Archive for the ‘Health Insurance’ Category

3 Kinds of Insurance You Need — and 3 You Don’t

Thursday, April 16th, 2015

There isn’t a lot of talk about insurance in school. So when we become adults, we’re left to consider the dizzying array of insurance policies on our own and wonder if we need all of them, just some, or none of them. It’s almost as confusing as learning the Pythagorean theorem and the periodic table of elements.

So if you’re new to the world of insurance or you could use a brush-up tutorial, here is a somewhat subjective list of the types of insurance you absolutely need, types you may want and those you definitely don’t want to buy.

Insurance You Need

Homeowners insurance. If you own a house, your bank will require you to have homeowners insurance. In fact, “if someone loses their homeowners insurance for some reason – cancellation, nonpayment, nonrenewal, then the bank is notified,” says Dan Weedin, an insurance consultant in Seattle. “They will immediately place their own insurance in it and bill the homeowner. Then they will give the homeowner a chance to get their own. The bank will not allow it to go uninsured for any length of time.”

Unless you’ve paid off your mortgage, there’s really no way out of homeowners insurance.

Auto insurance. This is another must-have. In fact, it’s against the law to drive without some sort of coverage. If you’re caught driving without insurance, you probably won’t go to jail, but your driver’s license will likely be suspended and you’ll be fined.

Health insurance. If you are 25 or younger, you don’t need to buy health insurance, assuming you’re still covered on your parents’ policy. But otherwise, add it to your list. According to, in 2014, if you don’t have health insurance, you’ll have to pay whichever is higher: either 1 percent of your yearly household income or $95 per uninsured adult ($47.50 per child under 18). In 2015, the fee will be 2 percent of your income or $325 per person, and in 2016, it’ll be 2.5 percent of your income or $695 per person. In 2017 and beyond, the fee will be adjusted for inflation.

Insurance You May Need

Disability insurance. Regi Armstrong, president of Armstrong Wealth Management Group in Florence, South Carolina, casts his vote for disability insurance as something everyone should consider getting. “Disability insurance replaces one’s income if we become incapacitated during our working years,” he says. “It’s very important when only one person in the household has an income or one has a much larger income than their spouse.”

Life insurance. Generally, people buy a life insurance policy after they’re married or have a child. As Laura Adams, a senior analyst at, says, “It’s critical when your death would create a financial hardship for those you leave behind.”

Adams also points out that there may be some unmarried, childless people who should get life insurance. “For instance, if you cosigned a car loan, student loan or credit card with a family member or friend, they would be responsible for the entire debt if you died,” she says.

Umbrella insurance. Think of this as insurance for your insurance. “It’s an extra amount of liability coverage in $1 million increments that protects over and above your personal and auto liabilities if they become exhausted,” says Weedin, who thinks middle-class individuals and families and those in the upper middle class and higher should consider umbrella insurance. “Generally, a family can add this policy for between $250 to $300 a year,” he adds.

Whether you need umbrella insurance depends on what you have to lose and how concerned you are about getting hit with a lawsuit. After all, even if you aren’t worth millions, somebody could sue you as if you were. That worry is why umbrella insurance exists. “It’s very important for those who might be the targets of lawsuits, like physicians and business owners,” Armstrong says.

Insurance You Don’t Need

Credit card insurance. In general, stay away from any type of coverage that would pay off a credit account, whether it’s a credit card, mortgage or car loan, Adams says. “You can get this coverage by having enough regular disability or life insurance and avoid this duplicate coverage,” she says.

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View all Courses True, many homeowners who don’t have a large enough down payment are required to buy private mortgage insurance and pay it monthly until the loan balance reaches 78 percent of the original value of the home. But otherwise, these types of credit insurance are only good deals for the insurer. For instance, credit card insurance, which kicks in if you have trouble making your payments due to, say, job loss, won’t pay off the entire debt on your credit card – it will just make your monthly minimum payment for you. And some people say it’s challenging to get credit card issuers to actually make those payments.

Credit card fraud insurance. People who worry about credit card theft and are fearful that they’ll be on the hook for thousands of dollars of fraudulent purchases tend to purchase this. But the odds that you’d have to pay in this scenario are virtually nonexistent. “It’s typically overkill,” Adams says. “Your maximum liability is limited to $50.” This applies to all credit cards.

Life insurance for a child. Some people buy these policies in case the unthinkable happens to their child, figuring at least there will be money for a funeral. But your child would be far better off if you had a brighter outlook and put that money into a college savings account.

Look at it this way: Insurance exists to help you replace or recover what you’ve lost. The more expensive that loss is, the more likely you need insurance. That’s why homeowners, auto, health and life insurance are so important, and things like an extended warranty on an appliance are a waste of money.

But life insurance for the loss of a child? No insurance policy will help you recover from that.

Why Retirees Don’t Switch Medicare Part D Plans, But Should

Thursday, April 16th, 2015

Medicare Part D prescription drug plans are allowed to change their premiums, covered medications and preferred pharmacies each year, and many plans do. Plan participants are invited to switch plans once a year during the open enrollment period, but few Medicare beneficiaries actually pick a new plan. Here’s why retirees are reluctant to change Medicare Part D plans and what might motivate them to do it.

