Quick Insurance Tips

A costly mistake that many people make regarding health insurance is to wait until their COBRA health insurance expires before purchasing other coverage. This can be costly in two ways. You can pay much more for a COBRA policy than you might for an individual or family medical insurance policy. You can be less healthy when your COBRA expires and medical insurance may therefore cost you more at that time.

COBRA is a United States federal law or regulation that mandates that large and medium sized employers allow their former employees to continue their group health insurance. It is not public or government based insurance. It is legislation that forces most employers with over twenty workers to provide medical insurance for recently separated workers.

Because it is a group policy, many believe that it will be less expensive than a policy they could purchase as an individual. This may be the case, but it often is not and many pay far too much in monthly premiums during periods of extended unemployment.

We expect to get a group or quantity discount when we purchase things in bulk. Therefore, we expect that COBRA will be less expensive than a policy we might purchase directly from an insurer.

Why is COBRA So Expensive?

The reason this is often not the case is that group health insurance policies insure people who, in the aggregate, have more claims most years than those who purchase individual or family policies. This is because in most areas the medical insurance companies are not allowed to deny coverage for employer sponsored policies based on preexisting medical conditions.

For most Americans in most situations COBRA lasts for 18 months. Consumers who have continued their COBRA coverage for more than a few months are often dismayed when they finally start looking at prices and other information. They are dismayed because they realize that they should have sought questions and answers earlier. They could have lowered their families’ bills had they received the price quotes post haste.

Insurance companies that sell to groups to insure their workers often also offer options to cover the health care of adults and children who don’t qualify for insurance benefits through their jobs. They will invariably charge more for the employer-sponsored plans. This is because they expect to be paying more for the claims of those they were not allowed to underwrite.

COBRA is an excellent option for those with medical conditions who may not be able to qualify for an underwritten policy. This is provided that they can afford the program. Eligibility is not enough.  Often the law forgets about affordability. If one cannot afford the premiums they in effect haven’t qualified for the policy.

The bottom line is that you shouldn’t pay higher rates than you should for health insurance. This is especially true when you are not working. Use the form at the top of the page to find out what you should be paying for your policy.

It is obvious that a policy that covers less is a less valuable policy. If the deductible is the only criterion that one considers, a high deductible or catastrophic health care coverage is a less valuable policy.  However there are other criteria to consider and therefore in many cases these policies are better for many individuals and families.

There are two big reasons why one should not automatically reject a catastrophic health care plan with a high deductible.

• A deductible is only one of the three main medical insurance cost shares.
• The savings realized with the premium that is low enough can make these plans more more affordable in the long run.

Since the deductible of a policy is only one cost share, one can inappropriately reject a high deductible plan in favor of a lower deductible plan. It is important to look at other information as well. Copays and coinsurance can add up. Many people don’t look at these cost shares and wind up paying a fortune in cost shares on their low deductible policies.

Copays aren’t only the small sums you might pay for service you get when you see your doctor and prescription drugs. You can have a copay for emergency room visits, hospital stays or outpatient surgeries as well. A $500 copay for each visit to an outpatient surgery center can destroy a family’s long term savings if a child needs multiple surgeries.

Coinsurance is also a factor. If there is a high cap on the coinsurance amount, this cost can be quite onerous as well.

It is also important to understand how the out-of-pocket maximum works on your policy. An out-of-pocket maximum generally does not apply to copays. This means that you can go bankrupt paying copays to your medical doctor, pharmacy, hospital and other providers long after you have met your out of pocket maximum.

When comparing major medical and other health care polices, be sure to consider all the cost shares. These cost shares include:

• Deductibles
• Coinsurance
• Copayments
• Out of pocket maximums

One pays the higher monthly cost of medical insurance policy with no deductible each and every month. However, most only pay their full deductible occasionally if they pay it at all. The money saved during the good years usually far outweighs the cost of occasionally meeting one’s deductible.

After looking carefully at all the factors in the plans offered to you by an agent or by your employer, you are likely to find that an affordable catastrophic healthcare plan is a better deal. Be sure to consider all the cost shares when considering insurance plans. Be sure to take into consideration the premiums for the coverage as well.

When people ask questions like “at what age should you buy long term care insurance,” I think that a false assumption is made.

(Get rates for nursing home insurance coverage.)

That false assumption is the idea that nursing home insurance is only needed by the elderly. Although the majority of nursing home residents are over age sixty-five, about twelve percent are under age 65. This statistic came from this table.

