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Ask Colleen King | Blogs


Two things to watch out for when buying health insurance or life insurance

02-09-2010by Colleen King

We agents really aren’t all bad, money grubbing fiends but unfortunately the insurance industry has had their share over the years. You want your agent to watch out for you best interest, not theirs–i.e. commissions. I kid my clients at times when suggesting a less expensive health insurance policy than one they are looking at. I’ll tell them ‘you can buy that, and my mortgage company and I would appreciate it, but do you really need to spend that much?’ So what two things do you need to watch out for?

Twisting– This is a term you hear more in life insurance but it can apply to health insurance as well. This is where an agent gets you to drop a policy, or replace a policy, that doesn’t really need to be changed but it will generate a sale for them. The times to change a policy would be:

* rates have gone up

* your needs have changed–maybe you need less coverage, maybe you need more

* a health condition you once had has changed or gone away and you had previously received an above standard rate. Sometimes you don’t need to change carriers, but sometimes it ends up being easier.

The other thing you want to avoid at all costs is the Rescission of a policy. Insurance companies are within their rights to rescind coverage if you have lied or misrepresented facts on an application. What will happen usually is they will refund any premium paid minus any expenses they paid out. So if you bought health insurance, ‘fibbed,’ had an expensive bout of care thinking you’d just drop the coverage later, think again. Not only will you be on the hook for the costs but you also risk criminal prosecution for insurance fraud.

These days insurance carriers are running a bit scared due to all the health care reform changes coming up. And I had a rescission happen to me. Dealt with the party entirely over the phone (which is not unusual with health insurance) and thought all was well and good. A few months later the carrier called me about this person, asked me some questions, saying there was something ‘pre-existing’ with this person that wasn’t on the application.The policy ended up being rescinded, and I have no idea about the associated costs, but turns out my client had gone through inpatient rehab, which certainly isn’t cheap!

The irony was I was told I couldn’t have any information on what the situation was that flagged this due to privacy protection. But I was copied on the rescission letter, and it cited the reason for rescission was this person’s ‘recent care’ at a drug rehab facility that was named in this letter–so much for confidentiality!

So in short, if you don’t think you need any changes, don’t be pressured into it. And if you do fill out an application, play it straight; it’s not worth the angst of losing coverage you need. And a second opinion from another agent should be considered if you are concerned about what you are being told.

Have a great weekend! more

Category: Uncategorized

Health care reform and the contribution of Rep. Joe Wilson

09-26-2009by Colleen King

It’s been a couple of weeks now since the great ‘shout heard around the world’ by Rep. Joe Wilson’s (R-SC),constituting a serious breech of etiquette for Congress, but what it brought to light appears to have drastically changed what will happen with a specific portion of the proposals in health care reform.

What set Rep. Wilson off was President Obama’s statement that illegal aliens would not be covered by the new version of health care. Well, that is what it says in the House bill. What no one wants to cop to is that there was no enforcement mechanism, no provision for checking someone’s residence status when applying for public or subsidized health care. And it’s not like something would have to be created, there is already a database that can be checked and is used by 70 government programs currently. Why not this one?

The SAVE database, the Systematic Alien Verification for Entitlements program, Is used to check eligibility for government programs. Similar to when your doctor calls your insurance company to verify your eligibility for benefits. Except for the prospect of being deported if you aren’t found to be eligible. If you are in Los Angeles, you’ve heard a lot about this on the KFI 640 AM radio show with hosts John and Ken.

Many have said that this was omitted due to pressure to do something about immigration reform. I’ll leave that to another Examiner to comment on. It is estimated by the Congressional Budget Office (CBO) that to cover the 6 1/2 million illegal immigrants will cost $31 billion. So eliminating that will be a drop in the $900 billion estimated bucket that the reform plan will cost over the next 10 years. But since everything so far is an estimate, I’ll take the $31 billion, thank you.

But coming from a nursing background, once upon a time, the problem with NOT covering people here illegally is that their kids are in school with our kids. If they aren’t receiving care, such as immunizations, there is a public health risk potentially.

So what do we do? Suggestions? more

Health Savings Accounts–the 2010 figures are in!

09-14-2009by Colleen King

Health Savings Accounts (HSAs) remain a popular adjunct to qualified high deductible health plans in finding ways to save on health insurance premiums. There are individual health plans and group health plans that you can get that will allow you to open an HSA. For a list of what you can and can’t use the money for, click here.

Every year the IRS sets the figures for maximum contributions, minimum deductibles and few other things that govern health savings accounts. Here are the numbers for 2010:

Maximum individual contribution to an HSA–$3050

Maximum family contribution to an HSA–$6150

Policy out of pocket maximum for individuals–$5950

Policy out of pocket maximum for families–$11,900

Minimum deductibles on plans for individuals–$1100

Minimum deductibles on plans for families–$2400

Catch up contribution for those over 55–$1000

That last one is potentially really important–for people over 55, if you have some extra cash floating around, you can put an additional $1000 in your HSA, above the annual maximum. This is another potential advantage to a couple both opening up an HSA. For 2009, you could both deposit the $3000 maximum AND an additional $1000. If you only have one account, it is an individual account so you could put the 2009 family max of $5950 plus $1000 for a total of $6950 for the year. If you each have separate HSAs, based on the 2009 figures, you could each put in $3000 to your accounts, plus another $1000 each, for a total of $8000.

But that only works if you are drowning in cash. I don’t consider an HSA to be the first place to stash extra money, most of us would rather put it in a retirement account. But if you’ve maxed out all your ‘pre-tax’ options, here’s one more place. And, it’s deductible on your federal tax return.  Be well! more

September is Life Insurance Awareness Month–really!