The cost of the plan. Most Medicare beneficiaries consider the premiums and deductibles when initially selecting a Part D plan, but they don’t continue to shop around for the lowest cost plan each year, according to recent findings from a series of focus groups with Medicare beneficiaries in Baltimore, Seattle, Memphis, Tennessee, and Tampa, Florida, conducted by the Kaiser Family Foundation and PerryUndem Research and Communication. Seniors in the focus groups said they tolerated and expected their premiums and copays to rise and would only start looking for a new plan if the price increase reached around $75 more a month. “People sign up for their plan maybe when they first come on Medicare, and they stay on their plan unless premiums really jump through the roof,” says Tricia Neuman, senior vice president of the Kaiser Family Foundation. “It takes a big deal for people to make a change and insurers know that, so they can kind of raise their premiums, but not so much, if they want to keep people in their plan.”

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View all Courses Covered medications. Medicare Part D plans have lists of covered medications called the formulary, which are tweaked from year to year. Seniors who need medications that aren’t on their plan’s formulary are often willing to try a number of workarounds including an alternative drug or a generic version that is covered, medication samples from a doctor’s office, applying for discounts from drug manufacturers, appealing the insurer’s decision not to cover the drug and ordering medications online, KFF found. However, some seniors say they would be motivated to change insurers if their plan stops covering a necessary drug, significantly increases the out-of-pocket cost or makes it difficult to obtain the medication due to preauthorization requirements or other restrictions.

Resisting change. Changing Part D plans can disrupt your health care routine. Many seniors don’t want to risk upsetting their established method of getting medication and fear they could be even worse off with a new plan. Some seniors choose a Part D plan with the same insurance company that provided their employer-sponsored insurance before signing up for Medicare.

Access to specific pharmacies. Many retirees say it is important to them to have access to a pharmacy familiar to them or close to home. Some seniors also have a relationship with a specific pharmacist they don’t want to give up.

The plan’s brand name. A prescription drug plan’s brand name matters to some Medicare beneficiaries. Retirees told KFF they felt reluctant to select a Part D plan from a company they had never heard of, even if that plan offered better benefits at a lower cost. Many retirees had both good and bad associations with large organizations, including AARP, Blue Cross Blue Shield, United Healthcare and Aetna, that influenced their plan choices.

Personal service. Many seniors said good customer service, especially in person, would make them more likely to choose a specific insurance provider​​, while poor customer service early on would make them more likely to switch. “Many seniors relied upon insurance agents to help them pick a plan, and the idea of having this in-person help was so appealing to seniors that oftentimes after the focus groups we would find that seniors were providing their insurance agent’s contact information to other seniors that wanted it,” says Gretchen Jacobson, associate director of the Program on Medicare Policy at the Kaiser Family Foundation.

Coordinating with a spouse. Married beneficiaries often prefer to have the same Part D plan or same insurer as their spouse. Retirees said it was more convenient to keep track of the rules for a single plan instead of two, even when separate plans might better cater to their individual health needs. “One woman in our focus group explained that it’s much easier for her if her husband is in the same Part D plan because when she went to the pharmacy to pick up their medications she knew what her plan covered and how much it would cost for medications,” Jacobson says. “She just could not imagine having two sets of rules for two different plans.”

Star ratings. Medicare ranks its prescription drug plans based on quality, with five stars being the best possible rating. But most seniors admitted that they didn’t know about the quality ratings. “Seniors said that their own experience with the plan was more important to them than the plan’s quality rating,” Jacobson says. You can check out the star ratings of plans in your area using’s plan finder tool.

Too many choices. Retirees claim to want a variety of Part D plan choices, but they also seem overwhelmed by the number of options they need to sort through. “People make worse decisions when there are lots of options, and this is especially true when the things people are deciding about are multidimensional and complicated, as for example, choice of a prescription drug plan or a health insurance plan,” says Barry Schwartz, a psychology professor at Swarthmore College and author of “The Paradox of Choice.” “People made suboptimal choices of prescription drug plans, and the more plans they were given to choose among, the more likely it was that they were going to choose a suboptimal plan.”

Repetitive research. Many retirees spent a significant amount of time initially choosing a Medicare Part D plan, and they are reluctant to invest that much time again. Medicare beneficiaries said they would need to be significantly frustrated with their current plan in order to put in the effort to switch. “Seniors said that they found it very difficult to change plans and to choose plans,” Jacobson says. “They liked having many options, but the process of choosing plans they found frustrating, confusing and exhausting.”

Upheaval in How Money Flows Leaves Hospitals Scrambling

Thursday, April 16th, 2015

I frequently write about how you can stay young in face of events you can’t control. Today, that focuses on the changes in the health care system that are and would occur due to cost pressures and transparency so big that even President Obama and the Patient Protection and Affordable Care Act (aka Obamacare) can’t make it easy for you.

That’s why his statements (“If you like your doctor, you can keep your doctor; if you like your health plan, you can keep your health plan”) have proven to be false for so many. Even in the most powerful executive office in the U.S., Obama couldn’t ensure that. But the errors in his statements simply reflect that the changes American medicine is undergoing are bigger than Obamacare — and were occurring without Obamacare. Yes. Obamacare is shaping them, and maybe accelerating them, but these changes alter what you need to do to get care.

