Group Health Insurance
Health care reform
Health Savings Accounts (HSAs)
Individual Health Insurance
Long Term Care Insurance
Medicare related coverage
03-23-2010by Colleen King
With all the furor over the Anthem Blue Cross rate increase on individual health plans, and rate increases in general, there’s a lot to keep track of for us independent agents. And up until now, I would have sworn it wasn’t possible.
When rate increases on health insurance were coming, used to be you would get a list of who was going to have an increase, when and how much. I would always use this to send letters to my clients to let them know hey, this is coming and when you find out how much it is, let me know if you want to look at other plans. Something has been happening in our industry that keeps me from being as on top of that as I used to be.
Now, instead of getting ‘The List’, many carriers have gone to ‘anniversary’ increases. So every twelve months from when you were first approved, that’s when applicable increases apply. Not in one fell swoop in February like Blue Shield used to do, or March like Anthem. NOW, they have places to go to look for these reports. Or its embedded in your client list. My point, I’m just not as on top of this as I would like to be. I want my clients to know I’m there for them in case they want to look at options.
I apologize to my Aetna clients, but Aetna has gone to this, and the system takes some manipulation to get reports so I’m a little behind. But when I did pull the reports, I was really surprised at what I found. In looking at my 20 clients listed for whatever time period this is, the increases ranged from a low of 0.20% to a high of 11.67%. The 11.67% was on a client over 65, so that really was a minimal increase–relatively speaking.
This was amazing to me, since you always expect something horrendous. Not that anyone wants an increase but these were relatively small. In fact, 10 of my folks were going up less than 1%. Aetna has done something different from the other carriers for a while, and that is basing rates on the older spouse when looking at a couple rather than the younger. Some others are just starting to do that now. When this first came about, the agent community didn’t like it, but between that and a couple other things they do, maybe this is a more realistic pricing model. After all, the 62 year old doesn’t get priced as the dependent on his 29 year old girlfriend.
I would estimate 98% of my clients are in Southern California, predominantly Los Angeles and Ventura counties. Health care costs, ergo insurance prices, tend to be higher in Northern California.
Maybe there’s hope for this industry–it is possible to have minimal rate increases, isn’t it?...read more
03-22-2010by Colleen King
Now that I’ve heard this from three different sources, I believe it. Because of all the flack from Anthem Blue Cross has received from the impending rate increase on individual health insurance policies. At the request of State Insurance Commissioner Steve Poizner Anthem will hold off this current round of increases until May 1. During this time period an outside actuarial firm will come in and review everything to make sure the increase overall complies with state law that requires that a minimum of 70 cents of each dollar is spend on medical care.
Well wait a minute–shouldn’t the commissioner have required this outside audit/review last November when Anthem filed the proposed rate increases with the state? Why wasn’t this a big deal then? You see, it’s not like this totally came out of nowhere. Rate increases are submitted by all carriers to the Department of Insurance, and they are ‘approved.’ Generally speaking. As it stands now, apparently the DOI can’t decline to approve rates. Oh that’s right, Poizner’s running for Governor. Maybe that was it.
It sounds like maybe this wasn’t reviewed line by line, or they looked at an aggregate compilation of the increases. So what can you do about your premiums as they go up?
Call your agent and see what else is available. Even if you have pre-exsting conditions and can’t change carriers, you often times can downgrade your policy. But be sure it makes sense to do so. If you have an ‘expensive’ condition, it might be worth staying on the more expensive plan to keep your medical costs manageable.
See if it’s less to put family members on other policies. Not everyone may as high a level of coverage. And couples wanting to have children? Many times I put the husband and wife on separate plans because plans that cover maternity are much more expensive, and they don’t both need maternity.
Consider a health savings account eligible (HSA) plan–often these are less expensive and if you’re open to paying for the occasionally office visit they work well. Plus there are tax benefits to having the HSA.
And there are other things to consider, but first and foremost, start with your agent. And if you don’t have one, I’m always around....read more
03-17-2010by Colleen King
Well, depends on how you feel about what you are hearing. If you have concerns about what is (or isn’t) being discussed around health care reform, read on.
Personally I’m not a huge on writing politicians but there are times you need to stand up and think you may be counted. This is easy to do–know who your congressional representative of senator is, go to their web site and they have an email form already for you to voice your opinion. Just be reasonable. I’ve been told that one letter or one email gives an equivalent weight of about 5000 constituents. That might be high, but what if it’s 50, or 100? That’s not bad!
