Ask Colleen King

Health insurance remains one of those things that most people still find confusing. For group health insurance, disclosing your health history helps determine the rates your employer gets. For individual health insurance, it determines not only rates, but whether or not you will even be accepted!

Focusing on individual health insurance, all carriers ask about whether you’ve taken medication, been treated for or had symptoms of anything in the past  ten years. One carrier, it used to be the past twenty years. There’s a rumor that one is going to drop it to the past five years. Whatever the number, talk to your insurance agent about anything you’ve been treated for, because carriers look at things differently than you and I do. I recently did a policy with a nice guy who was on no medication, not under the care of a doctor or anything. When I saw his online application though, he had stopped taking an antidepressant 3 months ago.  He did end up getting approved but at an above standard rate because of this. Why does it matter? He isn’t on anything! This is one of those cases where depending on the carrier, an applicant needed to be off medications between 6-12 months in order to qualify for a standard rate. Recently stopping some medications, they are concerned that you haven’t been off of it long enough and may need to go back on it. Basically, don’t let common sense and logic get in the way of reality.

Another dicey situation is when women have had breast implants. Now, consider this. When you first start working with a health insurance agent, it’s not unusual for them to be someone you found on the internet, pretty much a total stranger. They are going to be asking all sorts of personal questions, and you don’t know them from adam. Women often think they don’t need to disclose their implants, after all, it was cosmetic and insurance didn’t cover them before, so what does it matter? Well, it does. Some carriers, silicone implants are an automatic decline. Others, depending on how long ago they were inserted, will accept you but at an above standard rate because of the high likelihood of someone developing contractures, encapsulation that hardens and causes pain necessitating removal. And the carrier may be on the hook for it. I finally figured out a less direct, more tactful way of asking the question so I run into that ’surprise’ less often.

I could go on, but I think you get the idea. Even if you think an old health issue is irrelevant, talk to your insurance agent about it when considering making a change. If you don’t disclose and there’s an issue down the line, your policy could be rescinded and new coverage tough to obtain. And if you aren’t comfortable with the agent you are talking to, talk so another one or two. There are tons of us out there, we all want your business but you’re the consumer, so find someone you like dealing with!

Be well!

Tags:   Group Health Insurance · Health insurance · Individual Health Insurance1 Comment

Here is another term in Health Insurance, both Group Health Insurance and Individual Health Insurance that people don’t always understand. I would have posted this sooner, but it’s been a busy month!

(”Help, I don’t understand!”)

Coinsurance might be easier read with a hyphen; co-insurance. This is one of the three main questions people should ask (in my opinion) in looking at a health insurance plan. You have the deductible, the out of pocket maximum and then that step in the middle, co-insurance. ‘What’s my co-pay’ is a good one too, but not as important as the ‘big figure’ numbers.

Generally the deductible is what you pay before the coverage kicks in. If you have something big hit, the out of pocket maximum, or co-insurance maximum is the part that keeps you from going broke. Once you hit your out of pocket maximum, that is generally all you pay on eligible health care expenses for the remainder of the calendar except for office visit co-pays and prescription drug co-pays, depending on your plan. The key word here being, eligible.

How do you reach your out of pocket maximum? That’s where co-insurance comes in. Once you hit your deductible, then the carrier starts to pay. Co-insurance is what percentage of eligible charges they pay and what percentage you pay. 80/20 used to be pretty common, with the carrier paying the 80% part. Now we are seeing all kinds of splits. There are a few (very few) 90/10 plans, but they are really expensive. In the individual market we mainly have 70/30 plans in California, but now there are 60/40 and even 50/50 plans.

Some people balk at a 60/40 or 50/50 plan–what’s the point in having insurance, they ask. That brings me back to the out of pocket maximum. You may be paying 30, 40 or 50% of the bill, but once you hit the out of pocket maximum the carrier pretty much comes into play at 100%. It’s a matter of how soon do you want the carrier to come into play.

All plans are not created equal. The more you want from a plan, the more it will cost. If you want more coverage sooner, it will cost you more. In reality, you’ll either pay in advance (premium) or you’ll pay at the time you need help (medical bills). So if you can handle more of the expense of health care, buy a plan with a lower premium, especially if you’re basically healthy. There’s no rebate for low utilization if you have a ‘healthy’ year as opposed to a ’sick’ year.

Be well!

Tags:   Coinsurance · Group Health Insurance · Health insurance · Individual Health Insurance3 Comments

It’s getting to be that time of year when the four years of college (or five, or six) is about to wind up. At last. That tuition bill is going to be gone and the kid(s) will be out of the house. Then it occurs to mom and dad (not usually to the new grad) that their young adult can’t stay on their insurance policy any longer.