Let’s look at this from how the most major payers of health care costs are responding — the insurance companies and the U.S. government (through Medicare, Medicaid and payment for insurance for government employees) is responding. How is that changing your doctors’ and hospitals’ income statements? And then, what can you as an individual do for you and yours until these changes shake out? While finances often seem boring, it’s probably causing your local hospital trustees’ blood to boil, and we’ll try to make it that exciting for you, too.

Payment Rates at 18% to 38% of Bills

Hospitals are seeing lower reimbursements now due to declining admissions — and greater transparency and lower payment rates. I’ll take the hypothetical example of a for-profit system, although the exact same logic goes in spades for a not-for profit academic system. This hypothetical but realistic hospital system currently bills about $3 billion for medical services and collects around $1 billion. That’s right — the institution, through insurance contracts and payment of fractions of bills by the government, gets 33 cents for every dollar it bills. It costs such a system around $900 million to provide all the services, and thus they are able to have a profit and invest $100 million in plant and equipment maintenance, as well as new equipment. And this hospital system was exceptional, as many community hospitals function on margins below this 10 percent figure — like 5 percent.

A system like this one gets this revenue by collecting about 23 cents on the dollar billed from Medicare, about 18 cents on the dollar billed from Medicaid and about 38 cents on the dollar billed for the aggregate of commercially insured patients. We are sure this seems bizarre to someone from outside the U.S., and actually it does to us, too, but it’s the way the system has evolved.

But now, insurance exchanges are helping more people chose policies that pay Medicaid rates — nearer 18 cents for each dollar billed — and it isn’t just the uninsured that are choosing these policies, but those who work for small companies that do not cover health insurance for their employees. Eight million people have chosen these policies so far. That is increasing outpatient demand and reducing reimbursements — going from a policy that paid 38 cents to one that pays 18 cents per dollar billed seems (from what I can learn from friends) to be hitting many hospitals and even academic health systems hard. That’s right, being paid 20 cents less on each dollar billed on just 20 percent of the $3 billion you bill reduces our hospital system’s income from $1 billion to $880 million, or a net loss of $20 million versus a profit of $100 million (remember it cost $900 million to provide the care the hospital provided). What would you do if you ran that hospital system? You’d cut every non-essential service you could, and darn fast. Your grass would get cut less often. And those decreases mean less money for everyone selling services to that hospital

More Pressure from Reference Pricing

Now couple that with reference pricing: An article in Health Affairs indicates that in California, the Calpers system — the largest state-run health insurance provider — has gone to reference pricing in some areas. Calpers gives employees $30,000 for a total hip or total knee replacement and lists the hospitals that charge less than that. Virtually all academic medical centers (those that provide care for the sickest, and those that train our future doctors, nurses, pharmacists, dietitians, etc.) fall into the high-cost group, and their share of the Calpers patient population that has hip or knee replacements went to 35 percent from 54, while the share for low-cost hospitals has climbed to 65 from 46 percent in less than two years. (Only one high-priced group hospital in California converted to a low-cost group hospital in the past three years. These trends have accelerated since 2012, we are told.)

Many other states will soon adopt reference pricing, where you’ll be guided to hospitals that charge less for a service (and maybe try to not take patients with conditions that increase cost). This means there will be less dollars for the hospitals that have taken the sickest patients to continue to do so in transfer from the lower priced hospitals, as well as less dollars to train doctors. And doctors are seeing less revenue as more of their patients are paid for at or near the Medicaid rate of 18 cents per dollar billed, versus the private or even Medicare rates of 38 and 23 cents on the dollar billed. So it’s not just the for-profit hospitals that are seeing less revenue, but all health providers.

How long will the pain last for the hospitals and health service providers till we remodel the system so all practitioners practice at the limit of their license and only the sickest get nursing or physician care? We don’t know how this will settle out. This change was tried twice in the U.S. and once in several Canadian provinces in my job lifetime, but each time political pressure — “I want a great neurosurgeon when I want one, not when my back pain has lasted 10 weeks” — forced reversion to something close to the prior system. But this time seems different. And for you to avoid a shortage of providers or find out that your doctor has dropped out of accepting your specific insurance here are four tips: •Hug your doctor and your doctor’s office manager, and do whatever you need to make sure your doctor is willing to make an exception for you and yours to be covered by her — even if she takes no one else from that network.
•Hug your company HR director and CEO, and hope they provide insurance coverage and a plan that allows you to keep your doctor. It isn’t the ACA or Obamacare that changed this; it is your company or its insurance plan. Also hope that they’ll include the academic center nearest you — in case you or yours need complex care. And tell these folks how much your company’s health insurance plan means to you and your productivity.
•Get preventive care now. Do whatever you can to avoid toxins such as tobacco, secondhand smoke and the five food felons and learn to love physical activity and manage stress.
•Take your do-over, and stay as well as you can for three to five years until this all shakes out.

Medicare Announces Plan to Reward Quality Over Volume

Thursday, April 16th, 2015

WASHINGTON — The Obama administration Monday announced a plan to shift Medicare payments it makes to hospitals and doctors so they reward quality over volume. Officials said they hoped the move would be a catalyst for the entire health-care system.

“It is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people,” Health and Human Services Secretary Sylvia M. Burwell said in a statement. A broad cross-section of health-care industry representatives attended the announcement, including insurers, hospitals, and doctors, as well as employers, who pay for coverage for most workers and their families. The ultimate goal is to reward quality care, and not just the sheer volume of services like imaging scans.

