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Taxes on annuity earnings? Are you kidding me?

2010-02-27 by 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.

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Category: Annuities



If you think a 39% increase in California health premiums are bad, did you hear about Georgia?

2010-02-24 by Colleen King

Anthem Blue Cross should thank Blue Cross/Blue Shield of Georgia for coming up with something causing even more outrage than they did. An article in today’s Atlanta Journal-Constitution tells the story of a gentleman who had a 72% increase in premium. On the surface it looks like maybe one of the reasons was because he turned 60. That’s usually a big ‘bumping point’ in premium. But it’s on a policy with a $10,000 deductible?  Like any other article on this type of subject, it went on to say that most increases weren’t nearly that high. But it only takes one to catch a headline.


The president of the National Association of Health Underwriters (NAHU) said he didn’t think the carrier was gouging with this rate increase. I sure hope not, and that they can back up the reasoning for it. As an agent, I view my/our relationship with insurance companies is a partnership. Hopefully neither of us throws the other under the bus. But if this and other significant increases aren’t justified, it gets hard to defend.


Yesterday, Leslie Margolin appeared before the Assembly Health Committee to explain Anthem’s position and has promised to work with lawmakers to try and bring down costs. But it’s not a matter of just insurance companies and the cost structure, it’s all parties–physicians, hospitals, drug makers, device makers, you name it.


I”m spending a lot of time these days helping my clients look for more affordable coverage. But you can only move people around so much. If one carrier has an increase the others will too at some point. Until the day comes when we truly have suitable reform, that’s the best we can do. I think. Hope so!

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I’ve got insurance, why does care for the indigent or uninsured matter to me?

2010-02-20 by Colleen King

I know I’m not a political or social services writer, but our pals at the L.A Times Wednesday had an interesting article on how the County of Los Angeles reimburses physicians when they care for the uninsured.


How does this affect your health insurance premiujms? The Physicians Services for Indigents Program in L.A. County was paying doctors 29% of their estimated fees until last January when they cut it to 27%. Now, this week the rate will be reduced to 18% effective July 1. Can you imagine doing your job for less than 1/5 of what you normally earned?


If you think this doesn’t affect your health insurance premiums, think again. This is one of the biggest reasons for health care reform. You have people who need care and can’t afford it, and physicians (and others) who are willing to provide it, but something has to give. Cost shifting to insured patients happens when physicians and hospitals have to get costs handled somewhere.


And speaking of hospitals, the article by Molly Hennessey-Fiske and Ron Lin points out that physicians may go to hospitals for reimbursement. I know back in the day when I was an emergency nurse in downtown LA and Hollywood, the emergency physicians would try to negotiate something with the hospital when they saw the obligatory uninsured. Which downtown, was a vast majority of the patients. But that was back in the day when reimbursement was better and more people had jobs with health insurance provided.


All this to say, be kind to your local emergency physician and keep your policy current. Or get one if you can. The costs you incur can be disasterous if you aren’t insured. And until there’s a more palatable way to handle health care reform, well, enough said.


Have a great weekend, stay dry and stay out of the ER.

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So, what was Anthem’s response to all the ‘rate rage?’

2010-02-18 by Colleen King

Last week Wellpoint, the parent company of Anthem Blue Cross, put out a response to the screaming about their recent rate increase. Click here and check it out.


It’s long, but I think potentially worth reading if you’re at all curious. If nothing else, the earnings statement Brian Sassi makes is impressive: “Anthem’s net income on a per-member-per-month basis was $12.62 in 2008, which compares to $18.45 and $13.22 for our two large not-for-profit competitors.” Guess we’ll find out later who those folks are, right?


So what was it in 2009? Well, they’ll get to that I’m sure. But in his response to Kathleen Sebelius, Sassi points out that membership has dropped off; mainly healthier clients that are looking to save money and feel they don’t need health insurance. That leaves people with health issues who will cost them more money.


Each carrier has rate increases; I’ll be interested to see what happens as the year progresses and other ‘rate actions’ come up.


