totally excluding the insurance company. An employee of the company may actually obtain a knee replacement at no out-of-pocket cost under this free market solution to spiraling costs.

In a Preferred Provider Organization (PPO), the national average cost for procedures is 2.6 times more than what Medicare is charged for the same procedure. Something has to give.

Employers may choose to shift the cost of increased health premiums to the employees. Many people now set up tax-deductible Healthcare Savings Accounts (HAS) which sets aside tax-free funds for qualified health benefits; unused funds roll over and accumulate on a tax-deferred basis to be tapped into when needed. This option is a smart move, especially for young, healthy individuals who don’t frequent the doctor but are still subject to high healthcare insurance premiums. An HAS may be utilized for dentists, ophthalmologists, and other similar healthcare providers.  

Similarly, a Health Reimbursement Account (HRA) is an account where the employer assumes the risk of healthcare costs. The differences between an HAS and an HRA are as follows: The money in an HRA is provided solely by the employer and is usually an unfunded, defined contribution notional account, with no cash value. An HSA is a tax-advantaged account that can be used to pay for IRS-defined health care expenses, including long-term care and COBRA premiums.

The Trump administration is relaxing rules governing the price of prescription drugs. It is now legal to ask your pharmacist if you will save money by paying cash for your prescription, rather than automatically anteing up the co-pay amount that insurance companies negotiate in advance. The elimination of “gag orders” on pharmacists and many more initiatives in the works will reduce costs and level the playing field upon which consumers have had no voice.*

 Jan Swift is host of Discover Lafayette, a podcast dedicated to the people and rich culture of Lafayette, the Gateway to South Louisiana. Podcasts are released each Friday and may be subscribed to on iTunes or anywhere you get your podcasts. Visit www.discoverlafayette.net for more information.

*To hear this interview, please visit www.discoverlafayette.net. Special thanks to James Hebert and KRVS for taping it!