Quick Insurance Tips

You may be paying for coverage you don’t need, have the wrong type of coverage or simply paying too much if you haven’t reviewed your coverage recently.  Your needs change and this may mean that you need more, less or different coverage.  Insurance policies go up and (occasionally) down in price on a regular basis.  The plan that was priced best last year might not be today.  For these reasons, your insurance policies and your need for insurance should be reviewed regularly.

If you purchased your health insurance policy several years ago, your needs may have changed dramatically since then.  You may be ready to have children.  You may have a new child.  You may have a child who is now an adult.  A few years can mean major changes for many families.

At that time, you may have been concerned about your young child’s frequent doctor’s visits.  That child may not bee so young now and you may want to purchase a different kind of policy.

You may have needed insurance coverage for pregnancy then but not need it now or vice versa.  It is costly to pay for maternity coverage and not need it.  It is also costly to need it and not have it.

You may have purchased your plan before the high deductible health plans and Health Savings Accounts were available.  There are significant tax advantages to these programs and you may want to investigate these plans.

Medical insurance companies change their rates about every 12 months.  The policy you purchased three years ago may have had rate increases that are above the average for similar policies.

If your health has improved you may benefit from purchasing a new policy.  If you’ve stopped smoking or lost weight you may qualify for a lower rate.  Some pre-existing medical conditions are viewed more favorably by insurance companies as they age.  Many insurance companies will charge a higher rate if someone has had certain types of surgery within the last year.  If it is now five years and there has not been a reoccurrence, you may qualify for standard rates, but only if you reapply.

You or your family has probably changed in the last several years.  Health insurance rates change every year.  The medical insurance industry changes all of the time.  For all of these reasons, reviewing your coverage and getting current private health insurance quotes is likely to help you save money.

Should you pay for your insurance on your credit card?  Will this make your insurance cost more or less?

Many carriers are encouraging their policy holders to pay via credit card today.  This has both pros and cons.  It may mean that you have coverage when you need it.  It may also mean that you are paying 20% extra for your policies and are getting deeper in debt.

By allowing your insurer to debit your credit card for your auto insurance or health care policy, you may keep your insurance in force longer.  This may mean that an accident or other even is covered when it might not have been. Forgetting to pay an insurance bill can cost you thousands or even millions.  There is definitely a positive side to paying for insurance via a credit card.

If you have a medical condition or have gained weight that you acquired since you purchased your health insurance policy, this can be especially important.  Missing a payment may mean that you are denied coverage or charged extra for the same coverage you had before.

Your health insurance company is not allowed to drop you because of a significant health condition or a state of obesity that you developed since your healthcare policy was approved unless you cancel your policy or allow it to lapse.  If you do so, you can be treated as if you are a new client.  This can mean that you are subjected to medical underwriting all over again.

If you are in the habit of paying your credit cards off each month before any interest is assessed, there no downside to using a credit card to pay your monthly insurance premiums.

However credit is overused today.  How would you feel if you were charged 20% more for everything you buy because of your race, gender or religion?  When we use a credit card to pay, we often pay an extra unnecessarily.

Insurance plans that will charge your credit card by default may be willing to send you a bill in the mail or bill a checking account.  If you are concerned about excess interest charges, you may want to contact your insurer about this.

A preexisting health condition can prevent you from qualifying for medical insurance.  Timing your applications and medical examinations can keep you from being denied coverage in certain situations.

Timing your Medical Exams

A preexisting condition becomes an insurance issue when one of three things happens.  You receive medical advice for the condition. Your have symptoms that would cause a prudent person to seek medical advice.  Your insurance company discovers the condition during an exam.

If you are considering changing insurance policies you may not want to see a doctor until you have been approved by the new company.  Why?  If you are genuinely unaware of a medical condition and haven’t had symptoms that would cause you to seek medical attention an insurance company should not hold that condition against you unless it is discovered during their underwriting process.

If you have a medical examination just before applying for a new policy, your physician might discover a condition that would keep you from being approved for your policy.  You may be better served if you wait until you are covered by the new policy before you are examined.

