Insurance World

To discuss the terminology Group Health Insurance, we must first familiarize ourselves with the concepts Insurance and Health Insurance.

Insurance is a kind of protection, a safety net against unforeseeable losses. No one knows what the future holds, and insurance is a good way of preparing for what may come. Health insurance is a protection against medical costs. The insurer pays the cost of the insured person if the latter falls ill - due to accident maybe, or any of the covered causes. Magnify the health insurance more than ten times over and you get the Group Health Insurance.

Group Health Insurance is a health coverage based on a group of people under a company or an organization. The cost of the insurance is allotted among the members of this group. The group enjoys a wide range of benefits of Group Health Insurance. A master contract or policy is issued to their employer or to any of the group’s affiliations.

Health insurance is one of the most important benefits offered to an employee through their employers. Not only does an employee feel secure with this insurance, he also feels assured of the care of his employers. Companies spend billions annually for health insurance, and group health insurance make up the bulk of the revenues earned by health insurance companies.

Group health insurance can be availed by any company with two or more employees. Requirements vary around the world, though one constant requirement is the proof of legitimacy of the company’s operation. The number of employees to be insured under the group plan determines the type of coverage available to the employer. A company with more than a thousand employees will have customized health plans, and these may include additional benefits.

With the rising costs of prescription drugs and health care in recent years, companies have experienced a drastic increase in the cost of providing health care benefits to their employees. Many companies are forced to cut back on the benefits of the health plan, and some even require their employees to pay a higher share of the monthly premium of the insurance, even to the point of requiring them to pay the 100% of the dependent premium! Decreases in the health insurance benefits cause some employees to pay medical expenses themselves when they require medical treatment or prescription drugs. Businesses offering full premium payment for employees and their dependents are fast decreasing.

A new study by the American Council of Life Insurers (ACLI) shows that baby boomers need to pay attention to the very real possibility they may need long-term care. The reason: escalating long-term care costs.

“Long-Term Care Insurance or Medicaid: Who Will Pay for Baby Boomers’ Long-Term Care?” sounds the alarm on a potential national long-term care crisis. More important, it is a call to action for individuals to include long-term care in their retirement planning, said ACLI President & CEO Frank Keating.

The study shows that a one-year stay in a nursing home averages nearly $70,000 for a private room or more than $61,000 for a semi-private room. By 2030, the same stay in a semi-private room will cost an estimated $190,000, more than tripling over the next 25 years. Most Americans cannot save enough to cover these high costs on their own.

“Americans are living longer than ever before. That is good news, but it has some risks. One of those risks is that many future retirees will be facing astronomical long-term care costs,” Keating said.

The issue is of particular interest to women because they tend to outlive men. A 65-year-old woman has a 50 percent chance of needing nursing home care in her lifetime-a cost that could potentially wipe out her retirement savings.

What can be done? Life insurers recommend long-term care insurance.

Long-term care insurance is a vital component of a sound financial plan for retirement. It helps people maintain independence in retirement if they require long-term care services. Long-term care policyholders don’t have to rely on government programs or their family to pay for care. Moreover, the product has evolved over the years. It now offers a wide range of services in a variety of settings. Some policies may include reimbursement for respite care, medical equipment, care coordination services and even home modification.

“Long-term care insurance provides retirement security to millions of Americans. But more need the protection it offers. With long-term care insurance as part of a retirement plan, Americans are better equipped to protect their life-long savings and maintain their standard of living,” Keating said.