Carriers allow full time college students to stay on their parents’ coverage until age 23, 24, or even 25. As the hassle with pre-existing conditions continues to increase, some carriers are talking about increasing the age a kid can stay on their parents’ policy, even if they aren’t in college. But we aren’t quite there yet.

This little detail can easily escape everyone since finals and planning for graduation are a lot more interesting. I had this situation come up last year with a family, and there are a couple ways to do it. It was a Friday, college graduation was Saturday, the new grad was turning 24 on Sunday so as of Sunday, she was going to be uninsured and Mom was panicking.

We could have done a regular policy, but since that usually takes 2-4 weeks, the young woman wouldn’t have been covered. Instead, we elected to do a short term health plan. These will vary from state to state, so what I’m relating here pertains specifically to California.  These plans I refer to as ‘accident and illness’ policies. They don’t cover anything routine, they don’t cover pre-existing conditions or maternity, but if you get sick or have an injury you have coverage. And, because it doesn’t cover anything pre-existing the underwriting, or review of the application, is much quicker. We can usually get a response in a couple of days.

So the short term health plan was how we handled it. These can be kept on a month to month basis, up to a maximum of 6 months, and if you’ve not had any claims, you can renew it for up to another six months. These plans are also really useful in situations where you get a new job, you don’t have benefits for the first 90 days of employment and you don’t want to pay the exorbitant cost of COBRA. I’ve used these many times and while they aren’t ideal due to the fact that they are short term, they sure can be a great stop gap. And the carrier I use most, if you go to an emergency room for an injury, the deductible is waived. I wish all policies would do that!

So congratulations, and good luck to the class of 2009!

Be well!

Tags:   Group Health Insurance · Health insurance · Individual Health Insurance · Short Term Health PlansNo Comments.

A couple of months ago I did an article on COBRA coverage: how it works, and why you should or shouldn’t take it.

Now that there’s a subsidy of 65% for people involuntarily terminated after September 1, 2008, the picture changes somewhat. Depending on how much the 35% you have to pay is, that 65% can be pretty tough to turn down. But I still have a couple of caveats for you.

This only lasts 9 months. With any luck, during that time you will have another job, with benefits, and you don’t have to think about this any further. Normally when someone is offered COBRA I suggest they look at an individual plan if they are potentially insurable because anyone can have something develop or happen to them that could render them uninsurable.

I still think you have to give that serious consideration but I know that subsidy is REALLY tempting. Here is what I think you should consider. If buying the coverage is on your own is less than the 35% you’d need to pay, then look at individual plans. Whenever someone elects to take COBRA for a family, but not everyone needs to be on COBRA, meaning they are insurable, look at individual plans. Especially if you don’t qualify for the subsidy. You need to look at all options for your situation, which is why an independent agent in addition to your HR person at work is important.

If the cost issue with the subsidy is close, maybe the plan on your own is slightly more than your COBRA cost, consider getting your own coverage, again, just in case. It’s all a matter of what’s going to make things easiest for you to handle.

Be well!

Tags:   CalCOBRA · COBRA · Health insurance · Individual Health Insurance2 Comments

It’s so nice to have people that keep you on your toes. Health Insurance questions abound when you ask for topics for this blog. Thanks to Lisa Nicole Bell again, www.adivinebook.com for this one.

The plus for you, the consumer, whether it’s for individual health insurance of group health insurance is that the rates are the rates. No one has special ‘deals’ to get you something better, it’s a matter of service. When you go directly to an insurance company, a carrier, they can only give you information on what they offer. And that’s fine, but if you want information on multiple carriers, you have to call each one. That also means you have multiple people following up with you trying to gain your business. If you have the time to do that, great. Some people would rather do it that way, so there’s no right or wrong.

But by going to an independent agent, which is what I am, you can talk to one person, for FREE, and get all the information on several carriers from an unbiased source, theoretically. Some agents are more partial to certain carriers, so you may even want to talk to a couple different agents to see who you are most comfortable with. But basically you can have one contact for multiple companies.

Agents are paid on a commission basis by the insurance carrier they place the business with. You can talk to one of us for hours, never do anything, and there is no charge to you. One of my group cases, I spoke with the contact for 2 1/2 years before they did anything. The situation was such that they didn’t need to start a group plan right away. But when they finally did, it absolutely was worth the wait. One of the two partners in this group has referred 3 family members to me because she liked working with me.

An even more important reason to have an independent agent is if there is an issue after the sale. Agents working for a carrier will certainly do all they can to help you if there’s an issue, usually. But, if an outside agent is pressing an issue, carrier reps (the people inside the company that an independent agent can call for problems) know you can move that business by next month if the client is really unhappy.

