Quick Insurance Tips

Consumers should be wary of policies advertised as having no deductible. These policies are often both overpriced and misleading.

They are overpriced because they are overused. A policy with a deductible will be used less often because people are less likely to visit a doctor when they know that they will have to pay more of the cost.

They are misleading because almost invariably a policy with no deductible will have other cost shares. You can wind up paying a lot in copayments and coinsurance.

Copayments don’t have to be small amounts. Some policies will have hospital copayments of hundreds of dollars.

Coinsurance is typically 20% on a health insurance policy. Some zero deductible policies will have coinsurance amounts of 40% if you visit in network doctors. The coinsurance can be higher if you visit not network doctors.

You will probably get the best value when you purchase medical insurance policies with moderate or high deductibles. Zero deductible policies tend to offer the worst value.

Your insurance deductible is one of several cost shares that you may have on your insurance policy. Cost shares are what you the policyholder have to pay when you have a claim.

On car insurance policies and homeowners insurance policies your deductible is applied to each claim. On medical insurance policies, the deductible applies to claims made over a period of 12 months. This can be a calendar year, or a year that starts on the date the policy was effective.

Car Insurance

When you buy car insurance your policy only has a deductible if you have physical damage coverage. Physical damage coverage pays you if your car is damaged by one of the covered perils. One of the perils is vandalism.

If it costs $3,000 to repair your car after it is vandalized and you have a deductible of $1,000, your insurance company will pay $2,000 towards the repair. The amount of your deductible is deducted from the amount of the claim.

On a car insurance policy the deductible only affects the physical damage coverage. This part of your policy pays you for damage to your car. Your deductible will not apply to payments made to fix another party’s car.

(The section of the policy that covers property damage and bodily injury payments to others is the liability section. This section never has a deductible.)

The only cost share on auto and homeowners insurance policies is the deductible. This is not the case for many medical insurance policies.

Health Insurance

You can expect to have more than one type of cost share when you purchase health insurance coverage. You might have copayments, coinsurance and a deductible.

You might have no cost shares on certain types of claims; you might have more than one type of cost share on other types of claims. A preventive care exam might not have a deductible or any other cost share. A doctor visit for the flu might have both a deductible and a copayment.

There is a lot of inconsistency to the way these cost shares are applied. Copayments, coinsurance and deductibles can be applied differently to different types of expenses. The rules will be different on different policies. This is often the case on different policies offered by the same insurer.

A copayment is paid per incident. You might have a $20 copayment for each prescription refill. You might have a $30 copayment for each doctor’s visit.

Coinsurance is always expressed as a percentage. The most common coinsurance percentage is 20%. For certain types of claims, you may have to pay your 20% coinsurance.

You can expect to have annual limits on your deductible and your coinsurance. This reduces the amount you have to pay if you have a catastophic claim.

Your will have only one deductible over the course of the year. You can reach this deductible in by having one larger expense or several smaller expenses. If you have a $2000 deductible, you might satisfy that deductible by one $2,000 visit to the emergency room or by ten $200 visits to your doctor.

Coinsurance is usually limited by your out-of-pocket maximum or stop-loss. When you have paid a certain amount, you can expect to stop paying coinsurance. You might have a maximum coinsurance of $2000 on some policies. Your copayments may or may not be limited.

If your policy has a deductible, you will probably have to satisfy your deductible before your coinsurance goes into effect. In another words if you have a $1,000 deductible, you will have to pay the first $1,000 of applicable expenses over the course of the year. You will have to pay the coinsurance percentage on any expenses that you have until you have met your out-of-pocket maximum.

What Happens to an Insurance Premium when a Deductible is Lowered?

Higher deductibles mean lower insurance premiums and vice versa. Deductible choices give the consumer choice. The consumer can decide how much risk they are willing to accept in exchange for a lower price.

The objective when choosing a deductible should be to find the best balance between your risk and your monthly premium. Usually a moderate or a higher deductible will give the consumer the best value.

Health care reform has mandated that certain preventive care services by paid for by our medical insurance companies for those who purchased policies sold after September 23 2010. This will have a negative impact over the short term, but may have a very positive impact over the long term.

There are specific preventive care services that are covered. You can find a detailed list of the preventive care services on healthcare.gov.

This mandate states that these services they must be paid for without any cost shares such as deductibles co-pays or coinsurance. Because of this insurance companies have had to raise prices significantly on any policies that adhere to this mandate.

(A large part of the recent rate increases had nothing to do with health care reform. Most medical insurance companies have raised their rates by 10 to 30 percent a year over the last few years. Doctors and hospitals keep charging more and health insurance premiums have to cover those costs.)

Over the long run, these mandated preventive care benefits may lower our costs for health insurance. The forty-year-old who may not have otherwise gotten an exam may be able to avoid or postpone a heart attack because of that examination. If he has a heart attack at 60 instead of at 50 because of that exam, he will save the insurance company and us a lot of money. He will probably also live a happier and more productive life.

