Ask Colleen King

All the questions you've had about health insurance, life insurance, annuities and long term care insurance (but were afraid to ask)

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Prescription drugs and the high cost of health insurance–related?

March 1st, 2011 by Colleen
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Okay, so it’s one reason that insurance premiums are so high, but it’s a big one.

On AOL today there was an article about several drugs that will be coming off patent–big name drugs like Lipitor. Drug companies, in order to recoup their ‘research and development’ costs have exclusive rights to a drug they develop for several years. Read here for more. And check out the BILLIONS in sales each of these generates!

Is your drug on this list? Well, if you take Lipitor, Protonix, Zyprexa, Concerta or several others, over the next 2-3 years you’ll see a drop in costs. If you don’t have health insurance, one thing that I’ve told my clients to do is check at Costco. You don’t have to be a member for prescription purchases necessarily. They have a ‘price checker’ on their site that I refer to often. Prices can vary by location, and the pricing here is based on buying from Costco.com. Check your local Costco to see what the cost actually is. The one in Northridge near me is usually pretty close.

Point is, to bring down the cost of health care in general and insurance too, you have to be a saavy consumer. Many studies show that people spend more time researching an auto or TV purchase that things related to their health care. Enough of ‘buyer beware,’ time make smart choices. You can start with your drug purchases.

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What do I do about a ‘child only’ health insurance policy in California?

January 24th, 2011 by Colleen
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When health care reform was voted in last year, one of the first items that when into effect September 23, 2010 was the guarantee issue of plans to kids under age 19 without regard to pre-existing conditions. Problem with that was that insurance carriers had no idea what the liability was going to be so instead of risking a big financial hit, several opted not to write ‘child only’ policies since obviously, the most likely people to try to get coverage were those who had medical needs.

Well, the California Legislature passed a bill requiring carriers who wanted to sell in the Individual plan market in California has to participate in an ‘open enrollment’ period for kids under age 19. This all came about fairly late, there are things still to be determined but in a nutshell, here are the basics:

Open enrollment is January 1 to March 1. If you miss this time period, there is also the month of the child’s birthday.

These parameters may change in the future. These time frames do not apply to having kids on your family’s insurance plan. There are a few other circumstances so call me if you have questions.

So if you need coverage for your kids, or if you have friends with kids, please share this information with them. Call me, call your agent if you have one other than me, just get the ball rolling because time is limited!


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Health care reform compliance, and the IRS is going to be the monitor?

January 14th, 2011 by Colleen
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I came across an article recently published by USA Today that reminded me of the big wake up call we have coming in 2014 when the bulk of the health care reform measures go into effect. Check out this article by Sandra Block, “IRS lack clout to enforce mandatory health insurance.”

This article lists estimates of needing 16,000+ IRS agents to enforce this eventually. The Congressional Budget Office is estimating the cost at $5-10 billion to administer this. And that’s just the start.

My concern along with other agents in California is the price tag on all the changes. Even though people aren’t happy with rates in LA and Ventura counties, you are definitely paying less than places like Massachussettes, New York and New Jersey. And now that you are looking at eventually subsidizing people, not excluding for pre-existing conditions, rates will soar. But the IRS can’t apparently enforce these new provisions in the law.

For example–30 year old male in New York City, hospital only plan would run $176/month. No deductible, but no coverage for office visits, most outpatient care or prescriptions. Which is more of what a 30 year old would need. You could get something comparable in the SFV area for $78-99/month, but there would be a deductible.

The same 30 year old, wanting a more comprehensive plan, opts for a $2000 deductible, $30 office visits, 80/20 coverage, sounds great right? Are you willing to pay $529.06/month for that? That’s a real figure for the 10009 zip code. I can find $2500 deductible, 70/30 plans with three office visits per year with generic and brand coverage for $111/month here in the Los Angeles area.

So you might want to look for coverage now, while it’s affordable in California. No one really knows what will happen once all this starts to kick in. Pretty scary!