So here’s what I sent this morning–please consider doing something similar if you are concerned about what is going to possibly happen this week.
Dear Congressman Sherman,
Regarding health care reform
I’m sure by now this has gotten to be VERY old, and you along with your colleagues want to pass something so the focus will move on.
This approach of ‘pass it now, we’ll fix it later’ really scares me, along with apparently a larger portion of the country. I’m an insurance agent. I along with most of my peers all want to see reform too because we deal with the problems of the current system day in and day out. Trying to get people coverage, affordable coverage, when medication for GERD gets a rate bumped up, or two medications for high blood pressure instead of one gets them rejected. Does not make for a happy work day.
But it has to be done carefully, and potentially, incrementally. Mandating carriers to issue without a mandate to purchase will be a disaster. Who is going to be the first in line? The sickest folks, of course. And I can’t blame them, but that’s what drives up the cost of coverage.
I’m not sure a government plan is the answer. Exchanges, well if they are state run, doesn’t that create another set of costs? By keeping the independent agent in the mix to some degree, I feel, will help keep costs down. Someone has to help people figure out what kind of coverage to buy. And for the most part, we are paid on commission only. No base salary, no benefit package, so if we don’t perform, we don’t get paid. As opposed to a government agency–I won’t belabor the point.
Thanks for your consideration, best of luck out there, and PLEASE VOTE AGAINST THIS DEBACLE....read more
03-10-2010by Colleen King
When people understand them, many like the idea of health savings accounts. They aren’t for everyone, but no one type of health care coverage is. Otherwise, we’d all have the same plan, and health care reform would have hit by now.
What does a health savings account (HSA) have to do with tax time? Well, if you’ve maxed out all the places you can stash pre-tax money, this is one more place to consider, IF you opened the account before the end of 2009. You have up until April 15th, like you do with IRAs, to make contributions and designate them for 2009.
My tax guy is not a huge fan of HSAs. We have this discussion every year; he’d rather see me put more into retirement over an HSA. But the way I contribute to my HSA makes sense to me. You can look at the maximum amount for the year and drop that in. In 2009 it was $3000 if you had an individual HSA eligible health plan. Or, you could do a monthly automatic bank transfer so the account grows slowly over time. The way I do it, I anticipate what expenses are coming up and deposit accordingly. When I know my annual optometry visit is coming up, I put money in for that. HSA money can also be used for long term care insurance premiums, so I’ll be putting money in for that soon–they’re due AGAIN!
Since most people, especially entrepreneurs and self employed people have higher deductible health plans to save on the premium, to me is makes sense to have a plan that can be used with an HSA because the money you put into an HSA is deductible on your federal tax return. And, at the end of the year it’s not ‘use it or lose it.’ It rolls over, stays with you, until you do need it.
You can use the money for all sort of things, click here for a list of allowable expenses. There are many other details on the ins and outs of HSAs, but I’ll save those for another time. Main thing today, if you have one, and you need a place to stash some money to cut your tax obligation, consult your tax professional and see if this might be one thing to consider.
Lots of banks and credit unions in California offer HSAs. Check out this web site, www.hsainsider.com as a ‘clearing house’ of sorts to see what’s available.
Be well!...read more
02-27-2010by Colleen King
Why is an ‘insurance person’ writing about a tax issue? When it comes to annuities, it may end up connected if the President has his way. Unfortunately.
An article in Investment News by Dan Jamieson on February 22 indicates that President Obama wants to have the 2.9% Medicare tax apply now to unearned income. This will hit more than just annuities, this will also affect other forms of unearned income you may be more familiar with–dividends, rents, royalties and interest on individuals earning more than $200,000 and couples earning more than $250,000.
Is nothing sacred? Annuities, particularly fixed or indexed annuities, are a good way for people to go when looking for a conservative option to put money away. I’m assuming that if you are using an annuity for an IRA of some sort this wouldn’t apply. One reason many financial planners don’t use annuities for IRAs is the presumption that the fees and restrictions associated with annuities aren’t worth it. (There are many with no fees, by the way.) But there are fees generally with most options, aren’t there? Trading fees, etc?
Money in an annuity currently grows tax deferred, whether it’s set up as an IRA or not. This money needs to sit and grow particularly for folks planning on using this for retirement living. If they are a high wage earner now, this can eat into the growth of a non IRA annuity.
Share this with a friend, not just the annuity part, because people need to know what else is going to be affected by this proposal. Seems like someone needs to look at ways to cut spending, but maybe there’s just something I’m missing....read more