Of course, there may be situations where waiting even a week to have an exam could have serious repercussions.  On the other hand if a serious condition is discovered a week earlier the timing may save your life.

However, if the treatment for the condition isn’t covered because your old policy expires shortly after your diagnosis, you may not be able to complete your treatment.

This is not medical advice. You will have to weigh the pros and cons of waiting verses not waiting to have an exam.

Aging of Preexisting Conditions

Not all medical conditions get worse with age.  Some are treated more favorably as they age.

A person who was diagnosed with a condition too recently may be denied coverage even for a minor condition.  This is because the insurance company wants to make sure that the diagnosis was accurate and that the treatment prescribed works.

A person who was diagnosed with asthma a year ago and has their symptoms controlled with medications will likely be approved for a medical policy.  A person who was diagnosed a week ago may not be.

Often people with serious conditions like cancer are able to qualify for medical coverage.  This depends on the type of cancer and how long it has been in remission.  Five years without treatment or need of treatment can be enough for many cancers.  The waiting period for other cancers is much shorter.  For certain others the waiting period is longer.

Ask your insurance agent if he or she for guidance if you are concerned about being denied.  You may be able to keep a rejection off your insurance history simply by waiting to apply.

If You are Denied Health Insurance

Be aware that different insurance companies may underwrite the same condition in different ways.  Be sure to check with several companies if you have been denied insurance due to a medical condition.

You should also be aware that different types of policies will have different rules.  A group health insurance policy may accept you regardless of your medical history.  This may be true with state-sponsored health care programs.

Until we have Universal Health care, preexisting conditions will have a devastating impact on certain families and individuals.  You can reduce your chances of being denied a health insurance policy by delaying a health exam until after your new policy is effective (so long as it doesn’t jeopardize your health).  You can also reduce the chances of getting a denial by waiting to apply until a recently diagnosed illness is considered stable by a new insurance company.

What are the Advantages of Universal Healthcare?

How much will universal healthcare cost the US?  It may be that Universal healthcare benefits the United States far more than it costs us.  Universal healthcare has the potential of helping people stay healthier and thereby keeping them in the workforce longer.  This can result in people spending more time being tax payear as opposed to being “tax spenders.”  This may mean increasing our tax base.  This may more than offset the increased taxes that we will have to pay to afford universal health care.

A Universal healthcare program that improves the lives of working Americans can benefit all of us.  A thirty year old working woman who today cannot afford the right preventative care may become a forty year old disabled woman tomorrow.  If she becomes eligible for social security benefits or other governmental programs at forty, she becomes a tax spender instead of a tax payer.

This woman could be dead at fifty from a cause that could have been easily and inexpensively prevented in her thirties. This of course stops her from being a tax spender, but also prevents her from being a mother.  This can mean that her children grow up to be less productive citizens than they would be otherwise.  The cost to her children cannot be measured, but there is an economic impact on our country that can be estimated.

In this regard, this is very different when compared to Medicare and Medicare Supplement mandates.  Medicare, for the most part, extends the lives of Americans who are not working.  Although this is an important goal, it extends the “tax spending” phase of the typical beneficiary.  As we improve the health of people in their seventies, we extend their lives and in so ding increase the amount of money we pay in Social Security.

The debate on Obama health care proposals and the proposals of others focuses on our moral obligations to those less fortunate.  This is a great motivator for many people.  However, even for those who would love to help, the idea of substantially increasing our taxes with no personal benefit is unpalatable.

I don’t claim to have the statistics associated with the above argument or the other pro and cons on universal healthcare.  However, there are benefits other then the warm and fuzzy ones that will offset the impact of the possibility that we will pay higher taxes with universal healthcare.

Most people want their employer to offer health insurance, however if you are a business owner the benefits of employee retention and recruitment have to be weighed against the rising costs of group health insurance coverage. 

Even if you shop around and compare health insurance rates for a small business, you may find that none of the rates are affordable.  You may be forced to eliminate or reduce coverage because insurance carriers cannot keep prices down in this environment.  Doctors charge more; hospitals charge more; pharmacies charge more.  These costs have to be passed on to the insurance company. The insurance company in turn has to pass these costs along to businesses that purchase group insurance.