Medicare and employers are already moving in that direction, but the outlook for the administration’s initiative remains unclear. Despite a slowdown in spending over the last few years, Medicare continues to grapple with longstanding financing problems, including a budget formula that will cut doctor payments by 21 percent in April unless Congress acts.

Rising Expectations

But Burwell says it’s time to take a longer-term view. Building on experiments under the president’s health care law, she set a goal of tying 30 percent of payments under traditional Medicare to new models of care by the end of 2016. That would rise to 50 percent of payments two years thereafter.

Those new models include so-called accountable care organizations, in which doctors coordinate care to help keep patients from landing in the hospital for avoidable problems. HHS also set a goal of tying 85 percent of all payments under traditional Medicare to measures of quality or value by the end of 2016. That would rise to 90 percent two years thereafter.

Costing about $600 billion a year, Medicare is the government’s flagship health insurance program, serving seniors and disabled people. About 55 million people are covered, with services financed through payroll taxes on workers as well as beneficiary premiums. Roughly 7 out of 10 beneficiaries are in the traditional program, while the rest are covered through private insurance plans offered under Medicare’s umbrella.

The $2.9 trillion-a-year U.S. health care system remains at the forefront of scientific innovation globally. But there is widespread agreement that health care is costing the nation too much. Many people get treatments and tests that either don’t help them or have problematic side effects. The price of new drugs is a perennial issue for insurers, as well as for federal and state governments. And fraudsters take a cut of the health care dollar that’s estimated to run into the tens of billions of dollars annually.

5 Simple Ways to Save on Your Health Care Costs

Thursday, April 16th, 2015

Mention the term health care and you’re likely to get a variety of responses. Regardless of your political leanings, one thing is for certain -– health care is an expensive necessity in today’s economic climate.

According to Statistic Brain, we spend about $10,000 per person on health care costs every year. The good news is that there are ways to reduce those costs if we are purposeful about it. Cutting costs becomes even more important considering smart spending now, on preventative measures, for example, can cut costs down the road, too. Here are some ideas for keeping your own health care costs down:

1. Take Advantage of Tax Savings

One of the best ways to save on health care costs comes in the form of a flexible spending account or a health savings account. Both are tax-advantaged accounts that allow you to put aside funds for health care needs. In many cases, your employer may offer matching funds, up to a certain amount. Ultimately, using either the FSA or HSA should reduce your taxes and help you think more like a consumer when it comes to your health care spending.

2. Try Cheaper Facilities

Many people don’t realize that a fair number of doctors operate at several facilities. The fee to see your doctor will stay the same regardless of where you see him, but the charge assessed by the facility can vary quite a bit. If that’s not an option for you, consider other ways to see a doctor. Many grocery stores offer in-store clinics manned by a doctor or nurse. Assuming you’re needing to see a doctor for something relatively common, this method can be a great way to save money.

3. Get a Prescription for Over-the-Counter Drugs

One drawback to the FSA or HSA is that you can no longer use the funds to purchase over-the-counter drugs. A way around this is to get a prescription from your doctor for medicines that you regularly use, like pain relievers and allergy medication. Just remember to ask for the prescription to be similar to what you’re currently taking to avoid any negative impacts.

4. Get Free Money

With the advent of more high-deductible health plans, more employers are offering incentives to employees that can result in free money for you. This varies by employer, of course, but usually is in the form of taking a health care assessment in exchange for a certain amount to be put in your HSA.
Some employers also offer free or low-cost weight loss or smoking cessation programs. These programs help your employer save on their costs plus giving you the chance to get in better health.

5. Get a Cash Discount

If you’ve dealt with health insurance much, then you know what a hassle it can be. It can be the same, if not worse, for a doctor’s office. Help reduce the hassle by offering to pay cash — for a discount off your insurance’s agreed-upon rate. Not every doctor will offer this but it is well worth asking for, especially if you’ve not met your deductible yet for the year. If this isn’t an option, consider asking for a discount for paying for the entire bill all at once. Again, this may not always work, but can be well worth a simple request.

How to Pick the Best Medigap Policy for You

Thursday, April 16th, 2015

More than 10,000 people enroll in Medicare each day, according to the National Council on Aging. If you are getting ready to join these ranks, you may find yourself in the market for a plan to pay costs not covered by original Medicare. Here are five steps to help you find the right plan for your needs.

1. Decide If You Want Medigap or Medicare Advantage

First, know that Medicare alone will not cover all your health care costs. “Original Medicare pays about 80 percent,” says Jane Kassel, owner of insurance brokerage firm Kassel Benefits in Phoenix.

The remaining 20 percent includes Medicare Part A and Part B deductibles and coinsurance, such as copays for office visits. In some cases, Medicare beneficiaries may have to pay excess charges when a health care provider charges more than the amount approved by Medicare. Original Medicare also does not pay for certain services such as prescription drugs, dental and health care costs incurred abroad. While beneficiaries could pay these costs out-of-pocket, consumers can cover some expenses through the purchase of a Medigap or Medicare Advantage plan.