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So now that health care reform is starting to hit, will it all really work?

December 9th, 2010 by Colleen
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Once again, Robert Laszewski, the ‘go to’ guy for all things health care reform or industry in general, wrote a very insightful blog post this week on the how the fact that there isn’t bi-partisan support for the health care reform bill could ultimately lead to it’s evisceration. Click here for a brief, terrific article.

The Dems can’t even agree at this point, let alone both sides of the aisle. States are looking to drop out of the requirements because participating in exchanges, etc., could ‘destabilize’ the market by causing carriers to leave their states. California was one of the first to try creating an exchange, but the support is questionable.

How is health care reform affecting you? Rates in a lot of areas of So Cal, let alone the country, are going up to accomodate the requirements like taking on kids up to age 19 without regard to pre-existing conditions. The back lash? Several carriers are no longer writing ‘child only’ policies because they are assuming only the sickest will rush to buy coverage. So this takes away an option I’ve used with clients when adding kids to their group plan was really expensive. I’m still waiting after two months for Anthem to release their better individual plans–they’ve been held up because of regulatory review in Sacramento. Any time carriers make material changes to plans they have to go through review, so not sure what’s holding the party up. I have a list of a dozen clients that I need to rerun proposals on once the Anthem plans are available in our area. Free quotes are the lifeblood of my business but sending them plans that I don’t think really fit the bill or aren’t much less expensive makes no sense.

So in short, have patience with your agent–we’re all going nuts!

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Health care reform laws are starting to be successfully challenged in court–or are they?

October 11th, 2010 by Colleen
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Still looking for this intersection? Aren't we all

Hello LA, I’m back from vacation and certainly while I was gone there were a lot of things going on in health care reform

In Friday’s Los Angeles Times there was an AP article about a federal judge in Detroit who ruled against a challenge contesting the legality of the Federal government requiring people to buy health insurance. According to U.S. District Judge George Caram Steeh in Detroit, the ‘mandate to purchase’ is legal. Or as the paper said, ‘is not illegal’–when it comes to things like this, there could be a difference, you never know.

The point is, we are already seeing the impact of ‘mandate to issue’ coverage to kids under age 19 regardless or pre-existing conditions. (Click here for details.)  Most of the major carriers in California  are no longer issuing ‘child only’ policies. You can add your kids to your group coverage or your family’s health policy but the rates are starting to pop. Common sense will tell most of us, if the carriers have to issue coverage to ‘all,’ who are the first people going to be in line to get it? Sick folks, folks with problems, that should not come as a surprise. And if everyone is not required to buy, people will tend to buy only when they need it then drop it when all’s well. That isn’t going to work financially.

I’d like to convince people that everyone should have coverage as a means of making the overall concept work, and protect themselves financially but most would probably think I’m only looking for the next sale. But the reality is, this reform is only going to work if everyone’s in the pool, so to speak. And don’t think this will be the last court challenge, there are already several in the works and it’s only getting started.

There’s a case being heard in a Florida court that’s been filed by 20 states, and another one in Virginia. So stay tuned, because whatever happens it will affect us at some point in So Cal.


Have a great week!

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How can I make long termr care insurance more affordable?

September 27th, 2010 by Colleen
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Some people think they have to have a long term care insurance (LTCi) policy that covers everything for many years. Often people want to look at a ‘lifetime’ benefit, maximum daily or monthly benefit amounts, and a few other things to minimize their out of pocket expenses when care is needed. But then they get the quote and it’s astronomical, perpetuating the idea that LTCi is too expensive.

