Posts Tagged ‘health insurance’

There is an old joke about life insurance. The agent tells the client “For someone your age, the yearly premium on a $5,000 policy is $8,000”.

Apparently, the old joke has become new. Health insurance, as we all know, is skyrocketing, but some know that better than others. For instance, Victoria Collier of the San Francisco Chronicle reported that one 59 year old man in San Francisco is facing a 38 percent increase in his monthly premiums. That is on top of the 41 percent increase he received last year, bringing his total increase to 94 percent in one year. Anthem Blue Cross stated the increase was due to fewer people in the health insurance pool, increasing medical costs, and a bad economy.

Working for an insurance broker, I am licensed with multiple insurance providers so we can offer policies with all the major carriers. So I know from experience that all medical insurance companies have had to raise their rates due to increasing health care costs. However, I know of only one that has consistently offered lower rates for the same quantity and quality of health care coverage.

There is a reason they can do this, and it’s not magic, and yes, they are for profit. In fact, they are a Fortune 500 company. It’s simply that they have been offering life insurance for individuals and individuals only for over 100 years. It is the one thing they do and they do it well.

Of course, they do not guarantee coverage for everyone but you may be surprised. Get a quote, then shop around. Compare policies and networks.

Check it out for yourself and let me know how it turns out, for the good or for the bad.

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On top of the woes of the present economy, it seems we are constantly bombarded with tales of fraud, corporate directors receiving exorbitant bonuses, and of failed government regulation of consumer industries, all at the cost of the so-called little guy. So, when I recently came upon an article regarding a health insurer forced to reprocess 600 denied claims for emergency services after a review by the Pennsylvannia Department of Insurance, I couldn’t help but feel all warm and cozy. After all, as difficult as it is to get health insurance these days or to pay the premiums required if you do have coverage, it’s nice to hear when the safeguards in place to protect the consumer, actually do work.

That’s not to say that insurance companies are the cause of all our woes or that regulatory agencies have failed to serve the purposes for which they were intended. It’s true that greed on an individual and corporate level impacts all of our lives. But, let’s face it when this report was picked up by the many blogs and websites commenting on it (including this one), how many, were focused on the positive aspects of the story? Diligence and integrity just do not make for good headlines.

So with that in mind, this is to the men and women at the Department of Insurance whose efforts helped over 600 patients get coverage for emergency care received, and to everyone out there who choose to do the right thing instead of just what may be in their own best interests…, and yes, many of them also work for insurance companies…

Thank you! We appreciate it!

By the way, for any of you out there who feel you have been wronged as a consumer bookmark http://www.consumeraction.gov/caw_problems_dont_giveup.shtml. It contains a list of local, state, and federal agencies, regulatory agencies, consumer organizations, BBBs, and media programs that exist for the protection of the consumer. Free consumer protection booklets are also available, in English and Spanish, and can be ordered from the site also.

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These days doing it yourself and buying it online has become second nature for many of us. I speak from experience when I say that I tend to be a little less trusting if someone wants to sell me something. I am one of those that would rather spend hours researching and purchasing something online instead of taking the chance of talking to a salesman who might pressure me; although more often than not, by the time I’m half-way through doing the research I am too tired to buy it (not always a bad thing). But I have found, there are some products that, in general, are best purchased face to face, or at least person to person. Insurance, particularly individual health insurance, is one of them.

For that reason, I found it very interesting when I came upon the results of a study of 1003 persons having purchased individual medical (IM) insurance within the last 2 years. The study was commissioned by Assurant Health and conducted in May/June 2009 by the Chicago firm of Beall Research & Training, Inc. In short, the study found that 62% of those purchasing IM insurance did so through an agent and the majority of those purchasing through an agent were significantly happier with their shopping and purchasing experiences and their outcomes than those who purchased online.

In addition purchasing through an agent seems be a big time-saver. According to the study:

  • more than 75% of consumers who shopped through or purchased insurance through an agent talked to the agent for less than an hour before deciding what to buy,
  • of those who shopped and purchased online, only 36% spent an hour or less online, while 28% spent more than four hours, and
  • 31% of those shopping online described the experience as timeconsuming.

Whatever method you prefer to purchase insurance, the most important thing is that you DO purchase it. Even if you never have to use it, you still benefit from a certain degree of peace of mind, …something that is a little more difficult to find these days.

For free information about financial products such as life, health, disability, long term care, and retirement products, visit getfinancialadvice.com or for questions or referrals regarding insurance agents or products leave a comment or email support@getfiancialadvice.com.

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Yeh, right!

Yeh, right!