Insurance costs are rising faster than general inflation, wages and business income.  There is no indication that this will change in the near future.  This leads to a great deal of unpredictability and makes planning a long term budget for your company difficult.

Offering health insurance to employees in an environment where rates rise faster than your company’s income forces you to make difficult choices.  You can reduce the company’s profits and maintain your group health insurance.  You can eliminate health coverage all together and have angry employees and potentially lose key employees.  You can reduce coverage, which may have the same effect.

If you fail to offer health insurance, you may have a difficult time recruiting new employees.  However, by not offering the coverage, you may be able to offer a more competitive wage.  This may offset the competitive disadvantage of being a firm without health care benefits.

This is a win-win strategy for only a small percentage of businesses.  Employees can often purchase individual or family health insurance at a lower cost than an employer can purchase it.  Group health insurance plans in Los Angeles and in many major cities can cost much more than similar health insurance plans offered to healthy individuals.

Unfortunately this strategy is only works for healthy employees who have healthy families to insure.  Many people have preexisting medical conditions that will prevent them from finding affordable health insurance.

For those that can medically qualify for a private health insurance plan a pay boost equal to the amount your business spends on health insurance is likely to be a boon.  However, other employees may be left out in the cold and harbor resentment against the company.

Your business and your employees may benefit from eliminating group health insurance benefits and using some of the savings to increase employee wages.  This can be great thing if your employees are able to purchase medical coverage through a private insurer at a lower price. 

Unfortunately, this will only happen if all of your employees and their families are healthy enough to qualify for an underwritten private medical insurance plan.  One employee with medical issues can keep this plan from working.  This is true of new employees as well.  Therefore, having a stable workforce is also important to making this work.

In tough economic times, business owners have to make difficult decisions.  Today many business owners are choosing not to offer group health insurance to keep their costs down.  Many business are being forced to chose between losing employees or losing money by keeping their health plan. 

What will it cost you to have a medical emergency but no medical insurance?  It can cost you everything that you have worked for.  Finding ways to reduce your medical insurance costs without eliminating coverage can mean that you get to keep your house, your credit and your health.

Health insurance can be very expensive and because of that it unfortunately isn’t an option for many people.  Some, perhaps most of those without coverage can’t avoid it.  Some who technically can afford it are forced to choose between buying health insurance and living in a safe neighborhood or sending a child to college.

If you are not in one of those categories, but are still considering going without health care coverage consider the fact that even in these recessionary times, uninsured or poorly insured sicknesses and accidents cause more people to go bankrupt and to be foreclosed upon than anything else.

There are ways to reduce your costs for health insurance without risking your financial future.  You can find plans that have similar coverage to the plan you are considering dropping that are less expensive simply by shopping around.  You may also be able to raise your deductible.  In so doing you may reduce your coverage and price without eliminating coverage entirely.

Shop for Health Insurance

Shopping around for insurance can save you a bundle.  There is often a wide variance in the price of health insurance policies that offer the same or similar coverage.  Many people fail to shop around for coverage. Many others shop once and never know that the plan that was the most competitive five years ago is one of the most expensive today.

If you need to insure a family, one of these “secret health insurance buying strategies” may help you lower your premiums.

Look at Low Cost High Deductible Health Plans

High deductible healthinsurance plans are often the best for many families.  These plans tend to be much less expensive than low deductible co-pay plans.  You will trade some coverage for the smaller things, but will probably be able to get excellent coverage for the catastrophic medical event.  You may be able to cut your costs in half with a high deductible health insurance plan.

These plans may also help you save on income taxes as well.  Owning a HDHPs or high deductible health plan can qualify you to open a health savings account.  HSA plans are similar to Individual Retirement Accounts or IRAs.

An HSA can also help you spend less on medical care.  A debit card that accesses your HSA funds will allow you to spend pre-tax dollars on medical and dental expenses, and thereby turning a $100 expense into a $72 expense for many Americans.

