June 14th 2010

Employer health insurance plans get a boost

The world is often a confusing place and nowhere is the confusion likely to be so complete as in the tax system. Here we have the best brains in the Government taking on the best brains in the private sector. The Government wants the maximum tax take. The private sector wants to arrange things so that no one with money ever has to pay any tax. Somewhere in the middle the two world-views collide and, usually, some tax is paid. Anyway, when President Obama signed the healthcare reform bill into law, some of the largest employers in the US let out a collective sigh of pain. As an example, Caterpillar is the world’s largest manufacturer of excavators and bulldozers. The day after the President’s signature, Caterpillar announced it was taking a charge of $100 million to earnings over an expected loss of tax benefits. A number of other influential corporations have also made allowances in their accounts. The reason is that the healthcare reform ended a tax break given to cover the cost of supplying drugs to early retirees.

Let’s take this step by step. If a person continues to work, he or she will be covered under the employer’s plan. All other things being equal, working up until you are entitled to Medicare gives continuity of coverage. But there was always a problem if someone took early retirement. Health insurance companies were reluctant to insure older people who might more quickly develop serious medical problems. So, to give people aged between 55 and 64 a bridge until they became eligible for Medicare, employers were given a tax break to enable them to pay for their ex-employees’ drugs. With the disappearance of the tax break, employers were therefore left with an obligation to pay for drugs without any relief.

Acting through Kathleen Sebelius, Secretary to the Department of Health and Human Services, President Obama has announced a $5 billion package to offset the loss of the tax break. This will run from June 2010 to January 2014 when the individual health insurance plans offered through the new exchanges should come onto the market. It is estimated that about 4,500 private and public employers will be eligible to claim from this new fund. The intention is to provide continuity of coverage under the current health plans and it will be condition that the employers maintain their contributions, i.e. federal money is a top-up not a substitute for payment by employers. Ms Sebelius has also made it clear that the individual health plans offered to early retirees must include coverage for chronic and high-cost diseases and disorders. Employers cannot cherry pick the diseases to be covered. That means the victims of heart attacks or those diagnosed with diabetes and cancer will get continuing support under the plans if federal funding is to be drawn down.

In general, the business community has been slow in showing its gratitude. The feeling seems to be that Government made a mistake when pushing through the reform bill and was now offering a fraction of the total money required to fill in the hole. Nevertheless, the President has recognized the problem and made funds available to help offset it. Whether these funds will prove sufficient is something we will have to wait and see. For the retirees, it should mean access to benefits with fewer hassles.

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April 18th 2010

How do car insurance companies calculate the premium rates?

The business of insurance is called underwriting. The company enters into a contract (called a policy) and agrees to indemnify a group of people like you against defined losses. So it uses some heavy duty math to work out the probability of the losses being incurred. It’s called risk assessment and relies on a complicated use of statistics. For vehicle insurance, the companies collect the details from every reported traffic accident in the US looking at the age, sex and occupation of the driver, the make and model being driven, the time of day, the road conditions, and the extent of the damage. The insurers share the information on the current costs of replacement parts and the labor to fit them.

They also manage to talk the health insurance companies into sharing their current costs on medical treatment for those injured in traffic accidents. With all this information, they can make good estimates of the cost of loss, i.e. the total amount they may have to pay out if they insure, say, 100,000 drivers. They take this estimate, add the cost of running the insurance company and a profit margin. This total is then divided between all the 100,000 as their premiums. Some companies divide the total equally so the good drivers subsidize the bad. But the majority adjusts the individual amounts based on the driver’s safety record. That way, each policy holder pays more or less depending on how well he or she drives. This is more fair.

But, to cut costs, some insurance companies make more general assumptions about the likelihood of losses. Instead of personalising the risk assessment, they focus the assessment on generalities. The most common is the use of the zip code. In some areas of a town or city, there are higher levels of vehicle theft and vandalism. Some areas have more people driving while intoxicated or impaired through drugs. Because of the design of the local road system, there may also be a higher number of accidents. The insurers therefore charge everyone living in those areas a higher premium. Apart from the unfairness at an individual level, some lawyers believe it is active discrimination because many of the zip code areas loaded with higher premiums have higher concentrations of particular racial or ethnic groups. California has formally prohibited insurance companies from using zip codes, credit scores and other factors not directly relevant to the assessment of driver safety. In those states, insurers continue to trade and make a profit. It has not been the end of the world they predicted.

So, depending on the US state in which you live, your premium may either be calculated based on your personal driving record, or it may be based on your zip code and credit score. Either way, the task of finding the cheapest car insurance remains the same. You have to shop around the companies licensed to sell policies in your state and find the best deal. If there is active competition between the insurers, the premiums will be lower and you will find the cheapest car insurance without too much difficulty. But if the state is unregulated and insurers do not compete, it will be more difficult to find a cheap policy.

