The cost of health care continues to rise at the fastest rate in our history. According to the Kaiser Family Institute, since 2000 health insurance premiums have increased by 73%. At the same time inflation has increased 14% and wages have climbed 15%. In 2005 alone, employer health insurance premiums increased by 9.2 percent…nearly three times the rate of inflation.
BizPlan: A Five Year Study
BizPlan, a Section 105 medical reimbursement Plan, has helped tens of thousands of small and solo business owners received 100 percent deductibility of their family medical expenses. Every year BizPlan collects medical expense information from Clients as part of the adjudication process. These expenses include insurance premiums and out-of-pocket expenses. BizPlan checks the eligibility of each expense and ensures that the Client has stayed within the limits they pre-set for their Plan.
Thanks to this system BizPlan is able to track the costs of health care for nearly 40,000 solo business owners and their families. Those findings reinforce those of countless other studies: the cost of health insurance has increased dramatically over the past five years. In 2001, the BizPlan Client paid on average of $4,576 a year for their family’s health insurance. By 2005, that average had risen to $6,016 a year, an increase of 31.5%.
Of course the cost increase doesn’t stop with insurance premiums alone. What often isn’t reported by the media is how these same families have faced a significant increase in their uninsured medical expenses. These expenses represent a major and in some cases unexpected burden on the family budget. Consider these statistics from the Kaiser Family Institute.
- Nearly one-quarter of all Americans had problems paying their medical bills in the past year.
- More than six in ten adults who report problems paying medical bills are covered by health insurance.
- Almost two in ten Americans say health care costs are their biggest monthly expense after rent or mortgage payments.
The findings at BizPlan certainly reinforce this trend. In 2001, the average BizPlan Client reported $3,236 in uninsured medical expenses. By 2005, that average had jumped to $4,159, an increase of 28.5%. When added to their health insurance premium, BizPlan Clients total costs for health care grew from $7,812 to $10,176 a year for 2001 to 2005, an increase of 30.3%. Is it any wonder why a recent study by Harvard University researchers found that 50% of all bankruptcy filings were partly the result of medical expenses? With BizPlan more people can avoid bankruptcy and can reduce their medical debt.
While the increase in insurance premiums may be expected, it is surprising that the rate of increase is about half of the national average. According to TASC chief executive officer Daniel Rashke this places more value than ever on BizPlan. “That equal increase between premium and uninsured medical expenses is an indicator that our Clients are holding down premiums by self-funding more of their medical expenses,” adds Rashke. This shifting of costs from premiums to uninsured medical expenses just increases the value of BizPlan. Indeed, while self-employed individuals may deduct 100 percent of their medical insurance premiums under the Federal program, only BizPlan offers 100 percent deductibility for
uninsured medical expenses.
BizPlan’s Clients are truly fortunate. Because of this program their saving has risen right along with the rising cost of their health care. In 2001, BizPlan Clients averaged $1,833 in tax savings. By 2005, that amount had grown to $2,376...nearly a 30% increase in their tax savings. Collectively, our 40,000 BizPlan Clients save nearly one billion dollars in taxes each and every year. And all indications are that these savings are only going to increase!
The moral of the story? Enroll in BizPlan as soon as possible. This program is a truly reliable hedge against the rising costs of health care.
Learn more about how you can save money on your taxes with the
BizPlan Medical Reimbursement Plan