By shopping around and or purchasing a higher deductible health insurance policy, you can reduce your costs without risking the loss of your home and financial future.  Consider these options before considering dropping your health coverage entirely.

The risk of paying higher taxes with universal healthcare should be weighed against not just the benefit of easing of pain and suffering and extending life, but also the benefits of the tax dollars that might be generated by those who aren’t hampered by the current system.  The person who is disabled today because he couldn’t afford health care when his condition was preventable might be working today.  He might be paying taxes instead of collecting from social security if we had a universal healthcare system.  The woman who today who is shackled to her job because a family member is uninsurable in the private health insurance market might be the person who invents the next great thing.

Better Preventative Health Care May Reduce Our Costs

Although it is true that the poor have access to health care today, the access is biased towards expensive care one might need in an emergency medical situation as opposed to the relatively inexpensive care one might need to prevent that emergency situation.

There must be countless men and women who are currently out of work and on the dole who would love to be working and supporting their families.  Few of us want to be out of work.  Fewer of us want to be sick and out of work.

In many cases the disabled former tax payers had relatively minor preexisting conditions that turned into major disabling conditions.  These conditions were only allowed to become major medical conditions because the person couldn’t afford proper preventative care.  The cost of this care pales in comparison to the cost of losing a tax payer and gaining a “tax eater.”

A Lack of Health Insurance Options May Reduce Innovation

Many people are afraid to leave their jobs because they are afraid of losing their healthcare coverage and slows our economy. This fear keeps people shackled to jobs that no longer fit them.  A person who has the ability and experience to do something bigger may stay at a job because the opportunity to do something else means that they will leave their coverage behind.  This doesn’t happen in the other countries that use a universal healthcare system.

The next Bill Gates or Thomas Edison may be forced to stay in their current job because they have a daughter with Crohns disease or a genetic defect.  They are not going to take the risk of leaving their job and create the next computer innovation or light bulb.  We lose and they lose.

A major innovation isn’t necessary for this to hurt us.  Small improvements multiplied by thousands or millions of workers could be enough to turn our economy around and drive us forward.  If John is forced to stay with a company with no advancement opportunities because of health insurance issues, he can’t work at another company that can use all of his abilities and make that company great.  If the same is true for Jane and Barbara and Dave… we are losing a lot of production due to this forced underemployment that is driven by the current system.

If universal healthcare can increase the number of tax payers and reduce the number of “tax-eaters” we may find that it improves our economy.  By helping those in need we may be helping every American whether rich or poor.

Buying a zero deductible health insurance plan can mean that you pay extra for lousy coverage.  Although this isn’t always true, a zero deductible policy can have other cost shares.  Your monthly premium is likely to be higher than that of a plan with a moderate deductible.  You may also pay more in coinsurance or co-pays.

A health insurance policy that allows its policyholders to go to the doctor or hospital without any money out of their pockets will tend to be overused.  Insurance policies that are overused will cost the carrier more and therefore will cost you the consumer more.  A policy that has a zero deductible and no co-pays or other cost shares will be prohibitively expensive should an insurance company decide to offer such a healthcare policy.

If you would like to have fixed, predictable healthcare costs, the best option for you may be a high deductible health plan with a health savings account.  Believe it or not a high deductible plan may be your best zero deductible plan if your couple it with a health savings account (HSA).

An Aetna zero deductible health insurance policy offered to a Connecticut couple in their fifties might cost them $800 a month.  This plan has no deductible but it has other cost shares.  They could pay up to $7,500 in coinsurance each year.  This is in addition to any co-pays.

A high deductible health plan from Connecticut’s Anthem Blue Cross Blue Shield with a $2,500 family deductible might cost the same couple $600 a month.  If you divide the $2,500 deductible by 12 you come up with $208.33.  This means that this couple’s maximum costs when you add their cost shares and their premium together amount to about $810 a month. 

For $10 more a month, they get a true zero deductible plan since this plan has no other cost shares.  But wait there’s more… if they have low or moderate medical expenses, they get to keep any of the $2,500 that they don’t spend.  There is still more… they can probably put the $2,500 into an IRA-like account and reduce their taxes.