So again, there’s no exact answer because everyone will have different opinions. But if you have a good independent agent, you may end up doing less of the leg work yourself which many people prefer in this busy day and age.

Be Well!

Tags:   Group Health Insurance · Health insurance · Individual Health Insurance3 Comments

Once of the best things about getting my insurance license was learning the difference between the two basic types of insurance, which had eluded me for years. Basically there are two types of life insurance and they break down to temporary and permanent.

Love this, this should be our ‘real’ security

An easy way to remember the difference, is ‘term is temporary’—Term life insurance is something you buy for a specific period of time, 10, 20, 30 years for example, and for a specific amount. At the end of that time period, if you are still around, that’s it; it’s gone. One ‘add on’ option is to buy what’s called a return of premium rider, so that and the end of the term, if you are still alive, all the premium you have paid is returned. Term is generally what you buy when you are younger, because financial demands are greater when raising your family, and term life insurance is more affordable.

“Permanent” types of life insurance basically are whole or universal life. Once you buy these policies, they are in force until you pass away or cancel them. People tend these days to lean more toward universal life versus whole life because the premiums are flexible; you aren’t always locked into a specific amount per month. The downside with permanent types of insurance is that these policies are more expensive, because they have to be in place for an unknown length of time. These policies also build a ‘cash value’ which can be used in a number of ways, including supplementing retirement income.

Most term policies are able to be converted to a permanent policy without proof of insurability, which helps out later in life. You can make it for a lower face value, so you can still take care of your loved ones needs without having to qualify for on a health basis. The main reason to have life insurance is to buy your surviving spouse time to grieve and deal with life without facing losing the home. It gives them time to figure out what they are going to do, and not having to make huge financial decisions at a time when they can’t think straight. And that’s what matters.

Be well!

Tags:   Life Insurance2 Comments

A few weeks ago a delightful young woman asked me about health insurance, and what was good for a young professional or new grad, or people in general under 35. This answer is for you, Lisa Nicole Bell (http://wwwadivinebook.com). You really need to check her site out, she has a lot to offer in these crazy times.

Anyway, The answer to Lisa’s question could take a lot of space, but here goes. If you’re lucky enough to land a job out of school, or a job anytime that offers health insurance, you absolutely should sign up for them. Many times you only have one plan to choose from so that makes it easy. Other times you may have a choice between an HMO plan and a PPO plan. HMOs are good because even though they generally have smaller doctor networks, your financial outlay if you need care tends to be a lot less. AND, in group plans the HMOs usually cost less than PPOs so your contribution to the premium might be lower . With PPOs though, you have more doctors to chose from.

If you have to fend for yourself and get an individual health plan, which happens more and more these days, things change somewhat. In the last couple of years there have been a lot of individual plans that are really cost effective, but the reason they are is that they don’t cover maternity. This concerns me because even when young women aren’t planning on a baby anytime soon, things happen. Then, you can’t change plans to get maternity coverage because if you are pregnant, it’s an automatic decline when you apply. So I urge women in their 20s and 30s to have something with maternity just in case. But ultimately it’s their decision. There is one insurance carrier in California that will allow you to switch to their $5000 deductible plan that covers maternity, but wow.

I suggest when you are looking for an insurance plan that doesn’t cost a fortune that you consider one that does one or more of the following:

• Offers a limited number of office visits per year for a fixed co-pay. You can still see a doctor, but the deductible then comes in to play. Since most younger people don’t see a doctor more than 1-2 times a year, this usually works.
• Consider a plan that offers only generic prescription drug coverage. My preference is for everyone to have full coverage, just because I’m cautious, but many times you would be fine with just generic.
• Consider a qualified high deductible health plan that you can use with a health savings account (HSA). These are definitely less expensive, and some offer maternity coverage. The thing you have to understand about these types of plans is that the only benefits you have prior to meeting the deductible are preventive. You pay for everything until you meet the deductible. BUT, when you have an eligible plan you can open an HSA, put money into that to save for future health care costs and the money deposited in the account is deductible on your federal tax return. And in some states too.

People often ask about ‘catastrophic’ plans. There isn’t really a clear definition on that, but these are generally considered to be the PPO plans with $5000 deductible or higher, maybe they have office visit coverage, maybe they have prescription drug coverage. There is also a set of plans that  are hospitalization only, and those really scare me because that’s exactly what they are–hospitalization ONLY. No prescriptions, no office visits and usually no coverage for outpatient care which can be costly.

