11 years ago ·
by Alston ·
Comments Off on 8 Individual Medical Insurance Myths
- Myth: Group insurance costs less than private health insurance
- Myth: COBRA costs less than buying health insurance on your own
- Myth: You can wait until you are pregnant to get maternity insurance
- Myth: Insurance companies make obscene profits
- Myth: You can’t be turned down for insurance if you’re currently insured
- Myth: A high deductible plan is a waste of money
- Myth: All health insurance policies cost about the same
- Myth: Any pre-existing condition will keep you from getting health insurance
Myth: Group insurance costs less than private health insurance
Individual or private medical insurance plans almost always cost less than group insurance in Connecticut. This may or may not be true in your state. However, in Connecticut, when a a company offers group health insurance they cannot refuse to cover someone based on their health status. This is not true for individual and family plans. This means that more claims are filed on group insurance plans. This makes the prices higher.
Myth: COBRA costs less than buying health insurance on your own
COBRA merely gives you the right to continue your group insurance. For the reasons outlined above, COBRA health insurance rarely costs less than a health insurance plan you can buy on your own.
Myth: You can wait until you are pregnant to get maternity insurance
Health insurance companies are set up to accept risks, not to accept near certainties. A woman who is pregnant is not likely to pay more in premiums than she is to receive in benefits. Insuring a woman who is currently pregnant is a money loser for the insurance company. None of the private health insurance plans offered in my state will accept a woman who is pregnant. Be sure that you have an insurance plan that covers pregnancy in place before you conceive.
If you want to conceive while covered by COBRA. There are two things that you should be aware of. First if your due date is after your COBRA expires, you may get stuck with a big hospital bill. Second, your baby may not be eligible for insurance for very long after he or she is born. If your baby has a significant medical condition you may not be able to find coverage for him or her after your COBRA runs out. Purchasing a family health insurance policy that covers maternity expenses or waiting until you have another job that offers you health and maternity insurance will probably put you in a better situation.
Myth: Insurance companies make obscene profits
This is only half a myth. Big insurance companies do make tremendous sums of money. However, they don’t make a lot on each policy. In fact, if you took the insurance companies’ profits away and reduced the cost of health insurance premiums by that amount people would barely notice. A good health insurance company will pay about 80 percent of the money it receives in premiums to cover their policy holder’s claims. When you take the other expenses into consideration, health insurance companies profits are typically well under 10 percent.
Myth: You can’t be turned down for insurance if you’re currently insured
This is not true in every state, but in most states health insurance companies will ask medical questions and use other methods to determine your health status. If they feel that you are likely to cost them too much in claims, they are unlikely to insure you. You may qualify for a state sponsored program, but these plans are likely to be very expensive. Most people in Connecticut are unwilling or unable to pay the premiums for the state’s high risk pool.
Myth: A high deductible plan is a waste of money
Health insurance policies with high deductibles will typically cost much less than a similar plan that has a low deductible. If you take the difference in the premium into consideration, you will probably come out ahead by buying the higher deductible plan. If you invest the money that you save when you buy a lower cost health insurance policy and only take from those investments when you have an uncovered medical expense you will probably have a good sum in your account when you decide to retire. You can in effect be your own insurance company for the small stuff.
Of course, you don’t want to be your own insurance company for the big stuff. Decide how much risk you can comfortably take on yourself and take a long look at heath savings account compatible high deductible health insurance plans. These plans work well for a lot of people.
Myth: All health insurance policies cost about the same
Medical insurance plans have wide variances in regards to price and quality. In fact, in many instances some of the worst companies have the highest prices. It pays to work with an agent who works with several companies. His or her opinions are likely to be less biased and you may be directed to a high quality plan that has a reasonable premium.
Myth: Any pre-existing condition will keep you from getting health insurance
I often have clients who think that their asthma, high blood pressure or high cholesterol will keep them from getting coverage. Sometimes one of these conditions will be severe and prevent a client from getting coverage but not in most cases. In fact, many people who have cancer in their medical history can be approved, if enough time has passed since their last symptom or positive test result. It pays to have a frank talk with your agent before deciding that your preexisting health issue will prevent you from qualifying for coverage.