Being creative with your health insurance policy can mean that you save significant amounts of money on your coverage. 

A zero deductible health insurance policy may be cost more than it is worth.  However, if you are willing to be creative and look into your options with high deductible health plans and health savings accounts, you may be able to get better coverage for the same or less money.

Optional private medical insurance benefits such as prescription insurance may or may not be worth the extra money.  A bad decision here can mean that you are paying a $100 in extra premiums and getting something less than $100 in value in return.

Prescription Insurance Comparison

There are a lot of companies offering cheap health insurance and prescription coverage.  When evaluating these insurance plans verses similar plans that don’t offer prescription coverage, look at the benefits verses the costs before making a final decision.

Often the prescription coverage will have a low annual dollar limit.  This reduces the value of this benefit.  Typically the base policy limits are in the millions on a health plans offered to individuals or to the self employed. Prescription insurance limits however are usually lower.

You will need to convert the monthly cost into an annual cost to make an easy comparison.

If your Aetna insurance prescription plan has a $5,000 limit and costs an extra $200 a month, you are spending $2400 a year in order to have the potential of receiving $5,000 in return.  In this scenario, the most you can lose by not having this coverage is $2,600.  This is the difference between the cost of the coverage and the maximum benefit you could be paid.

This also means that the insurance company would have to cover $2,400 in prescription benefits in a given year for you to benefit from buying this insurance coverage.  This $2,400 is the cost of the prescriptions after your co-pays or other cost shares are deducted from the cost of the drug.

You may benefit from getting a discounted price from your pharmacy when you have certain insurance policies, however you may get the same discount whether or not you have the prescription rider.  This discount should be factored in before making a final decision on the coverage.

However you may not need a health insurance or prescription rider to get cheap Rx. Insurance isn’t necessary to get prescription discounts. You may be able to get your generic prescription for a few dollars at Wal-Mart or one of the other pharmacies that are aggressively pushing discounted drugs.

When buying insurance or anything else, make sure that you receive a dollars worth of value for every extra dollar you spend.  The cost for prescription coverage sometimes is too high for the benefits received.  However sometimes it is a lifesaver.  It all depends on the price and the benefits.

When evaluating health insurance plans, the best way to do so is to look at the total price that you might pay when you add the monthly premiums with the costs that you might pay in deductibles, co-pays and other cost shares.  This means that often a low cost health insurance plan is often the most economical and provides the best coverage.

It can be a lot of work but the best way to evaluate health insurance plans is looking at what you would pay using three scenarios.

The first scenario should be one in which you have no medical expenses for the year.  In that scenario you would pay your monthly premium times twelve and nothing else.  Obviously in this scenario, the health insurance with the lowest monthly premium is going to be the best plan to have.

In the second scenario, you could look at how much you would pay if you had an accident or a disease that caused you to have very high expenses in your physicians office, pharmacy and hospital.  In this scenario, you would pay your monthly premiums, plus your full deductible, coinsurance, co-pays and or other cost shares.  The winner in this situation might surprise you.  Often the winner here is a moderate or a high deductible plan.

In the third scenario, you might look at what different insurance plans would cost you in a year where you had moderate expenses.  Again, add your monthly costs for the premium times twelve plus the costs of any money you would pay towards your co-pay and other cost shares.

Only after you have seen what your total cost would be in different scenarios should you decide on a health insurance policy to purchase.  The same plan is unlikely to win all of the “face offs,” however, this will give you a good idea of how much each plan really costs.

The above assumes that you have done your homework comparing companies and have excluded the “Dewy Cheatum and Howe” insurance companies.  Getting the best price will do you no good if the insurance company isn’t stable or doesn’t pay claims like it should.

Usually a low cost or moderately expensive policy is a better buy because the money you save in premiums will go a long way toward paying any medical bills that the insurance policy won’t cover.

The above strategy is the one that will help you find the best policy for your needs.  It does take more work, but you may save thousands of dollars each by doing the math to determine your overall costs in various scenarios.  The best policy may not be the one you thought it would be.