For example, last year, I paid about $12,000 for health insurance for my family. The insurance company ended up paying about $9,000 in claims. We paid another $3,500 out of pocket for copayments, and deductibles. Now granted, if we would not have had insurance, then the costs would have been higher because of the negotiated rates that insurance companies get, so its probably about a wash in actual cost.

In my opinion, the problem is that health care costs so much because the system is overused. Why, you ask? Because people who aren’t paying for their own insurance, go the doctor every time their nose gets runny, or they got a wart, or a cold, or some minor issue that has no business being addressed in a doctors office.

If you had to pay the doctor every time you went (full price) then you probably wouldn’t go unless you really needed it right? And if everyone did that, then the price of health care would go down, and everyone could keep more of their own money.

Oh, well, I guess I’ll have to get a night job to pay for my health care.

The problem with rising health care costs I think is that insurance companies are paying our bills for us, so we don’t care how much things cost. Why can’t health insurance be more like car insurance? If car insurance was like health insurance, we would be submitting claims to get our oil changed and the wiper blades replaced. No one does that do they?

Enter Health Savings Accounts. This is where I am going. I found a great site called ehealthinsurance.com where they can search for a plan based on your criteria. I found a catastrophic policy that covers my whole family for $369 per month! And this is with a major well known company. Now all I need to do is get my health savings account opened, and I’m in business. I figure if I save $200 per month into the account, I can pay for all the general doctor visits for sinus infections, etc. The great thing is about the account is that if I use my money wisely, then I can keep whatever I have left over at the end of the year for the next years expenses. In other words, it like a savings account (hench the name).

This isn’t the plan for everyone. In fact, if you have a major monthly expenditure of medication for example, this might not be for you. For me, I think it will work out better, and I’ll save $300 a month.

Now I just made my health insurance like car insurance. Since I’ve taken the middle man out of paying for most of my medical bills, I’ll probably pay more attention to how much things cost, and shop around more. If more people did that, and medical providers had to start competing, then healthcare costs would decline.

I’ll let you know how it goes.