So to answer the question, what kind of coverage should people in their 20s and 30s get? Call an independent agent and discuss your situation. It’s a matter of what will fit in your budget, how extensive you want the coverage to be and your overall health situation. Calling an independent agent is really helpful because they can help you compare companies instead of you calling all of them. AND, their services are free to you. You will get the same rates whether you go to an outside agent or directly to the carrier. Just do something; medical costs aren’t dropping any time soon!

Be well!

Tags:   Health insurance · Health Savings Accounts · HSAs · Individual Health Insurance2 Comments

Health Savings Accounts (HSAs) are a great way to pay for your health care when you have a qualified high deductible health plan. One big benefit is that any money you deposit into your HSA is deductible on your federal tax return. It’s also deductible on some states’ returns (but not in California, just yet.) HSA eligible plans can be found in individual health and group health insurance offerings.

If you have an HSA, but you didn’t bother to put much in it last year, you can still drop some money in before filing your taxes! If your tax guy calls you like my guy David does, and says ‘hey, can you find a couple more bucks to stash somewhere soon?’ then you have another place to legitimately obtain a deduction.

The catch is that you have to have opened the HSA in 2008, you can’t open it now and try to take the deduction for 2008. If you opened an HSA in 2008 but didn’t fully fund it, and you don’t have some other tax deductible place to put it (or you maxed them all out) remember that the upper limit for 2008 for an individual plan is $2900 and for a family, $5800. DON’T exceed the limits. HSA contributions and disbursements are reported to the Feds.

So if you didn’t open it last year, are bummed that you are missing out on this easy, above the line deduction and you are eligible, open it now. Get a head start on your 2009 deductions. Depending on where you open it, you don’t have to deposit a fortune. I don’t claim to be a tax expert, just an expert tax payer as one now defunct radio talk show host used to say. So consult your tax adviser to see if this is a good way for you to handle this situation.

And, best of all, at the end of the year it’s not ‘use it or lose it’–it rolls over.

Be well!

Tags:   Health insurance · Health Savings Accounts · HSAsNo Comments.

There aren’t too many things more complicated that the collection of Medicare Advantage plans available to our Medicare population. There used to be Medicare HMOs and Medicare Supplements. Well Medicare Supplements are still around and serve a great purpose; they work similarly to a PPO health insurance plan because you can go to any doctor. You also pay a monthly premium for these.

Medicare Advantage plans include Medicare HMOs, Regional PPOs and Private Fee for Service plans (PFFS). Yikes! Remember last year when you were deluged with Medicare commercials, after surviving the political commercials? “Sign up now before open enrollment ends!” Well, for existing Medicare Advantage plan members, January 1 through March 31is your LAST last chance to make a change to a comparable Medicare Advantage plan for 2009. And the great thing about these is they have little or no premium cost to join. None of this date and change related information applies to Medicare Supplement members.

So if your friends or parents or some other relative hasn’t been happy with their Med Advantage plan, now’s the time to change or forever hold your peace. Until NEXT November 15 through December 31. Then it starts again! Tell them to contact the insurance company they want to change to or contact their friendly local insurance agent for help and recommendations.

Be well!

Tags:   Medicare Advantage plans · Medicare HMOs · Medicare supplementsNo Comments.

COBRA–good news or bad news? These days people are either losing their jobs, their health insurance or both. What do you do? I know people aren’t always thrilled with their group health insurance plans but it’s scarier to think of being uninsured if you’ve ever heard the costs one can incur. But then you find out how much your COBRA coverage will be and wow–you need it at least long enough to get out of the CCU from your heart attack.

When COBRA, the option to be able to continue your health coverage when leaving a job first started years ago, people generally thought it was great. This applies to companies with more than 20 employees. But the cost of many group plans is extremely high; most didn’t realize how much their employer was paying to cover them. With COBRA, you pay the entire amount of the premium plus 2-4% administrative costs. In California, we have CalCOBRA which functions similarly but with administrative costs of about 10%.

So now, what’s the big deal?  Why is COBRA so great? Well if you are insurable on an individual plan you don’t need to stick with the COBRA offering. But if you aren’t insurable, all of a sudden it’s usually the best deal in town.  You need to decide within 63 days of when your coverage ended whether or not to take it. What I’ve done with several families is help them select individual health insurance plans for the members of the family that are insurable and leave the ones that aren’t on the COBRA plan. And it doesn’t always have to be the former employee that stays on the plan, you need to find that out from your former employer.

So check out your options. You might be surprised at the possibilities. Contact an independent agent, like me, before you throw in the towel.

Be well!

Tags:   CalCOBRA · COBRA · Group Health Insurance · Health insurance · Individual Health InsuranceNo Comments.