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March 7th 2010

Health insurance companies hike premiums

This February, the Department of Health and Human Resources has issued a report identifying an alarming trend for insurance companies to seek premium rate increases. This is not limited to one or two states. This is not limited to one or two percentage increases in the rates. This is all the leading insurance companies asking for the right to significantly higher premiums: in Michigan hikes of 56%, in California hikes of 39%, and so on. If this only affected small numbers of policyholders, it might have passed unnoticed. But, with millions of policyholders affected across the country, these rate increase requests have attracted the full scrutiny of the federal government. Secretary Sibelius has been leading the attack, using the requests to push the reform agenda forward.

Because of the national anger, some companies have paused. WellPoint had proposed the increases take effect from March 1. Any increases, even if approved by the states, will now be delayed until May at the earliest. This decision is partly in response to the summons of WellPoint’s chief executive officer to Washington to justify the requested increases. Insurance companies find themselves in a difficult political situation. Their management teams accept a duty to maximize profits for the benefit of the stockholders. They look around at an America seriously affected by the recession. Increasing numbers of people are unable to afford the premiums, some because of unemployment, others because of a squeeze on credit. More worrying from the insurance industry is that more healthy people are deciding not to insure at all. This means the group of people left holding policies has a higher percentage of those with existing health problems. Without more healthy people in the group paying premiums and not claiming, it becomes more expensive to insure those less healthy people who remain. It is also a verified fact that hospitals and healthcare service professionals have also been increasing their fees and charges. The pharmaceutical companies have increased the price of almost all the most commonly used drugs. The insurance industry is under pressure from both sides. As Secretary Sibelius points out, however, this is not a completely accurate picture. Every year, insurance companies are required to submit reports to all the US states in which they are licensed to sell policies. This data shows many companies actually increased the number of policyholders during 2009.

The market in health insurance plans is complicated by the political situation. Democrats and Republicans are two armies unable to agree a truce long enough for some reform to be made. As it stands, there is no immediate likelihood that medical costs will be controlled. If the costs continue to rise faster than inflation, insurers will have no choice other than increasing their premiums. If they do not, they will not have enough cash in hand to pay out on all the claims. This means, for the average person, it will become increasingly difficult to find cheap health insurance. For those with a pre-existing condition, group health insurance will be the only option but, for those plans, premiums are rising at their fastest rates. For years, it has been obvious that the healthcare industry is broken. It would be ironic if, having come this close to some meaningful reforms, we not only saw the reform bills lost in Washington, but also found every major insurer imposing massive premium increases. That really would be the final nail in the coffin.

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November 15th 2009

The Rising Cost of Health Insurance and the Other Options

Save on health insurance

Research has confirmed that 7 out of 10 Americans have no Dental coverage and about half of Americans have no Health Insurance. That is a staggering amount considering America’s population is growing tremendously and the percentages stay the same. Why? Because Health Insurance is outrageously high. Major health insurance companies are for-profit meaning that they are not out to help but to make money. Over the past 10 years, premiums have went up more than 200%. That is insane considering Americans have become healthier over that time period!

What do those without coverage or those who are terribly under-insured do? Some go without. Due to our declining economy people just can’t afford to go to the doctor. Sometimes, even in emergency situations, people decide that feeding their children is more important than going to the emergency room. I can honestly say this is something I understand. I have been in situations before where I put off medical care because I was scared of what my insurance would cover and what it would not and then I would be left with huge bills to pay on top of my necessities to buy.

What other options are there? As stated above, you can go without. If you had a painful cavity in your tooth and had no dental insurance, most dentist will make you pay up front before they do anything. To pull a tooth can cost anywhere from $100 to $1000 dollars. This is not including the pain medications, antibiotics, or any other medications you may be prescribed. I know for me, this is not a good option!

AmeriPlan ® Discount Dental and Medical Programs are the answer! AmeriPlan ® cuts out the middle man and takes you straight to your health care provider. With thousands of providers nationwide, including big name pharmacies, this isn’t an option to pass up! I found this out the hard way.

Before finding AmeriPlan ®, I applied for a Medical Credit Card. I thought it was the answer! Boy, was I wrong. The Credit Card paid for my procedures but I was stuck paying minimum payments with 36% interest! I ended up paying almost triple out of pocket. I wish I had of found AmeriPlan ® sooner so I could have saved an enormous amount of money. The Dentist I went to accepted AmeriPlan ® Dental Programs!

Now get this. AmeriPlan ® Dental Plus is only $19.95 a month for your entire household. This includes Discount Dental, Vision, Prescription and Chiropractic. This Program has saved hundreds up to 80% on their dental needs. There is no forms to fill out, no limits on services, all ongoing problems are accepted and there are over 30,000 Dentists nationwide!

Included in AmeriPlan ® Dental Plus is the Vision Program. There are over 12,000 providers nationwide with providers such as Lens Crafters, Pearle Vision, Sears and JC Penney. Savings include 10 to 55% on eye exams and surgery including LASIX! You also save up to 60% on glasses. It gets even better because AmeriPlan ® Prescription Savings is included with the Dental and Vision. With major Pharmacies like Wal-Mart, CVS, Target and Walgreens accepting our Programs, this is a steal!