A young person who has had a bad accident or who has a debilitating disease may find him or herself in a nursing home. Those with no family members who are willing or able to take care of them are particularly at risk.

Will your health insurance cover nursing home stays?

Probably not. Most health insurance policies provide limited coverage for stays in a skilled nursing home facility, but few provide any coverage for intermediate care or custodial care. Most people in nursing homes are in custodial care facilities.

Purchasing nursing home insurance at a young age can mean that you get a much lower price. The rates for most policies do not go up as you age. You can purchase a policy that has built in inflation protection. This can mean that you lock in a low price, but do not have to increase your protection as you grow older.

If vision insurance is a big part of your decision-making process regarding which medical insurance policy to purchase, you may be letting the tail wag the dog. Eye insurance benefits are minor benefits when compared to the rest of the policy.

This is not to say that our eyes are unimportant. We get more information about our environment through our eyes than through our other senses.

However, the standard medical policy will cover medical expenses associated with most diseases and injuries involving our eyes. The typical medical insurance policy will not cover eyeglasses, contact lenses or eye exams, however.

Policies promising eye insurance for individuals as an extra benefit will usually cover the exam. Sometimes these policies will also cover a portion of the expense of corrective lenses.

Of course it is better to have coverage for your glasses and the exam if you don’t pay extra for it. If two policies have similar benefits and similar prices and one has vision benefits, that policy may be better.

However, one should look at the cost of paying for vision-related services on their own and compare that cost with the additional premiums that they might pay for vision coverage.

You may be able to get an exam from a local ophthalmologist at a reasonable price. You may be able to purchase quality eyeglasses at a from a discount provider. (I was able to purchase glasses that I am very happy with from 39 dollar glasses. Save 10% on any purchase from 39DollarGlasses.com.)

For many if not most people, COBRA will be more expensive than other options an individual may have. COBRA merely allows a recent employee to be insured by a policy that current employees have.

COBRA is group health insurance coverage. Group health insurance coverage is usually more expensive than coverage available to healthy people who buy through brokers.

Unlike current employees, the former employee is unlikely to have the cost of their policy subsidized by the employer. So this is usually not the cheaper option.

Other health insurance options (that may be much cheaper) include:

• An individual or family policy purchased through an agent or broker
• A policy from a spouse’s employer
• Coverage on a parent’s policy

A private medical insurance policy is usually a much cheaper option than COBRA. This especially true for healthier people. This includes many of those who have relatively minor conditions such as high blood pressure or high cholesterol so long as those conditions are under control.

A policy from a spouse’s employer can also be a bargain. However, in many cases an employer will subsidize their employee’s portion of the premium but will not subsidize the employee’s dependent’s portion of the premium.

This option is therefore often more expensive for dependents who can qualify for policies on their own.

Coverage on a parent’s policy is now available for children up to the age of 26. This has been federal law since October 23, 2010. This is often a good option for children who have significant medical issues.

Besides cost, there is one more major issue that makes COBRA less advantageous. How long does COBRA last? For most people in most situations it lasts for only 18 months. This means that for those who are not close to Medicare eligibility taking this option postpones the problem instead of solving it for the long term.

COBRA may be a better option for some people in some circumstances. However, one should investigate other options before making a decision. It is important to note that since one can opt out of COBRA at any point, you do not have to keep COBRA for the entire typical 18-month period.

The cost of medical insurance per month depends on many factors. These factors include:

• the number of people to be insured
• their health history
• their ages
• their genders
• their home zip code
• the policy desired
• the policy options selected

Since there are so many variables the best way to determine your rate is to request quotes for monthly health insurance rates on a website like this one.

The prices in the article are based on the rates available to people in the State of Connecticut during the month of April 2011.

How Much Is Health Insurance for a Family?

As mentioned above, there are many factors that affect a health insurance rate. However, smaller, younger families will tend to pay less than larger, older families.

Typical rates for a young healthy couple where both spouses are 22 years old might range from $200 monthly to $800 monthly. (The ages and genders of the children won’t have much impact on the rate.) This assumes that the couple doesn’t need maternity coverage. Plans with maternity coverage can cost $1,200 a month for this hypothetical young couple.

The differences in the prices are based primarily on the amount of risk the policy holder is willing to take. The $200 a month policy has a $10,000 annual deductible. The $800 a month policy has a $1,500 annual deductible.