09-02-2009by Colleen King

Hey I couldn’t make this up. I’m assuming it’s the insurance industry that came up with this, not Hallmark or American Greeting since I haven’t seen any ‘Happy Life Insurance Awareness Month’ cards at the local retailers as yet in the card racks.

But as odd as it sounds, ‘Life Insurance Awareness Month,’ it is important for people to review what they have in the way of life insurance. Needs change over time, since there are times in your life when you need more coverage, and points where you can consider decreasing your coverage if you want to.

Agents are often taught that they should do annual reviews on what their clients have, but most of the time I think if you meet/talk with your agent every 2-3 years, that will work. You will need to contact them sooner if you have some life changes. Things like getting married, buying a home, having a baby, these are all times that increase your expenses so you don’t want to risk what you have by not have sufficient coverage in case the unthinkable happens. You need to consider the income of both spouses, multiply that anywhere from five to fifteen times depending on your liabilities and that will give you an idea of the amount of coverage you should consider. And if one spouse isn’t working, is the ‘stay at home’ partner, don’t assume you don’t need life insurance on them. If something happens to them, especially if you have kids, you may need to start paying for child care, need housekeeping help, and you aren’t necessarily going to be able to work as much. You may want to take time off for after school events.  You may need to change jobs if you do something that makes you travel often. Just stave off a financial mess by insuring the non-working spouse, whatever your situation.

As you get older, those are times you may be able to either decrease your coverage, or elect to convert your term policy to a permanent policy, either a whole or universal life policy. If your kids are grown AND have left the nest (being grown doesn’t necessarily mean they’ve moved out on their own these days) you may be able to get by with less coverage. If your home is paid off or the mortgage balance is very low, something that current savings could pay off, you may be able to decrease your coverage.

But before you cancel or decrease coverage, evaluate the overall worth of your estate. One reason to maybe buy MORE at this point in life is to facilitate a transfer of wealth. Life insurance proceeds are tax free to the beneficiaries; some people spend a couple hundred thousand dollars to buy a million dollar policy, thereby increasing what they leave to their heirs. Also having life insurance paid to your beneficiaries can help them pay off the inheritance taxes a large estate can incur.

So for a little extra help in figuring out what you need, check out this life insurance calculator in addition to talking with an agent or financial advisor.

So, Happy Life Insurance Awareness Month–Be well! more

Health Savings Accounts and their impact on the cost of care–is there one?

08-26-2009by Colleen King

Health insurance is on everyone’s mind these days–either you don’t have it, can’t get it and want it, you’re upset about what you are paying for it, or you turned on the daily news and there it is, the topic is right in your face again.

A Health Savings Account (HSA) is an account that you are eligible to open if you have a specific type of health plan, also known as a qualified high deductible health plan. Generally the only benefits you have prior to meeting the deductible are preventive, but check the benefits before you buy–some plans now are not offering preventive coverage prior to meeting the deductible. I think they should, but they didn’t ask me.  These types of plans are available in both the individual health insurance market and the group health insurance market.

Anyway, I’ve included in this article an excerpt from a study that United Healthcare relating to ‘transparency’ of health care costs when people have what’s referred to as consumer driven health plans.  What it boils down to is if you you see how much things cost, you are more prone to looking at less expensive alternatives, just like any other area you might spend  money:

“Study Reveals HSA Plan Effects on Cost and Utilization

The latest UnitedHealthcare study is among the first to examine the impact of plans eligible for health savings accounts (HSAs) on health care costs and utilization among both large and small employers. Some highlights of the study:

The positive impact of HSA plans continued through the second year of enrollment.

This is meaningful because some first year differences in cost and use may have been attributable to a redistribution of elective care services as employees rushed to get care in the baseline year before an anticipated change in their benefits. This dynamic typically levels out in year two, providing a better view of consumer decision-making.

Employers who implemented HSAs showed greater declines in hospital admissions and emergency room visits. At the same time, the number of prescriptions increased over time in the HSA. However, pharmacy costs decreased in the HSA population. This suggests that HSA members are making more prudent health care choices, such as using lower-cost drugs.

Full replacement strategies appear to deepen the impact of HSA plans. When comparing cost and use across employers’ full populations (including traditional plan enrollees when the HSA was offered as an option), employers adopting a full replacement HSA had better cost results for both medical and pharmacy than employers offering an HSA option.

The utilization analysis suggests that large full replacement employers realize lower costs due to a decrease in emergency room visits and lab usage. This highlights the possibility that full replacement members are making more appropriate use of emergency room and lab services.

The study results are consistent with other cross-sectional studies done by UnitedHealthcare on CDH plans. HSAs, especially those with a full replacement strategy, have great potential to slow the growth in health care costs compared to more traditional plans, even after adjusting for the better health found among those with an HSA. The study also confirms that we see a favorable impact for smaller companies.

Consumerism in Health: Insights from Experience

The positive impact of CDH plans has been widely documented, largely based on the experience of health reimbursement account (HRA) and HSA programs. Over the last nine years, UnitedHealthcare has compiled a body of work that measures if and how CDH strategies deliver on their promise – to provide lower costs through better consumer decisions – when compared to more traditional plans. Similarly, UnitedHealthcare has investigated market concerns that threaten to slow the adoption of CDH plans.”

So doesn’t it make sense? How can you save money on your health care, if appropriate, if you think a $5 co-pay is all it costs to see a doctor?  Be well! more