Medicare Advantage, also known as Part C, allows Medicare beneficiaries to purchase bundled coverage from a private health insurance company. These plans include all the coverage provided by original Medicare plus additional benefits such as prescription drug and dental coverage. Kassel says the biggest downside to Medicare Advantage plans is that they may have a limited network of providers and typically do not provide out-of-state coverage. They may also come with their own deductibles and coinsurance requirements.

Those who want to avoid provider restrictions may want to consider a Medigap policy, also known as a Medicare supplement. These policies cover expenses anywhere Medicare is accepted and may provide what Ross Blair, vice president of, calls “bumper to bumper coverage” that results in little to no money spent out-of-pocket for health care costs.

“The trade-off is higher premiums,” Blair says. “In some states, you could pay up to $300 to $350 per month.” In addition, Medigap policyholders need to purchase a separate Part D plan for prescription drug coverage, which is included in most Medicare Advantage plans. Medigap plans also do not include dental coverage.

2. Know Your Medigap Plan Choices

For those who decide they want a Medigap plan, the next step is to become familiar with the options. “The great thing about Medigap plans is that they are standard benefit design,” says Kris Schneider, vice president of insurance product and carrier management at Aon Hewitt.

Standard benefit design means Medigap policies offer a uniform set of benefits. The policies are lettered from A to N, with each letter representing a different set of benefits. Since Medigap plans are regulated at the state level, not every plan is available in all states. In addition, Massachusetts, Minnesota and Wisconsin have nonstandardized plans.

Of the standardized plans, Plan A offers the most basic coverage, paying Medicare Part A and Part B coinsurance costs as well as up to 3 pints of transfused blood. Plan F is considered the most comprehensive, covering coinsurance, blood, deductibles, skilled nursing in facility care, foreign travel and Part B excess charges. “Plan F is the only plan that covers everything,” Kassel says.

Other plans offer various combinations of the benefits covered by Plan F. Furthermore, all plans except Plan K and Plan L have no out-of-pocket limit. (The limit for Plan K is $4,940, and the limit for Plan L is $2,470.)

3. Narrow Your Options

“Medicare consumers have to be very thoughtful about their medical costs,” Schneider says. “[They need to consider] what are their costs now and what they will be in the future.” Schneider suggests Medicare-eligible individuals consider all the following when weighing their options. •Personal preference.
•Risk tolerance.
•Ability to pay.
•Lifestyle and travel.
“It is also important to ask about rate stability,” Schneider says. Looking at historical rate changes is one way to gauge stability. Blair suggests consumers also find out which of the following rating mechanisms are used for the policy they are considering. •Community rated. Plans that are community rated do not use age as a factor when calculating premiums. Everyone enrolled in the plan, regardless of age, pays the same amount.
•Issue-age rated. The premiums for these plans are based upon an individual’s age at the time he or she purchases the policy.
•Attained-age rated. These policies have premiums that will adjust every year based on an individual’s age.
According to Blair, community-rated plans may cost more upfront, but then rates tend to remain stable. Attained-age plans, which Blair likens to variable-rate mortgages, start out inexpensive, but rates increase rapidly as you age.

4. Sign Up Early and Keep Your Plan for the Long Run

While Medigap policies can be purchased at any time, Kassel says beneficiaries can save a significant amount of money by enrolling within their initial enrollment period for Medicare. Most people will become eligible for Medicare at age 65; people with disabilities may be able to enroll earlier. For those who become eligible at age 65, the initial enrollment period runs from three months before their birthday month until three months after it.

“If purchased within six months, [Medigap policies] are guaranteed issue with no underwriting,” Kassel says. “That six-month window is really critical.”

Missing the window could drive prices up by 30 percent or more, she adds. That sizable discount for enrolling without underwriting is another reason consumers should carefully consider their policy choices and pick one based on their current and future needs. “[Medigap policies] are guaranteed renewable so long as a consumer pays their premiums,” Schneider says.

However, once a Medigap policy lapses, Medicare beneficiaries have to go through underwriting to get a new one, a process that could significantly add to premium prices. Kassel likens Medigap to life insurance in that it’s best to buy it while you’re younger and healthier, so you can lock in lower rates for the long run.

5. Enlist Expert Help

Both Blair and Kassel say there is no reason for consumers to go at it alone when selecting a Medigap plan. They note there is no charge to use a broker, which means premiums will be the same whether a consumer purchases through a third party or direct from an insurance company.

Blair, whose company maintains a hotline to connect consumers with licensed agents, says individuals should be wary of captive agents who work for a specific company. “Find someone you trust,” he advises. “Agents should ask lots of questions and offer plenty of options.”

Kassel adds that, by law, Medigap policies cannot solicit business. That means that while Medicare Advantage brochures may fill your mailbox, you’ll likely never see one for a Medigap plan. As a result, if you want help, you need to reach out to a broker or insurance company, since they cannot initiate contact with you about the policies.

Is your health plan at work any good?

Wednesday, October 10th, 2012

Do you get your health insurance through work? Do you think it’s any good?

The Kaiser Family Foundation and Health Research & Educational Trust recently released its 2012 Employer Health Benefits survey. The study findings can help you judge whether your own health plan is better or worse than the average nationwide.