The preventative care mandates can have several positive effects. Our 40 year old friend may be healthier longer than he would have otherwise. He may therefore be a better parent. This means that his children are more likely to contribute to our society. He may have fewer sick days and be a more productive worker. He will help us all out by paying more in taxes and by not collecting as much in disability benefits.

Unfortunately, the benefits we accrue will come after the pain is felt. An exam today may prevent a larger medical expense that might occur in the future, but the precluded event is probably one that would have happened years from now.

Prevention and Health Care Reform a Good Deal?

If we are willing to experience some pain we may have significant gains down the road because of this provision. I say thumbs up to this health care reform mandate.

You can expect to pay $10,000 to $20,000 or even more for a normal non-Cesarean delivery. The cost of a Cesarean birth will cost about fifty per cent more.

The amounts that doctors and hospitals charge for various medical services varies widely even within the same region. To get an answer more relevant to you should contact your local hospital and any doctors you are considering using.

Also since prices are rising all the time, any cost figures in this blog post might have changed before you got a chance to read this.

After you have contacted one provider to get their costs, you may want to call a second and maybe a third. It may pay to comparison shop because often hospitals that are a short drive away from each other will charge very different prices. The same is true of obstetricians.

The importance of eye health and dental health cannot be overstressed. We all want to have good teeth and vision as long as possible.

Some medical insurance policies will include coverage for dental and/or vision. There are of course benefits to having dental and vision insurance, but it is important not to overpay for these added benefits.

Vision insurance is overvalued because many consumers believe that it covers more than it does. It is important to know what vision insurance covers and what it doesn’t so that you can make sure that you don’t pay too much for the coverage.

Eye insurance is designed to cover the expenses associated with corrective lenses. Usually the eye exam is covered completely or with a small co-pay. Sometimes vision plans will also pay part of the cost of prescription glasses or contacts.

Most health insurance policies will include coverage for medical expenses associated with eye injuries and eye diseases. Believing that only vision coverage takes care of these expenses can lead you to purchase coverage that you don’t need.

Dental insurance is also sometimes overvalued because often dental policies will have lower benefits than the consumer expects or will have waiting periods that the consumer does not expect. Knowing what is covered and what is not will help you make better decisions about health insurance.

Often you will benefit from having dental and or eye care coverage. You will often pay a lower price for care when you go through the network providers that are affiliated with your health insurance company. This can be an important benefit.

Insurance coverage for dental and vision can be a valuable addition to the insurance you own. However, it is easy to overpay for a vision insurance plan if you are unaware of its limitations.

So far, healthcare reform is backfiring. Laws intended to force insurance companies to insure more children have forced companies to insure fewer children.

Instead of allowing unhealthy and heretofore uninsurable children to get coverage, many insurance companies have decided to no longer offer health insurance to children who apply for non-group policies without a parent. Children who are or were approved for policies that start on or before September 22nd should be unaffected by this change.

In my opinion, our lawmakers should have seen this coming and done something differently. I’m not sure what they should have done differently, but they should have seen that the actions that they did take would have this result.

You can’t force a company to do something that would put them out of business. A law of congress cannot overcome an economic law anymore than it can overcome a law of nature.

Insuring all comers is so unprofitable that insurance companies have made mass exoduses in states where guaranteed issue laws have gone into effect. A similar situation is happening with this healthcare reform mandate.

The cost of an insurance policy for a child can be well under a hundred dollars per month. Many are as low as thirty five dollars a month. The cost of an operation for a sick child can be hundreds of thousands of dollars. This means that even one very sick child can dramatically affect the possibility of breaking even.

The insurance companies currently charge enough to cover the children who have major operations, but who were healthy when they got coverage or who got coverage at birth because they were added onto a parents’ policy.  However, the number and percentage of children who need expensive care can be paid for with the current rating structure.

When you add thousands or millions of children who will need major care in the near future, you overload the system to the extent that premiums cannot be raised high enough to pay for the care.  Why?  When you raise rates many of the parents of the heretofore profitable children will drop out of the system.  What happens next?  The rates go up again and more people drop out of the pool.  Since the parents of the children who need care are going to be more motivated to stay in the system. the ratio of healthy to unhealthy moves and keeps moving in the wrong direction.

An insurance company that opens its doors to all children regardless of their medical history will incur costs that could easily put them out of business. These children should get care. This is not my argument.

There is a honesty issue here.  We were told that we could insure everybody and it wouldn’t cost us anymore money.  Maybe that will be true in the long term, but I’m not convinced.

Maybe everyone deserves basic health care.  I’ll amend that.  Everyone probably deserves basic health care.

However, we don’t expect the grocery stores to go out of business feeding the poor. We shouldn’t expect insurance companies to give away money for healthcare to the extent that they have to close their doors either.

Not everyone needs errors and omissions insurance, but if you are a professional and worry about being sued, you might just be one of those who needs E & O protection!

An Errors and Omissions Policy can Protect You in Two Important Ways.

• It can pay a litigant the money they sue you for
• It can pay for the legal fees necessary to defend you against a suit.