But do you need all that coverage? You need to know that LTCi, like health insurance, is not intended to pay 100% of the cost. It’s intended to cover a majority of the expenses though. Here are a few tips around the pieces of a long term care policy to consider to make it more affordable:

  1. Benefit Period–people frequently want lifetime benefits but the reality is once someone is receiving custodial, nursing home or assisted living care, the average length of time care is needed is about 2 1/2 years. We’re not talking about something simple you need help for a few weeks then you’re fine. We’re talking generally older people closer to the end of life. And now, some carriers don’t even offer a lifetime period. I usually start with clients by looking at a 3 year benefit period. If they can afford it and they want it, we may go to a 4 or 5 year period, or cut it back to 2 years. Remember, Medicare will pay for a limited amount of skilled nursing care only. And who knows, that may change at some point the way things are going.
  2. Elimination Period–Some people also refer to this as a ‘time deductible.’ This is the period of time that you actually need care before your policy kicks in. My starting point is 90 days. The reason is that if you need skilled care, Medicare or your private insurance will cover usually about 100 days. If you need home custodial care, it’s possible to add an inexpensive rider that will give a zero day elimination period for home care. Depending on your finances, you might want to stretch out the elimination period to 180 days.
  3. Inflation protection riders–You most likely will want this in some form. The inflation protection piece makes your daily benefit amount increase a certain percent on the anniversary date of the policy each year. Ideally, especially if you are younger, you should really consider a compound interest rider. This is usually less expensive than starting with a significantly higher daily benefit amount. If you are a bit older, you might be able to get away with a simple interest inflation protection rider, because in that scenario starting with a higher daily amount and simple interest could be less expensive than a comparable policy with compound interest.

Different insurance companies offer different combinations in elimination periods, different riders, benefit periods, all sorts of things. So if the first quote you get sounds ridiculous, ask questions, either of the agent you are working with or ask another for information. Because the government isn’t going to take care of this, and you probably don’t want to saddle your kids with your care.

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Health care reform’s high risk plans are being set up in Michigan and New York, what about California?

September 10th, 2010 by Colleen
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There have been a couple of articles the past couple of days about the Pre-existing Condition Insurance Plans (PCIP) that are being set up in Michigan and New York. You might want to check these out as they will be an example of things to come. Michigan’s PCIP plan and New York’s PCIP plan, called the Bridge Plan.

New York has received just short of $300 million and Michigan $141 million of the $5 billion set up by the federal government to put this into action. None of the articles I’ve read on this in general have talked about how much the cost is going to be to the people who can’t qualify for insurance on their own, but the word ‘subsidy’ in many forms have been used is all of them.

What about California? Well, we’re not quite there yet. There is proposed legislation AB 1602, that is meant to set up an exchange, but there are some definite flaws and the insurance industry in CA is trying to mount opposition. We want to see changes too, that’s not the problem. We just need the right changes.

First, there is no ‘open meeting’ provision, minimal to no regulatory oversight and with a $30 million budget being proposed, you want some sort of oversight, come on! Additionally, it presses for standardization of plans being offered, meaning there could be as few as 10 plans offered. And because some would be HMO type plans and those aren’t always available in rural areas, there could be fewer than 10 plans.

As an agent, the requests I get for plans really vary. Some want high deductibles of $5,000-$10,000 and others don’t want anything higher than $500-$1000. Some want HMOs, some want PPOs. Not all doctors are contracted with all plans, so then what do you do? You want to avoid seeing non contracted doctors when possible because the coverage from your insurance carrier is lower.

There are many other details in this, but basically it is just not a well written bill. There needs to be a larger selection/variety of plans, and let the free market sort it out. When insurance carriers introduce plans that don’t sell well, they stop offering them. And the thought of a government entity running a ‘new’ program with minimal to no oversight, uh, yeah, right.

We already have a budget problem in this state, and theoretically someone’s watching. Let’s not let this spread…..

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Can I check out health insurance rates? What’s involved in them always going up?

September 4th, 2010 by Colleen
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Okay, I realized today that I’ve evolved into the ultimate insurance nerd. A few of weeks ago I subscribed to a service with the California Department of Insurance (CDI) where I can receive certain updates as they come in. Previously I got things on licensing requirements, you know, the usual professional stuff.