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The survey found:

Average group health insurance premiums will rise about $700 or 4.5 percent for family coverage and about $190 or 3.4 percent for single coverage in 2013. That’s based on an average annual premium of $15,475 for family coverage and $5,615 for single coverage. The increase is modest compared to recent years.
On average, workers contribute about 18 percent of the premium for single coverage and 28 percent of the premium for family coverage.
Copays average $33 for in-network primary care doctors and $33 for visits with in-network specialists.
Emergency room visits on average cost $118. (The cost may be waived by some plans.)
Most workers on average pay $10 for generic drugs and $29 for brand-name medications. Workers also pay about $51 for non-preferred brands and $79 for specialty drugs. With most plans, the cost of your prescription drugs doesn’t count toward your annual deductible.
About a third of workers have an annual medical insurance deductible of at least $1,000. About 14 percent of workers face deductibles of at least $2,000 a year. The deductible is how much you must pay out-of-pocket before all or most of services are reimbursed by your health insurance plan.
Is your same-sex or unmarried partner eligible for benefits? The answer is yes at about a third of employers — a slight increase from recent years.
The average copayment for a hospital stay is $263.
The average copayment for an outpatient procedure is $127.
FSAs for medical expenses
If your employer offers a flexible spending account (FSA) you can use pre-tax dollars for your out-of-pocket medical expenses.

The survey found only about 17 percent of small firms that employ less than 199 workers offer FSAs, but more than three-quarters of larger firms do. That is about the same percentage as the last time the survey asked employers about FSAs.

The survey also found that more employers offer their employees the opportunity to complete health risk assessments. The results can be used to change behaviors, such as smoking or overeating, which can cause health problems. Nearly 40 percent of large firms ask employees to complete a health risk assessment. Among those that do, more than 60 percent offer financial incentives for doing so, the survey found. An assessment can result in a reduction in premiums.

More employers are nudging workers to become healthy by offering weight-loss programs, gym membership discounts, on-site exercise facilities, smoking cessation programs and classes in nutrition.

Comparing your health insurance plan
Before you compare your own plan to the survey results, consider that the numbers are national averages.

“And averages don’t tell the full story,” says Robert Zirkelbach, spokesperson for America’s Health Insurance Plans. “Costs are different in different parts of the country,” he says. “Costs also can vary within the same community.”

Sabrina Collette, a research professor at the Health Policy Institute at Georgetown University, says determining whether your health plan is a good one isn’t just about how it compares to the national averages. It’s about how it works for you.

Even if your plan requires you to pay more for doctor’s visits or prescription drugs or hospital stays, it could be the best health insurance for your needs, she says.

If you are healthy and don’t go to the doctor very often, you may not mind paying more when you do use those services, especially if your monthly premiums are lower.

Access to care
On the other hand, if you have a chronic condition, or if you need surgery or are hospitalized, your copays and deductibles are going to be more important to you than the amount you pay in premiums, Collette says.

“What’s important to you depends on your unique circumstances and the health needs of . . . your family members who are covered by the plan,” Collette says.

Zirkelbach says the best health insurance plans aren’t necessarily about cost but about access to care. Are the doctors you want to see in your plan’s network? A poor plan will limit your choices.’s best health insurance companies survey has customer satisfaction ratings for large carriers.

More from Beth Orenstein here

Health insurance in 2014: Where will you buy a health plan?

Wednesday, October 10th, 2012

Starting in 2014, the federal government will require you to have health insurance. That’s when the individual mandate goes into effect under the Affordable Care Act.

Upheld by the U.S. Supreme Court in June, the mandate requires everyone (with a bunch of exceptions) to have health insurance, whether it’s through an employer-sponsored plan, government-funded health insurance program, such as Medicare or Medicaid, or a private individual policy.

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Worried about where you’ll find a health plan? Here’s where to look in 2014:

State health insurance exchanges
The Affordable Care Act requires states to set up competitive health insurance marketplaces called exchanges. The federal government will set up the exchanges in states that don’t set up their own. (See How health insurance exchanges will work.)

The exchanges will offer websites where you can compare health insurance plans and prices and buy coverage online. You’ll also be able to see whether you qualify for government-funded insurance programs or government subsidies to help you afford health insurance premiums.

“It’s a pretty impressive platform to set up,” says Dan Maynard, president of Connecture Inc., a Milwaukee area-based software company that’s designing the online-sales systems for exchanges in Maryland and Minnesota.

The websites will include self-service tools to guide you through the process of enrolling in government programs, if you’re eligible, or choosing a private health plan based on your needs.

In most cases exchanges will include call centers, where you can phone for help in choosing and enrolling in a plan, Maynard says. All exchanges will work with so-called “navigators.” These are groups and professionals in the community who can help you enroll in a health insurance plan through a state exchange. Insurance brokers, consumer advocates and non-profit groups could serve as navigators, and some state exchanges might have community outreach centers.

“Each state is going to approach it a little differently,” Maynard says.

Health insurance companies and brokers
An estimated 30 million Americans are uninsured now. That’s a lot of folks to hit the insurance market all at once, especially as new regulations go into effect, such as premium subsidies for people who meet certain low- and moderate-income requirements.

“Not everybody speaks insurance-ese,” says Carol Taylor, director of compliance and government affairs at Beacon Benefit Consulting in Jacksonville and Orlando, Fla. “It’s going to be very, very complex. Agents are still going to have a consultative role.”