In short an E&O policy covers your rear end and can keep a small mistake or a frivolous claim from ending your career.

In today’s litigious society, professionals get sued more frequently than they did a generation ago.  Professional liability policies like errors and omissions policies are important for not only doctors and dentists, but real estate agents and insurance agents.

There is also a trend towards suing nurses, dental assistants and other professionals who were rarely sued twenty or thirty years ago.

Errors and omissions insurance protects professionals from the liability that arrives from negligence, mistakes of omission or commission that occur in the practice of their profession.  Like other liability coverage acts that are fraudulent, dishonest or criminal are excluded from coverage.

Click here -> to get prices on E & O insurance.

There are very common, very costly mistakes that self-employed people make regarding their health insurance.  Failing to investigate different options, failing to get the right deductible, failing to investigate the insurance company and failing to research your options on a regular basis can be very costly .  Avoiding these mistakes can keep you from paying to much when you are looking for medical insurance For self employed.

One mistake is in assuming that health insurance policies designed for the self employed will always give them a better rate.  Those who have one, two or three employees will often do better by purchasing separate individual or family policies.  Often, but not always, the best rate will be found through a spouse’s employer.

If you are healthy, you will almost certainly get the best rate by purchasing and individually underwritten policy.  Unlike most group insurance policies, they will look at your health history before deciding whether or not to insure you.  Because they are allowed to say “no” to those who are less healthy, they are able to give better rates to those who are healthy.

Another option to investigate is getting coverage through your spouse or domestic partner’s insurance.  Often these policies are subsidized by the employer.

You may find that only your spouse’s part of the coverage is subsidized.  If this is the case, you should take out a calculator and determine whether or not it makes sense for the whole family to be on one policy or for your spouse to have a separate policy from the rest of the family.

Another too common mistake is to fail to consider high-deductible policies.  A high deductible policy will usually have a low monthly premium.  Again you will need to do a little arithmetic to see what deductible level makes the most sense for you. If your premium goes down two dollars for every dollar that is taken away in benefits, a high deductible policy might be a good deal.

Any insurance company you are considering should be in good standing with your state’s insurance department.  Be sure that there aren’t too many complaints about the company you are considering and that they are approved to sell in your state.

The financial stability of the company is also important.  You may want to check with A.M. Best or another rating agency to make sure that the company has a good rating.  You want your company to be there when you need them to pay your claim.

Health insurance has always been subject to rapid change.  This is true today more than ever.

Health insurance prices are subject to change on a very regular basis.  You don’t want to be caught with the policy that was the best bargain two years ago.  Make sure that you look at your options once a year or at worst once every two years.

You don’t have to pay too much for health insurance or get caught with poor coverage.  To avoid paying too much or getting poor coverage, be sure to look at all your options, investigate moderate and high deductible options and investigate your insurance company.  Finally remember to look at your options again no less frequently than every two years.

It is important to distinguish between a discount card that is not connected with insurance and a card from an insurance company that allows you to pay the insurance company’s negotiated rate.  Both may have their place, but it is important not to overpay for a discount card because you believe that it provides more coverage than it does.

If you have health insurance, you will probably pay the insurance company’s discounted rate for services and prescriptions when you present your card.  This rate is also known as the negotiated rate.  In this sense your ID card becomes a health insurance discount card.

However, your ID card (or the insurance behind it) provides you with more than a discount on medical services.  It probably limits the amount you would have to pay out of pocket in a catastrophic situation.

You may have a $5,000 out-of-pocket limit on your policy.  This can mean that even if you have a $75,000 hospital bill your costs are limited to $5,000.

(With some policies you will continue to pay your co-pays even if you have met your “out-of-pocket-limit”.  Also your deductible may be separate from your “out-of-pocket-limit.”  This can mean that you pay your deductible plus your “out-of-pocket-limit.”)

With a discount card you may get 10% or 25% off any covered services but there will not be a limit to what your costs can be.  This means that in a scenario where you have a $75,000 medical bill and get a 25% discount, you will still be responsible for $56,250 of the costs.

Unfortunately, some of us cannot afford or cannot medically qualify for health insurance.  A discount card that is not connected with a health insurance policy can reduce your bills if health insurance is not available to you, but it is important that you know that that there is a big difference between a discount card and health insurance.

Having a baby without insurance can be costly for three reasons. The cost of a normal pregnancy is very high. The cost of a pregnancy with complications is even higher. The cost of having an unhealthy baby who is uninsured can be even higher than that.

Maternity insurance may be available to you. This depends on your location and other criteria. If you are thinking about getting pregnant you should think seriously about your health insurance. Make sure that your health insurance covers pregnancy before you conceive.

If you are already pregnant, you may qualify for state-sponsored health insurance plans that will cover your maternity costs or part of them.

You will probably have much better options if you are not already pregnant. It is better to get coverage in place before you start trying to conceive.

Waiting until the last minute and having a baby with no insurance can cost you and your family more than the cost of a new car.