But now I’m getting information on when insurance carriers file their new rates for ‘approval’ with the CDI. This isn’t easy stuff to read, so if you’re having a bout of insomnia one evening, you might consider checking out rate increase information as it is submitted.

So I started out with Aetna, and wasn’t going to be deterred by the fact that it was 93 pages. What you will see if you check this stuff out is what’s being proposed for new business rates quarter by quarter. Aetna and most other carriers have a 12 month rate guarantee so your rates don’t go up right away but as you all know they do go up at least once a year. But reading all that is taken into consideration, hhhmmmm. I knew the basics but looking at this was a bit daunting.

Then I decided to check out Anthem–their latest filing was 386 pages. But that’s because they have a billion plans and a somewhat convoluted way of assembling their rate sheets. But I went through it all anyway, looking to see what would potentially be happening with my rates once my guarantee expires. I’m not thrilled. If it read it right, it will be going up about $50/month.

You have to know that all carriers in our area are going to have to be doing something in order to comply with the new health care reform bills. And that is listed in these filings as a reason for the rates; no more lifetime maximums, preventive services covered with no cost sharing, no limits on complex radiology and lab tests, and so on. These are all going to add to their costs, once people catch on to particularly the preventive services piece. Check out what is being included in the preventive services arena.

My advice? Not only are rates going up, but many plans will be changing as well. If you are in the market for an individual/family plan, get rolling on it ASAP so you can take advantage of the carriers that offer a 12 month rate guarantee.

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Nice to know SOMEBODY likes insurance agents; guess who?

August 19th, 2010 by Colleen
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The word is out–according to Alison Bell of the National Underwriter web site insurance commissioners in several states, including California (Thanks Mr. Poizner!) have come out with a resolution urging keeping a role for the independent agent as the PPACA (aka health care reform) moves forward. Check this short article out.

Makes sense if you think about it. People generally don’t understand health insurance now, and every other day there are new things coming to light with the new health care reform bill. Someone needs to explain it and help people make decisions. So does it make sense to create another government bureaucracy from scratch, hire all those people who require desk space and benefits? Or go with the independent agent structure where we don’t make anything unless we do something for someone. And no one has to give us benefits necessarily.

Of course I’m biased as an agent. I have a business that fits well with the So Cal lifestyle. I can work 6 hours a day, or 12 as needed. As new employer regulations come in, employers are going to need a resource still. Someone that will go to bat for them when there’s a problem, because they are running their own business. And everyone needs help decoding their explanations of benefits.

Between massive egg recalls and Dr. Laura quitting radio, there’s just TOO much to keep track of! You’ll want to keep us around…..

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The Connection Between Health Care Reform and Preventive Services coverage

August 11th, 2010 by Colleen
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One of the big things that was to be emphasized by the Patient Protection and Affordable Care Act (PPACA) was removing cost barriers to many preventive services.

July 14th the announcement was made by the White House as to what those services are–click here for what is the current comprehensive list:
Covered Services

These services as of September 23, 2010 are to be covered without ‘cost sharing’–before the deductible has been met; no co-pays, no co-insurance. But predominantly on ‘new’ plans. Some of the existing plans will adopt these provisions.

So is this a good thing? People can’t afford to pay for these services so they don’t obtain them in theory. My biggest concern is that we are about to see the ‘Affordable’ go out of the Affordable Care Act. Think about it–these are not ‘free’ services, since someone is going to want to be paid to do them. They are free to you, but they aren’t free.

I’m not being a grinch about this, just a realist. Insurance carriers are going to have to pay someone to do these. And someone’s going to have to pay the insurance companies. Three guesses who that is…..

So IF you have preventive services you need done, check the list above. If you can wait, you might save some money if you do them after September. IF your plan works that way. IF they’re a covered service. IF there isn’t some other question that didn’t get answered on the White House call yesterday.

Don’t want to be a downer, but there are SO many questions that haven’t even been asked yet, let alone answered, just please tread carefully. And stay tuned.

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