An older, larger family will pay more for similar coverage. A healthy family with three children where the two parents are both 55 might pay $600 per month for a high deductible policy. They could pay $2,000 a month for a policy with a $1,500 annual deductible.

How Much Is Health Insurance for One Person?

A healthy 22 year old man might pay $90 a month for a high deductible policy. His rate might be $500 or more for a low deductible policy.

A woman of the same age can expect to pay $112 a month for the high deductible policy and over $700 for the low deductible policy. Women tend to see doctors more often than men during their childbearing years even when they are not pregnant.

Atypical monthly health insurance rate for a 55 year-old woman might be $248 for a plan with a $10,000 deductible. Her rate for a $1,500 deductible policy might be around $900 a month. The rates for a man the same age will be very similar.

How Much Is Health Insurance for a Baby?

Most insurers will charge less the younger you are. However, very young children tend to need more medical care than older children. Because of this some companies charge more during the first two or three years of life.

Few companies are offering one-person policies to children today. At least one parent will need to be on the policy for the policy to be approved. This is an unintended side-effect of health care reform.

How much is health insurance in America?

The cost is somewhere between too much and way too much!

We can blame some of the cost of the current policies on health care reform. However, anyone who has been paying attention to the health insurance industry will know that health insurance prices have been steadily increasing for years and years.

Some of the additional cost of health care reform is the price for the mandated benefits which make the policies better. Most of the rest of the additional cost is the result of insurance being available to certain persons that would have been denied in the past.

The monthly cost for health insurance may be higher than we would like. However, the cost of health insurance is almost entirely driven by the cost of medical care. Until we address the cost of care by helping Americans lead healthier lifestyles, the cost of health insurance in America will continue its upward climb and may even increase at a faster pace.

The subject of no deductible health insurance plans often comes up when speaking with clients. Many people want a zero deductible policy that has a low premium.

Unfortunately that combination doesn’t exist. Medical insurance policies with no deductible or with low deductibles will almost invariably have higher premiums.

There are two reasons why I generally advise people to look at other plans to cover their families. Zero deductible doesn’t give the consumer all the information he or she needs to make a decision.   Even when these health insurance plans with no deductible do give better coverage than their high deductible cousins, it is at a price that is usually greater than the extra coverage is worth.

This usually is the case with Blue Cross, Humana, United HealthCare or any other insurance company. The high deductible policies usually save their policy holders enough to make their coverage so much more affordable even with the extra exposure.

When people have only had health insurance as part of the benefits package offered by their employer, they are usually shocked when they hear the price of these types of policies. Since their employer paid part of the premium, they have bad information regarding the price of this type of coverage.

A no deductible policy is a very different animal than a policy with no cost shares. Medical insurance policies have three major ways to get you to pay for part of the medical care you receive from doctors and other providers.

The main three cost shares for medical expenses are:

• Deductibles
• Copays
• Coinsurance

You can have a policy with a zero deductible that has high copays. This can mean that you won’t save as much as you thought you would when you have expenses for medical care.

When purchasing health insurance plans, the consumer should be sure that they are getting a dollar’s worth of coverage for each dollar they spend. If you spend an extra $1000 each year for a low health insurance deductible policy when compared to the prices for a moderate deductible policy, you should not only get a better policy but you should get a policy that is at least $1000 better per year. This is rarely the case.

Before deciding to purchase health insurance with no deductible, be sure to look at plans with higher deductibles also. See what else you might have to pay in copayments and coinsurance when you need medical care from a doctor or other provider. And do the math to make sure that you will get what you paid for.

How long does COBRA insurance last? The answer you will hear most often is 18 months, but that isn’t always the case. The law is more complex. The length of time is mainly dependent on the qualifying event.

(Non-group private medical insurance policies are often cheaper than COBRA. Many insurers that provide COBRA health insurance also provide similar non-COBRA coverage at a lower price when they sell to an individual or their family.)

Most former employees have the option of keeping their health insurance benefits by acquiring a COBRA policy for 18 months. This gives them the right to keep their group health insurance, but their employer no longer pays for it. However, that is only for the typical scenario.

There are scenarios where COBRA benefits can be kept for a shorter or longer period of time. In some circumstances COBRA health insurance plans can be kept for 36 months. Since not all employers are required by law to provide this health insurance continuation option, some employees will not be offered COBRA in the first place or will have it end early.

