Quick Insurance Tips

Private medical insurance prices are influenced by several factors.  You may be able to lower your cost for health care by eliminating unneeded coverage, by increasing your fitness level or by shopping around for coverage.

Medical insurance is expensive today because the cost of a hospital stay and the cost of a doctor’s visit are expensive.  The cost of health care rises each year as healthcare providers ask for more, more expensive procedures become available and hospitals charge more for their rooms.  By reducing your insurance company’s costs you may be able to reduce your cost as well.

You may be able to reduce coverage for certain benefits that you don’t need or that are more expensive than they are worth.  Maternity insurance, prescription coverage and dental insurance may be either unnecessary or over priced.  People often pay extra for a policy that includes maternity insurance long after they have had their last child.  Prescription coverage and dental coverage will often have relatively low annual limits.  If so, the amount you would have at risk if you eliminated one of these benefits is the amount of the coverage limit less the cost of the coverage.  This may mean that dropping the added cost is a good idea.  Spend some time looking at the limits and the costs of these benefits and do the math to make sure that they are worth keeping.

Raising your deductible may also reduce your costs. By taking more or the risk, you can often reduce your costs by a lot. In some cases the amount of extra risk you take may be less than the amount of money that you save. Make sure than when you compare your premium savings to an increase in your deductible you multiply the premium savings by the appropriate factor to get the annual savings. Your deductible is probably based on a calendar year. You should compare it with the annualized savings to make an apples to apples comparison.

If you have been charged extra because of a medical condition or because of your weight, you may be able to reduce or eliminate the surcharge.  You should find out what needs to happen in order to get your rate reduced if this is the case.

Often an insurance company will reduce or eliminate the surcharge if you have had a period of time where you haven’t needed treatment.  If your preexisting medical condition has gotten better, you may be able to get your rate reduced.  You may need to lose a small amount of weight or reduce your blood pressure readings by a small amount.  Knowing what requisite numbers may motivate you to do the things you need such as exercise or eat better.  You may be able to save more than just money by doing what it takes to get your health insurance premiums down.

Shopping around is a tried and true practice for saving money on health insurance, cars and many other things.  There is often a large variance in medical insurance prices.  You may find that you can save hundreds of dollars a month by switching to another company or even to a different type of policy that is offered by the same health insurance carrier.

There may be several factors that you have control over that will impact your cost for health insurance and health care in general.  Reducing your coverage in unimportant or unneeded areas, reducing surcharges for pre-existing conditions and shopping around can all help you bring your costs for health insurance down.

Today most health insurance companies use provider networks for their policies.  You should know the advantages and disadvantages of plans that use provider networks.

Advantages of Health Insurance Provider Networks

The advantages of a policy with a network of doctors, hospitals and other providers are the lower cost for medical care and the lower premiums for the policy.

When you use a doctor or other provider that participates in your health insurance carrier’s provider network the provider charges less than they would if you didn’t have insurance.  The lower rate is called the “negotiated rate.” The insurance company or you will pay a rate that the carrier has negotiated with the provider.  This rate can be half of the standard price for a given service.

This means that your costs are lowered in two different ways.  First, the insurance premiums you pay for your policy will be lower than they would be for a similar policy that does not use a network.  Second, if you have to pay for the service out of your pocket because you haven’t met your deductible, you will pay the lower negotiated rate.

Disadvantage of Health Insurance Provider Networks

The disadvantage is that you will pay more for care if you choose to seek treatment from an out–of-network provider.  In some cases, you will have to pay the entire cost of care received from a doctor, hospital or other provider.  In other cases you will pay a higher percentage.

Emergency care is often an exception to this.  Your share of the bill may the same as it would be if you used a network provider if you use a non participating doctor or hospital during a medical emergency.

It is important to know how your policy covers you when you are out-of-network.  HMO plans will typically cover nothing but emergency care if you are out of network.  PPO and POS plans will typically cover some costs when you use a non-participating provider.  However, you will often have a higher deductible and/or a higher coinsurance percentage.

Special Health Insurance Network Issues

It is important to be able to have access to in-network care at all times if possible.  If you are a college student, ideally you want an insurance policy with a strong network near your parents’ home as well as near your school.  “Snow birds” and other people who have secondary residences that they spend substantial amounts of time in will have similar concerns.

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.

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.