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With Health Insurance, what kind of coverage is good for recent grads and young professionals under 35?

03-31-2009by Colleen King

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!

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Health Savings Accounts–as tax time comes, here’s one more avenue

03-22-2009by Colleen King

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!

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Medicare Advantage Plans–your opportunity to change for this year is almost up!

03-14-2009by Colleen King

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!

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COBRA and Health Insurance–Do you have to pay through the nose, or is there a way to save?

03-06-2009by Colleen King

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!

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Your Health Insurance and a couple of ways to use it to help you save money

02-27-2009by Colleen King

Health Insurance–group health insurance or Individual health, it’s the bane of most peoples’ existence. One way you can save money is on how you use your prescription drug benefit.




Most of you will already know that many brand name drugs have generic equivalents. Whenever you can get a generic, with or without insurance, generics are usually significantly less. For example, I was looking on the Costco web site (great source for lower cost prescriptions) at a drug one of my clients is taking, finasteride. A 30 day supply is $33, the brand equivalent is $94. And these days most individual health and group health plans have brand drug deductibles which are a pain. But the design is to nudge you to the generics and help keep their costs down.


Prescription drug costs are one of the main drivers of health care costs escalating. The insurance companies can get discounts but it won’t drive the brand price down to the generic price, so it costs them more too. And guess who ends up paying? There is debate on whether they are as effective; the vast majority of the time they are, so why not give it a try.




Another way to save on drug costs is not to request the ‘latest and greatest’ that you just saw on TV. I recently had a sinus infection, saw an urgent care doctor and wanted the same major league antibiotic I had a couple of years ago that knocked it out in a couple of days. He said he didn’t want to give me that, rather wanted to give me an older antibiotic that I would take for 14 days.  Argh! Well, I listened to him (sometimes hard for us RNs) and my prescription was about $7 instead of the $90 I paid before. And I was feeling better in a couple of days anyway.




Last, both individual and group health plans usually have mail order drug service available. Look into it by calling the Member Services number on the back of your ID card.  When a health insurance plan offers mail order service, usually you can get a three month supply for the cost of a two month supply. Mail order doesn’t really work for something you need now, like an antibiotic, but if you have maintenance medications you take daily for your heart, blood pressure or asthma, a little planning will save you money and help decrease the cost of health care.


Of course, just staying healthy is the best option of all; Be Well!

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