Ask Colleen King

Even though the big, massive health care reform bill has passed, not much will be changing for the next couple of years. So if you’re on your own and needing to buy an individual plan for you and/or your family, how should you do it? Call an independent agent, call an insurance company, or just go online and not deal with any of those pesky people?

Well you know what I’m probably going to suggest, but here’s why. If you go directly to a carrier, they can only tell you about their products. You can go to one of the big online ‘anonymous’ type sites, but do you really know what you are looking at? If you are versed in health insurance, of course you can do this on your own, no sweat. But I find most people are still confused and if they do it on their own, they are surprised with what they end up with.

Here’s another reason to go with an agent. I had a client approved this week, and she had a couple of relatively minor issues, but instead of getting approved at a standard rate, she was rated up 50%! I called her, clarified what the circumstances were for the two reasons given for the increased rate and then emailed my account executive at the carrier. I explained the circumstances, and was hoping he could get the rate from a 50% increase to maybe just a 25%. Imagine my surprise when he came back with a STANDARD rate. I was thrilled, my client ecstatic, the world was a happy place.

Does this happen all of the time? No, not even most of the time. To me, in looking at the situations these issues were borderline. And my account guy being the gem that he is, he agreed. There’s a strong probability that if I had just called underwriting, I wouldn’t have gotten the standard rate back. But maybe I would have.

Point is in all this, most individuals wouldn’t have known where to go with this, would have just said oh well, and either kept the plan at the higher rate or dropped it all together. One of the big reasons for health care reform was for the states where there was little or not competition. And there are some states with only 1-2 carriers. But in California we have 6-7 major carriers and some smaller ones, so there is plenty to chose from. That’s another reason to use an independent agent, so they can help you find what you want and with a carrier that’s best suited for your situation.

Be well!

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On April 15th, Tax Day ironically, Congress voted to extend the 65% COBRA subsidy eligibility period through May 31. Meaning, if you are ‘involuntarily terminated’ from your job and not for ’cause’ (’cause’ meaning you did something wrong) you will be eligible for this extension. Eligible folks can have the subsidy of 65% up to 15 months under the current program. Depending on how much that brings down your cost, you might also consider looking at an individual plan but I know that subsidy is tempting.

Since the news came out today that California’s unemployment in March is the highest ever, 12.6%, up from 12.5% in February, that’s probably a good thing. And most likely California’s CalCOBRA program will follow suit as it has before. From the article above, it sounds like Republicans were balking at this bill which also included increasing unemployment benefits and a few other things (click here to see what all) because it supposedly will add $9 billion to the budget deficit.

After health care reform, what’s another $9 billion?

Be well!

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In the recently passed health care reform bill (yes, THAT again) one of the things that was addressed was eliminating co-pays or cost sharing for preventive services. I haven’t heard how that exactly is going to work, but if it’s like other things I’ve seen, not all things labeled ‘preventive’ will be covered. This link is from another state, but the types of services recommended are pretty standard.

Some carriers on their plans already have low or no co-pays for mammograms, Pap smears and PSA blood tests. Colon cancer screening, usually just a smear but sometimes colonoscopy, is included. Check your plan documents or call your carrier to know for sure. But more expensive things, like most ultrasounds, scans, etc., are not considered regular preventive care. Those are considered more diagnostic in nature, meaning someone is probably looking for a problem, so it’s going to be subject to your deductible.

I’ve come across something in the newspaper and television lately that I’m going to check out and you might want to also. And organization called HealthFair.com offers screening packages of tests. You can get a cardiac screening which includes an EKG, ultrasound and arterial stiffness exam, a vascular/stroke screening which includes a carotid artery ultrasound, abdominal aorta ultrasound checking for an aortic aneurysm, and another test that checks for peripheral artery disease. Or you can do both for $199.

These mobile fairs are all over Southern California and I believe across the country. I’m not endorsing yet them as I’ve not used them before but I’m going to check this out. I had a carotid ultrasound earlier this year that WITH the insurance company discount was over $400. I think it’s something to look into though, if you are in your late 40s and up. They offer different series of blood tests, there’s all kinds of things. Cost for these screenings may vary by locations, so don’t hold me to this, check it out for yourself.

This sounds like a cost effective way to at least get a baseline, but is not intended to replace an exam by your doctor. I’m signing up, you might want to check out their site. Got to save where you can!

HealthFair.com

Be well!

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Okay, health care reform–woo hoo! now what? Today’s Los Angeles Times has a good brief overview of some major points of change and I’ve included some of them here. Along with some questions that I feel still need to be answered.

WITHIN A YEAR
* Provides a $250 rebate to Medicare prescription drug plan beneficiaries whose initial benefits run out. This is good because that whole ‘donut hole’ thing doesn’t make a lot of sense, particularly for people on limited incomes.

AFTER 90 DAYS
* Provides immediate access to high-risk insurance pools for people who have no insurance because of preexisting conditions. Well, we already have a high risk pool in California, referred to as MRMIP. Problem is, it’s really expensive and half the time, you can’t get anyone on it due to a lack of funding.

AFTER SIX MONTHS
* Bars insurers from denying people coverage when they get sick. What does this really mean–ANY coverage, or high cost services, or things that weren’t going to be covered to begin with?

* Prevents insurers from denying coverage to children who have preexisting conditions. Children, not adults yet. And what about rates? Anything about cost containment included in here?

* Bars insurers from imposing lifetime caps on coverage. There are some low end plans that have ridiculously low limits, either lifetime or per year. Most though, at least in the California individual market, have limits of $3-7 million lifetime. Most of us won’t ever come close to that, so this isn’t always as big as it may initially sound. Once again, for me, this means you really need to look at what you are buying and have a good agent you can talk to about what you are buying.

* Requires insurers to allow young people to stay on their parents’ policies until age 26. Well, most plans they could already stay on until 22 or 23 if they were full time students. If they have health issues, this is good. Depending on the family, if they don’t, it could be more cost effective to put them on their own plan.

2011
* Requires individual and small group insurance plans to spend at least 80% of premium dollars on medical services. Large group plans would have to spend at least 85%. With most carriers, that is almost happening now the majority of the time. Problem is, don’t you still want to look at cost containment? If you HAVE to spend it, it will be spent, but what about waiting for a rainy day and keeping something in reserves?

2013
* Increases the Medicare payroll tax and expands it to dividend, interest and other unearned income for singles earning more than $200,000 a year and joint filers making more than $250,000. Really makes you want to go out and achieve, doesn’t it? This moves the tax up to 3.8%

2014
* Provides subsidies for families earning up to 400% of the poverty level to purchase health insurance.
* Requires most employers to provide coverage or face penalties.
* Requires most people to obtain coverage or face penalties.

On all three of these for 2014, let’s hope the economy has turned around otherwise there will be a ton of people on that subsidy level.

Be well!

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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?

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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.

Tags:   health care reform · Health insurance · indivdiual health insuranceNo Comments.

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.

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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!

Tags:   Health insurance · Health Savings Account · HSANo Comments.

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.

Tags:   Annuities · fixed annuities · fixed indexed annuitiesNo Comments.

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!

Tags:   health care reform · Health insurance · Individual Health InsuranceNo Comments.