11 years ago ·
by Alston ·
Comments Off on 8 Private Medical Insurance Mistakes
8 Private Medical Insurance Mistakes
Buying Health Insurance? Don’t make these mistakes
Private medical insurance has been my specialty for over a decade. I talk with hundreds of people each year and many of them make one or more of these common mistakes.
- Don’t Cancel Your Health Insurance Policy Too Soon
- Don’t Think COBRA Costs Less
- Don’t Get Pregnant Without Maternity Insurance
- Don’t Keep Your Maternity Insurance Too Long
- Don’t Buy a Discount Plan instead of Health Insurance
- Don’t Buy a Health Insurance Plan Not Approved for Your State
- Don’t think Low Deductibles Are Always Best
- Don’t Lie on Your Application
Don’t Cancel Your Health Insurance Policy Too Soon
Never cancel an existing health insurance policy before your new policy is approved. Too many things can happen to the human body to take that risk. Being without health insurance, even for a day can mean exposing yourself to hundreds of thousands of dollars of exposure.
Many people think that they need to wait until the last minute to apply for a policy in order to keep from paying two companies for the same month of coverage. Private medical insurance companies will typically let you apply two months in advance of the date you need coverage. Try to apply at least a month before you need coverage. This way you have a good chance of receiving your approval letter early enough that you can cancel your old policy before the new one goes into effect.
Don’t Think COBRA Costs Less
The COBRA act gives former employees of medium and large corporations the right to continue to purchase health insurance through their former employer for 18 months. Too many people wait until they are nearing the end of their 18 months to start shopping around for coverage. I’m sure that people think that their COBRA insurance is their best an lowest cost option. This is not usually true. If you have a pre-existing medical condition that will keep you from qualifying for a private health plan, COBRA may be your best option. Otherwise you should start shopping for health insurance as soon as you decide to leave your employer. COBRA is often twice the price you would pay for a comparable individual health insurance policy.
Don’t Get Pregnant Without Maternity Insurance
Many if not most individual health insurance plans will not cover the expenses of pregnancy. Today those expenses can be twenty thousand dollars or more. If you are planning to expand your family, make sure that your present policy will cover maternity and make sure that you have satisfied any waiting period before you conceive.
Don’t Keep Your Maternity Insurance Too Long
Pregnancy is expensive and so is the insurance that covers it. I will occasionally talk with women who have had their tubes tied who still have policies that cover maternity. Removing the maternity insurance rider or purchasing a policy that does not cover maternity will save you hundreds or thousands of dollars each year. Having pregnancy insurance when you don’t need it can cost you.
Don’t Buy a Discount Plan instead of Health Insurance
Often clients will purchase plans that for all the world appear to be health insurance policies. However, in many cases, they are not medical insurance; they are merely discount plans. Discount plans have their place, however if you think that you are getting too good of a deal on your plan, make sure that it is actually an insurance plan.
Don’t Buy a Health Insurance Plan Not Approved for Your State
Any private medical insurance plan you purchase should be approved by the state you live in. Contact your state’s insurance department and make sure that any company you decide to do business with is approved by your state.
Don’t think Low Deductibles Are Always Best
Health insurance plans with low deductibles or zero deductibles are often sought after by my clients. However, the higher price for these plans often far outweighs the increase benefits. If when comparing plans, you add the amount of the deductible to the amount annual premium you will often find that the high deductible plan has a lower overall cost, even in a catastrophic situation.
Don’t Lie on Your Application
Insurance companies have up to two years to rescind your policy. If they catch you in a significant misrepresentation, they can cancel your policy and force you to pay back any money they have paid for your claims.
11 years ago ·
by Alston ·
Comments Off on Home Insurance – often overlooked
Home Insurance – often overlooked
Home insurance is often overlooked. It costs less, so we think about it less. There aren’t cute reptiles or amphibians that remind us about our house insurance on our Televisions.