Even though consumers will be able to shop for themselves through the exchanges, many will want some personal help from an insurance agent to sort through the options, she says.

Aetna, one of the largest health insurers, remains committed to brokers and will offer incentive programs to build stronger relationships, and develop new technology to make it easier for brokers to work with the carrier, says Barbara DeMaio, head of individual business for Aetna.

Health insurance companies will also sell plans directly to consumers through their own websites and call centers.

DeMaio says Aetna expects that most of its business will continue to come through brokers and directly to the company in 2014. Sales through state exchanges will grow as the new marketplaces get established.

Health insurance retail stores
Some health insurance companies are opening retail stores where you can shop for a policy, check on claims and get one-on-one health education coaching:

Highmark Blue Cross Blue Shield just opened its newest Highmark Direct store in Erie, Penn., the company’s ninth retail outlet in the state
Blue Cross and Blue Shield of Florida has opened 10 Florida Blue Centers in the state.
Last year, UnitedHealthcare opened a 16,000-square-foot center in New York, which the company says will serve as a model for future centers. The insurer operates several other smaller stores.
Aetna continues to market high-deductible health plans through Costco, the members-only warehouse retailer, in nine states. Costco employees provide brochures that describe the health insurance program, and Costco members can go online or call to sign up for a plan. Aetna plans to expand this program to other states.
Private insurance exchanges
Besides the state-sponsored exchanges, a variety of private exchanges will serve as marketplaces where you can compare health plans and buy coverage.

Private exchanges have been around for decades. Nonprofits or companies, rather than the state or federal governments, own and run private exchanges. Some private exchanges feature plans from a single health insurer. Others let you compare plans from competing health insurance companies. In some cases your employer might contribute a certain amount of money for you to purchase insurance and then send you to a private exchange to pick out a plan.

Why have private exchanges when state-run exchanges will open in 2014? The private exchanges give health insurers another channel to market their products. In Massachusetts, where a government-run exchange has operated since the state reformed its health care system, health insurers have continued to market to groups and individuals through privately run exchanges.

Meanwhile, no matter where they’re sold, all health plans will have to live up to minimum standards of coverage set by the Affordable Care Act. That means you will qualify for coverage even if you have a health condition, and plans must provide certain benefits.

More from Barbara Marquand here

How Medigap plans are priced — and how to save on yours

Wednesday, October 10th, 2012

Medicare users can buy a supplemental health insurance plan, called Medigap, to cover some of the costs that Original Medicare does not cover, such as co-payments, deductibles and co-insurance.

There are 11 standardized Medicare supplement plans. However, not all 11 are available in every state. Massachusetts, Minnesota and Wisconsin have their own plans with different names.

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It is important to shop around, since insurance companies may charge different prices for identical plans, says Lucas Burton of Golden Age Providers in Largo, Fla. “Everyone is selling the same thing though their prices may vary.”

Companies that offer Medicare supplement policies use three different methods to price them:

Attained age. These policies should have the lowest premium if you enroll at age 65. However, the premiums will increase as you get older, typically every year, every three years or every five years. The premium increases are in addition to any rate hikes by Medicare when it adjusts for inflation. With attained age policies, the premiums are likely to be at their highest when you’re in your 80s and 90s and least able to afford them, Burton says.
Issue age. The premiums for these policies are based on your age when you buy them and will not increase as you get older. They still may increase, though, as Medicare adjusts for inflation.
Community-rated. With these policies, everyone in the same geographic area pays the same premium no matter their age. “Very few carriers do community-rated anymore,” says Cheryl Matheis, senior vice president of health strategy for AARP.
How much will you pay for Medigap?
How much you pay for your Medicare supplement insurance will depend on:

Where you live.
Which of the Medicare supplement plans you choose.
How old you are when you enroll.
What type of plan you buy (attained age, issue age or community-rated).
There are ways to keep your premiums low but still get the coverage you need. Choose a plan when you’re first eligible for Medicare. “That’s when you will have the broadest choice,” Matheis says.

If you choose a plan when you’re first eligible, you can’t be turned down for having any pre-existing health conditions, she notes. If you buy at a younger age and choose an issue-age-rated policy, your premiums can’t go up just because you get older. Issue-age rated policies are a bit more expensive at the start, but are generally worth it if you live into your 80s and 90s, Burton says.

How much Medigap do you need?
Supplemental plans that offer the most robust coverage will cost more. If you choose a plan that doesn’t have co-pays, you’ll make up for it in higher premiums. You have to decide whether you want to pay for your health insurance upfront in premiums or at point-of-service, Matheis says.

Think about how often you visit the doctor and how likely you are to need health-care services during the year. Some plans have lower monthly premiums but cover less of your co-insurance and co-pays than others.

For example, Medicare supplement “Plan K” offers a lower monthly premium than “Plan L,” but it has a higher co-insurance amount and a higher out-of-pocket limit.

Using insurance brokers
An insurance broker who represents multiple companies will be best able to help you find the most suitable plan at the best price, Burton says. Also, your broker will be able to help you review your choices year to year. If your health or circumstances change, you may want to switch plans and you may be able to pay lower premiums.

Use the Internet to investigate plans and pricing. Many seniors are technologically savvy. If you don’t have access to a computer or the Internet, you can go to a library or a center that assists seniors. You also may be able to ask your children or grandchildren to help you do research online.