So in the meantime, what do you do if you’re rates are dragging you down? You can do what I did and apply to another carrier, or even downgrade your plan with the carrier you have now. Do you need every office visit covered if you only go to a doctor once or twice a year? Maybe not, it ends up being a personal preference/comfort for each individual. And being willing to pay for the smaller things generally will end up saving you a significant amount on premium.


And consider working with an independent agent. We don’t cost you a dime and we can give you rates from all the companies. Otherwise you have to call each company, and have multiple reps call you back. For me, I have a specific set of companies I prefer to put people with because they tend to work best for most. That doesn’t mean the other companies aren’t okay, like anything, it’s a matter of personal experience.


Now at least you have a bit of a reprieve if you’re with Anthem, the increases won’t hit until May 1 now. But don’t wait to make changes, because everyone will be scrambling at the same time which slows the process.

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Category: Uncategorized



And the Anthem rate increase debate rages on–still?

2010-02-15 by Colleen King

Well, it’s been just over a week since the rate increase heard around the world hit and people are still going


Anthem Blue Cross, Woodland Hills, CAAnthem Blue Cross, Woodland Hills, CA

nuts. President Obama has expressed outrage. Kathleen Sebelius isn’t satisfied. California Department of Insurance Commissioner Steve Poizner allegedly said that people shouldn’t buy from Anthem Blue Cross (I say allegedly because another agent told me this, I didn’t see it myself in writing.) If that last one is true, personally, I feel it’s reckless for the Commissioner to make a statement like that unless he’s seen the documentation. But, he’s running for governor so it’s another chance to get in the media.


I really hope that all this screaming and chest beating gets us somewhere. Most people need relief from their health insurance premiums that’s for sure. Anthem’s defense is that despite ‘profits’ of $2.7 billion in Q4 2009, they lost money on their individual health insurance policy unit overall in 2009. They say they paid out more in claims than they took in. And that’s entirely possible, we’ll never know until the investigations are done. And I would LOVE to see the results of any audits. Think about it–they have to be able to justify what they are doing, because anyone can call rate changes into action at any time. There has to be some justification for what they are doing, and since 30-39% increases aren’t hitting everybody, you know there’s more to the story.


Don’t get me wrong. Just because I sell insurance doesn’t mean I agree with everything they do. BUT, having worked in a national level operations unit I know how stories get twisted. And you do too, just from your everyday consumption of the media. Remember if it bleeds, it leads. This time it’s just bleeding Anthem blue.


So while everyone is going nuts, what do YOU to help your situation. First, I will tell you to keep in mind, the more you want from a plan, the more it will cost. So next, tune in tomorrow and I’ll give you some suggestions to help cut your health insurance premiums. Not all of my suggestions work for everyone, but there may be one or two for you. Or at least it will help you understand better how this all works.


Be well!

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Anthem Blue Cross is raising individual policy rates–it’s that time again?

2010-02-10 by Colleen King

I would have gotten to writing this sooner but I’ve been talking/emailing with many of my clients today about the Los Angeles Times story today talking about Anthem Blue Cross’s March 1 rate increase. The story is claiming an average of 30-39% in increases.


First of all, we all know the media loves controversy and shock value. As usual, they skipped a couple of things. Don’t get me wrong, just because I sell health insurance doesn’t mean I agree with all the carriers say and do. Independent agents like myself want to see some changes in how health insurance works because we spend a lot of time trying to get people covered, trying to appeal above standard rate increases and declines, then we have to take cover when the increases hit.


I pulled out my Anthem list of March 1 increases to see how many of my people are in the 30-39% range–none of them. Anthem has gone to ‘anniversary date’ ratings recently so that the increases don’t all hit on March1; it’s tough for them and for agents trying to help their clients. Otherwise I would have had about 60 people calling me. So out of my 12 people getting increases this month, three are dental plans only, and those increases are from 5-13%. But that’s dental you say, so what?  How much were the medical increases you ask?

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

2010-02-09 by 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!

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Category: Uncategorized