However, home insurance is a critical part of our financial planning. Why? If your homeowners insurance isn’t set up properly, you may wind up losing all the money you have saved and invested.
To a lesser degree, this is true of renters insurance. Renters insurance is thought of even less often. Often people are unaware that apartment renters insurance even exists. Families who live in apartments often have thousands of dollars of possessions that are at risk to fire, to burglary and to other perils. Protecting your possessions properly keeps your finances in tact.
Do you have enough coverage to replace your home or your important possessions?
If the cost of construction has gone up in your area, you should make sure that your homeowners insurance policy has a high enough limit to cover that costs. Remember not to over insure by insuring the cost fo the land. Typically the cost to rebuild your home is much less than the price your house would sell for.
Are you paying the lowest price?
It pays to shop around. When shopping around be aware that you may pay less if you insure your car and home with the same company.
Questions like these should be reviewed with a home owners insurance professional. Protecting your home is protecting your savings. Being without house insurance can be just as devastating as being without automobile coverage.
11 years ago ·
by Alston ·
Comments Off on High Health Insurance Costs – Who’s to Blame?
A good group or private health insurance company will use about 80% of the money it receives in premium dollars to pay for the medical expenses of its policy holders. The health care debate focuses on who has to pay for our health care and on reducing the 20% that is left over. If we want to win this battle and have a country that is healthier both medically and financially, we need to focus on the 80%. If we do nothing to reduce the cost of healthcare, the cost of the insurance that pays for healthcare will continue to escalate.
I believe in universal health care. I believe that we have enough resources to ensure that basic medical care is available to everyone. I don’t believe that the other countries that provide this to their citizens are better than we are as a people. However, whether we pay for medical care through premiums or through our taxes, the cost that drives the cost needs to be addressed.
Greedy Health Insurance Companies
The idea of the big company with greedy people at the top is common theme in literature and movies. However, insurance company profits have little to do with the escalating costs of medical insurance. Even the 20% that is left over after the medical bills are paid isn’t profit. The insurance companies have other expenses. They have buildings, employees, utilities and enough other expenses to drive the typical profits down well below 10%. Do you think that reducing the cost of health insurance by ten percent or even twenty percent will solve our health care crisis?
When we have to dig too deeply into our wallets to fill our gas tanks, some of us blame the greedy gas station owner, not realizing that her hands are tied. If the cost of a barrel of oil has gone up she would have to operate as a charity in order to keep gas prices down. It is a lot harder to have empathy for a big company in a similar situation. But we need to recognize that the situation with health insurance is similar so that we can focus on the real problem.
Health Insurance Costs – the real problem
What drives the high cost of medical insurance is the cost of medical care; doctors and hospitals charge more and we use their services more frequently. I don’t know if we want to lower the salaries of our medical professionals. If we want our brightest students to consider medicine as a career, we need to make the field attractive. Paying our doctors, nurses and other medical professionals well is one of the ways we do this. On the other hand, reducing the frequency that we visit these professionals for sick-care as opposed to preventative care will reduce the overall cost of health-care and thereby reduce the cost of health insurance.
As I see it, we have to increase awareness regarding the impact of a healthy lifestyle verses an unhealthy one. We perhaps need to give incentives to people who do certain things or don’t do other things. There should be a cost-benefit analysis done to see if we should invest more money enforcing seat belt laws or OSHA regulations. Perhaps we should tax table salt. We should certainly be much more aggressive in regards to tobacco use.
Lowering Health Insurance Costs – final thoughts
Whether we pay for health insurance through our tax dollars or through our premiums, we will only have impact on the cost if we focus on the 80% instead of the 20%. We can’t reduce the cost of medical insurance if we continue to increase the frequency of our hospital stays, doctors’ visits and prescription use. If we drive to dinner each week and order steak and lobster we may wind up arguing about the who pays for the ride and the food. If we walk to dinner and have salads and have a tasty, but less expensive entree we might have to find something new to argue about.