Getting Medicare supplement quotes online
Burton suggests shopping online because if you invite sales people to your home, “you’re going to get 10 different people telling you 10 different opinions, and telling you whatever they’re selling is the best.” When you shop for Medicare supplement quotes online, you generally have many options and can compare insurance quotes from multiple carriers.

More from Beth Orenstein here

How to avoid a health insurance claim denial — and what to do when you can’t

Wednesday, October 10th, 2012

Everyone has to visit the doctor sooner or later, and these trips don’t come at a small cost. That’s why you have health insurance. What happens when you know you need care and your insurance company says you don’t? Most people are taken by surprise when one of their health insurance claims is denied.

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Sample letters of appeal

For help in writing an appeal for a denial based on the grounds that the procedure or care was not medically necessary, see:
* Sample appeal letter

If the first appeal is denied, follow-up with:
* Second-level of appeal letter

Some denials are a consequence of actions within your control. For example, health plans often deny or return pre-authorization requests because of missing data. You can avoid this by ensuring that your pre-authorization requests include accurate patient information. Ask your doctor to check diagnosis and procedure (ICD9) codes for accuracy.

Good documentation can also help you avoid denials. While it may seem paranoid, write down the name of every person you talk to in reference to your health insurance problems and keep backups of all correspondence and paperwork. This documentation can be invaluable if an insurer denies your claim.

Additionally, it is important to know the health plan’s requirements. Many patients do not read the handbooks their health plans provide, so they’re unfamiliar with the plans’ requirements. Consequently, many appeals stem from ignorance. Make sure the treatment you are planning on receiving is covered under your insurance before treatment is received.

What to do if your claim is denied
Enlist your doctor’s help in making your case. Most plans grant or deny treatment based on whether medical intervention is necessary for your well-being and whether the treatment you seek is appropriate for your health condition. Ask your doctor to contact the plan’s decision maker — usually the plan’s medical director.

When an appeal is necessary
More on how to appeal a health insurance claim denial

Claim denials: Sometimes following the rules is not enough

How to make claims under a self-insured health plan

The Kaiser Family Foundation offers a detailed Consumer Guide to Handling Disputes with Your Private or Employer Health Plan

Every plan should have a clear appeals process that you must follow to the letter. You may only have a limited time from the date you had the procedure to get an appeal under way, possibly only 60 days. Depending on your plan’s procedure, you may have to start with a phone complaint, then move to a written appeal.

There are two methods of appeal: internal and external. The internal appeal is to the insurer itself; an external appeal is to your state department of insurance or other governing body.

Internal and external appeals
The internal appeal is the first step of the appeal process. Here, you request more information and ask the insurer to reconsider its decision. External appeals are filed when internal appeals have been exhausted and the insurer won’t reconsider your case. Many states have implemented laws governing external appeals that in certain cases give you the right to a review by an independent board of qualified experts. If the appeal is determined in your favor, your insurance company cannot deny your claim.

Information your insurer should provide to you when denying your claim:
A statement of specific medical and scientific reason for denial.
A statement identifying the provision that excludes treatment.
The name, state of licensing, medical license number, and title of the person making the denial decision.
A description of alternative treatment, services, or supplies that are covered, if any.
Instructions for initiating internal appeals of denial, including whether your appeal has to be in writing, time limits, schedules for filing, and the name and phone number of a contact person.
Instructions for filing an external request for review if the denial is upheld in the internal review.
If you do not receive this information from the insurer, ask for it in writing.

Source: State departments of insurance

Sometimes these reviews are called grievances and sometimes appeals, depending on the state and the type of issue involved. Most states that have passed these laws give a patient the right only to obtain a review of the original decision by persons associated with the health plan, although an increasing number of states have also passed laws that guarantee a patient’s right to appeal certain decisions to independent review organizations or government agencies that are not affiliated with the patient’s health plan.

In addition, not all health plans are subject to the laws of the states in which they operate. If your plan is self-insured (meaning the employer pays 100 percent of the claims), it is not subject to state laws. If your plan isn’t self-insured, contact the department of insurance in your state to determine what laws apply.

When appealing your denial, it is important that you find the correct person to whom you should send your appeal letter. If you’re not sure, call your health plan administrator and ask for the name and address of the appropriate person. Also, send all letters by certified mail so you have a record of having sent the letter and a receipt that it was received.

What affects your appeals process?
The National Committee for Quality Assurance (NCQA) requires that physicians review any denial and that health plans provide the right to independent external appeals for those insurers seeking NCQA accreditation. Additionally, there are state and federal mandates of which you should be aware:

Federal mandates

For federal insurance programs, all executive agencies are required to implement grievance and appeal procedures recommended by the President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry.
Managed care plans that contract with Medicare must follow grievance and appeal procedures as part of their Medicare contracts.
State regulations

It is important that you find the correct person to whom you should send your appeal letter.
In many states, a health care professional with appropriate expertise is required to participate in the appeals process. Some states limit the authority of anyone but a licensed physician to deny claims.
Laws in some states specify a role for physicians, recognizing that they may appeal a claim on behalf of a patient.
Many states protect a physician’s right to advocate for medically appropriate care by prohibiting plans from punishing doctors who do so.
Some states sponsor patient-assistant groups to help consumers with their appeals.