One of the theories as to why healthcare costs continue to rise at an alarming rate is “overcoverage“. Basically stated since insurance companies primarily pay the costs for healthcare, consumers have little knowledge or concern in regards to the costs of these services. Since ‘someone else’ is paying the bills, who cares how much it costs? However, if the money came directly from the pocket of the consumer, providers would have to compete more for healthcare dollars and consumers would have to budget their use of those services.
Health Savings Accounts (HSAs) were created with the purpose of solving this problem. How?
First it might help to know a little about the recent history of health care. If you are like the majority of Americans who have, or have had in the past, an HMO, you probably won’t be surprised to know that most people were less than satisfied with the plans.
Basically, HMOs were created for the purpose of bringing down the cost of health care expenses through the use of case management. HMOs signed up physicians to be a part of their network. The physicians provided discounted care to HMO members and the HMO would provide new patients to the physician. The belief was that the expenses paid by insurance companies would be reduced given that overpriced physicians would be removed from the group and unnecessary and expensive visits to specialists would be controlled through the Primary Care Physician (PCP).
That objective was successful from the standpoint of lower expenses for insurance companies; however it became very unpopular with patients. For one, it was often very difficult to get an appointment with one’s PCP since they were often overbooked by the networks which would require that a minimum number of patients be assigned to each PCP.
Second, the PCP was not able to dedicate a lot of time to complicated cases because of the number of patients scheduled to be seen from one day to the next. Moreover to discourage expensive visits to specialists, bonuses given to PCPs were reduced whenever a PCP referred a patient to a specialist.
Another complaint was that HMOs would many times offer lower rates at the start to attract new employer groups then raise rates mid-year. Employers who paid a percentage of the premiums for their employees were more likely to switch HMOs if they were offered a better price by another plan. When an employer switched plans it often meant the employees would have to switch PCPs and/or any other doctor that may have been treating them, in order to receive coverage. The same was true if a provider was unhappy with the HMO and left the network, or vice versa; either way the patient would have to shop for new care providers.
Preferred Provider Organizations (PPOs) were the next hoped for solution. They allow patients to choose to stay within the network or go outside the network for their provider(s). Since providers outside of the network used by the insurance company are more likely to charge more for their services, the insurance company passes the cost on to the patient by requiring a higher copay or deductible. The premiums are also generally higher for PPOs as opposed to HMOs.
However, although HMOs and PPOs have slightly slowed the rising cost of health care or health insurance, the rate of increase continues to be 2 and 3 times the rate of the cost of living. In fact, the number of individuals who cannot afford insurance continues to rise. When this occurs, one way or another the government (i.e. the taxpayers) ends up paying, either through Social Services programs or through Medcaid when the individual becomes medically needy.
So how do you encourage individuals to get insurance coverage that they can’t afford? This is where HSAs and HDHPs (High Deductible Health Plans) come in. Where someone may not be able to afford the premiums on a policy with complete coverage, a HDHP at least provides coverage in case of catastrophic events and leaves the outpatient expenses and prescription costs for the individual to pay. Since HDHPs only begin to pay once the high deductible has been met, the premiums for these policies are significantly reduced. With premiums reduced employers who otherwise would be forced to discontinue offering health insurance can continue offering group health insurance without medical underwriting. In addition, the consumer receives negotiated pricing for the visits to in-network physicians even before the deductible is met.
So, Uncle Sam doesn’t get stuck for a catastrophic health event, the insurance company doesn’t have to worry about how many doctors or which doctors a person visits, since the HDHP can be HMO based, PPO based, or other; and the consumer enjoys lower insurance premiums. But if a person could not afford complete coverage in the first place how will they pay for sudden doctor visits, and prescriptions before the HDHP begins paying?
Here is where HSAs (Health Savings Accounts) come in. Of course, HSAs do not give individuals the money to pay these expenses; nothing is perfect. However, HSAs provide both a mechanism and incentive for employees to save for those expenses. The method is a government approved savings account that works in conjunction with the HDHP. Depending on the amount of the HDHP deductible and how much the employee estimates his yearly out-of-pocket medical expenses will be, a set amount is withdrawn from the employee’s paycheck each pay period and deposited into the account. Whenever a medical expense occurs (doctor visit, prescription charge, etc.) the expense is deducted and paid for from the HSA.
The amount deposited into the HSA from the employee’s check is tax free so depending on the tax bracket of the individual the savings can be significant, from 20% to 40% or higher. So in a way an HSA (or rather the federal government) does provide at least some of the money for those expenses through tax savings.
Okay, that’s good news for those whose employer offers HSAs and HDHPs, but what about the self-employed or individuals who cannot get group coverage through their employer? Fortunately HSAs and HDHPs are available for individuals. Of course, as with all plans offered outside of group plans any preexisting conditions may result in denial of coverage or exclusion of coverage for the condition. (So what else is new?)

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So you’ve been laid off or your business is just not producing like it should. What do you do? Unfortunately, most families do not adjust their spending habits until six months after their income has been reduced and then often the first things to go are benefits such as life insurance, disability insurance, health insurance, saving for retirement, etc. After all you’ll only miss them if you need them. And really how can you prepare for the future when it’s a struggle to provide for your family now?

But is it?…

Stay Positive – Change Your Way of Thinking

A Family Affair

Think about what you CAN do

First of all you need to stay positive. Most often the ‘dread is worse than the deed’. Don’t think about what you can’t do, think about what you can do with what you have. Make ‘doing without’, ‘doing instead’. Substitute going to the park in place of going to the movies, and camping in place of staying in a hotel. Take advantage of ‘freebies’, such as concerts in the park, walking, bike riding, etc. Volunteer to help others. This will help you to appreciate what you have and help keep your feelings of self-worth from becoming despair.

Buying Only What You Need

Before making a purchase ask yourself:

Do I really need this or do I want this?
Can I postpone getting it?
Can I get it for less?
Can I make it or repair the one I have?

Make It a Family Affair

If you think you are protecting the family by not talking about your financial situation, you are wrong. They are stressed too though they may not show it. Call a ‘family meeting’ and discuss the need to cut back. Ask them for ideas on how they may be able to cut back and discuss the ways that you plan on cutting back. Most arguments between couples are concerning finances, but you can make it a means of bringing the family together. But, don’t expect too much too soon. Just as it will take time and effort for you to change your habits and way of thinking, the same is true for your family.

Get more financial advice at getfinancialadvice.com.

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