Certain circumstances can cause your COBRA eligibility to end before the minimum period. Conversely, the law allows employers to offer you COBRA for longer periods of time, but few do so. Employees terminated due to “gross misconduct” may not be offered a COBRA insurance plan.

COBRA is only mandated if an employer had 20 full time employees at least half of the previous calendar year and provides a group health insurance policy for its current employees. (Part time employees count towards the 20 employee minimum as well. A part time employee will not count as a half or a third of a full time employee. The percentage depends on how many hours the part time employee works.)

This means that COBRA plans might not be offered by smaller employers. It also means that COBRA may end if the former employer no longer has 20 employees or no longer provides group health insurance to its current employees.

Eligibility for COBRA also ends if no one pays the premium for the policy

How Long Can I Keep COBRA?

If the employee became eligible for Medicare benefits within 18 months of their COBRA eligibility, their spouse and dependents will probably be eligible for a continuation of their medical benefits through COBRA for the remainder of the 36 months that started with the date of Medicare eligibility.

If the spouse or dependent loses their health insurance coverage benefits due to a divorce, they will probably qualify for 36 months of COBRA.

If the spouse or dependent loses their health insurance coverage due to the death of the employee, they will probably qualify for 36 months of COBRA.

If a dependent child loses coverage due to their age, they will probably qualify for 36 months of COBRA.

In most other circumstances or qualifying events, the employee and his or her spouse and dependents will qualify a continuation of their health insurance benefits for 18 months through a COBRA policy.

You can read more about how qualifying event impact your eligibility and about the COBRA law in general by visiting the Department of Labor’s website.

Most people who are insured through a COBRA continuation of their health insurance policy will find that their employer no longer pays any of the cost. This means that your premiums can be higher than for a private health insurance policy, even if it is with the same insurer.

You can request quotes for a private medical insurance policy through us to see if an individual or family policy will be less expensive than what you pay in premiums for your COBRA policy.

If you have a homeowner’s insurance policy, a condo policy or an apartment renters insurance policy you have coverage for your personal jewelry. However, this coverage is probably not enough to cover your diamond engagement ring or other expensive jewelry.

Is $1500 Enough To Cover Your All Jewelry?

Most homeowner’s insurance policies are HO-3 policies. This is probably the case regardless of which insurance company underwrites your policy.

These policies may do a good job of protecting your home. This may not be the case for your jewelry. An unendorsed HO-3 policy covers only $1500 of jewelry. A condo or renters policy may cover less.

The jewelers you patronize may want more than your unendorsed policy will reimburse you if your personal jewelry were stolen from your home. If the money you’d get after filing a claim would not be enough you may want to increase your coverage.

If you want more coverage you can contact your broker and request that your insurance company add an endorsement to your coverage. This can increase the limit your homeowners, condo or renters insurance policy will pay for jewelry. If you need more coverage than an endorsement will provide, you may need to purchase a separate jewelry insurance policy.

Insurance appeal letters will sometimes cause a health insurance company to ultimately overturn a denial and approve an applicant or approve that applicant at a lower rate. It never hurts to write an appeal letter. However it is not the only option to get an insurance policy for heath care after you have been denied. It is not usually the best option.

Unless you have been denied or charged extra based on incorrect or outdated medical information, you are not likely to get your insurance company to change its mind. A better strategy for most is to apply to a company with different underwriting guidelines.

Underwriting is the process of deciding who to insure and what rate class to assign to those who are approved. This process involves looking at the application and sometimes requesting medical records from a doctor or other health care provider.

Underwriting is done differently by different companies. Although a person with an active cancer or a recent heart attack is likely to be denied by all companies that medically underwrite their policies, there are a lot of areas where the insurers underwrite differently. They can look at the same information from the same medical provider and make different decisions.

The carriers will have different height and weight guidelines. They will have different ways of measuring the impact different conditions will have on your potential claims and therefore insurability. So don’t think that if you have been denied for a policy with one carrier based on a provider’s report, that another carrier will make the same decision

An experienced agent can keep you from having to write an appeal letter. An agent who has a working knowledge of the underwriting guidelines of the health care insurance carriers in your area can point you in the right direction and help you avoid another rate increase or denial. Although the insurance companies never release all their “underwriting secrets,” they do share a watered down version of the guidelines with agents and brokers.

Health insurance for pre-existing conditions may be available to you. The availability is based on the condition you may have and the various medical guidelines of the different companies that provide health insurance benefits in your area.