Lastly, but certainly not least, AmeriPlan ® Chiropractic Program is included with all above! There are over 7,500 participating doctors. Your first initial consultation is FREE! Hundreds of AmeriPlan ® members are saving 30% on Chiropractic services!

AmeriPlan ® Dental Plus, as stated above, is only $19.95 a month for you entire household. Not married? No problem! Anybody living in your home is covered, whether they are relation or not. You can click HERE to look-up providers in your area.

But AmeriPlan ® doesn’t end there! They offer a Discount Health Program with more than 400,000 providers nationwide. All ongoing medical problems are accepted, no claim forms, no limits on visits or services, and even cosmetic procedures accepted! With AmeriPlan ® Basic Health there is a nurseline available to members that can help avoid a wasted trip to the doctor! With this program you can save up to 50% on medical costs. A patient advocate will negotiate with the hospital on your behalf, all specialists are included and there is no age limit! You have the freedom to change physicians whenever you want without having to tell anyone! This Program includes Physician Care, Ancillary Services, Hospital Advocacy and Nurse Line for your entire family for only $29.95/month!

If you would like to get both AmeriPlan ® Health and Dental, there is a program for that! AmeriPlan ® Health Plus includes AmeriPlan ® Dental Plus and AmeriPlan ® Basic Health for only $39.95/month for your entire family. Members are saving thousands of dollars for only $39.95/month.

The last program AmeriPlan ® offers is AmeriPlan ® Total Health Plus. With AmeriPlan ® Total Health Plus you get both AmeriPlan ® Dental Plus and AmeriPlan ® Basic Health (AmeriPlan ® Total Health) AND three other great programs.

First, with AmeriPlan ® Total Health, you are in the Auto Club. With the Auto Club you receive 24 hour roadside assistance. The first $50 of service is free, then you recieve a 25% discount on services. Compare that with major Auto club membership prices!

Second, AmeriPlan ® Total Health includes Identity Theft Protection. In the event you find yourself a victim to identity theft, a personal advocate will work with you to resolve the matter and take proper steps to repair the problem.

AND, AmeriPlan ® Total Health includes Legal Assistance. If you ever need an attorney, AmeriPlan ® Total Health fives a free 1 hour consultation and then a 25% discount on all ongoing legal fees. You also have access to a complete online legal resource.

AmeriPlan ® Total Health is only $59.95 a month for your entire family. Think about what you would pay out of pocket for these services. The amount of savings is phenomenal!

AmeriPlan ® has been a blessing to me and my family. My husband’s insurance through work does not cover dental, vision or chiropractic care. We have saved hundreds of dollars on procedures, prescriptions (that my husband’s insurance did not cover that AmeriPlan ® did!), plus much more.

If you are interested in AmeriPlan ® Dental Plus, Basic Health, Total Health or Total Health Plus then visit the website below to see more and become a member. All the contact information you need is on the website. Thanks to AmeriPlan ®, my family no longer has to suffer the burden of costly medical bills. Let your story be a success too.

CLICK HERE FOR MORE INFORMATION AND TO ENROLL This website goes in depth to discuss all of our plans. You can also enroll on the site. It has my contact information too if you want to call me with any questions.

Megan is a work at home mom to two young sons. She enjoys networking, message boarding, debating and fishing in her spare time.

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October 7th 2009

Texas Residents Finding Options For Health Insurance

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Companies looking for ways to cut costs in a competitive marketplace are increasingly looking to health insurance as a source of savings. While that’s not good news for employees, it does represent something of a trend — employees purchasing their own health insurance or filling in the gaps left by workplace budget cuts.

In Texas, however, there’s more commonly another situation: employees not having health insurance at all. Experts say the primary reason for the state having the highest percentage of uninsured residents in the nation — roughly 25% — is cost, employers simply not being able, or at least wanting, to afford the premiums.

The problem of higher health care costs is not isolated to Texas, of course. Nationwide, so-called “legacy” health care costs have forced employers such as General Motors and other domestic automakers which negotiated benefits packages with workers and unions to look for ways to trim those costs.

Yet in Dallas, Houston and Austin, where the percentage of uninsured is typically greatest, being without health insurance is even more commonplace.

Employees faced with no health insurance are clearly looking for options, one being Health Savings Accounts, which provide workers the ability to save for medical expenses on a tax-free basis while having a high-deductible health insurance policy to cover large medical bills.

More and more Texas residents are considering the Health Savings Account option, which includes both a high-deductible health insurance policy for large medical bills and an investment or retirement account from which the consumer can pay for medical care. If the money in the savings portion isn’t used, it accumulates with tax-free interest until the age of 65, after which time the consumer is able to withdraw the money and use it for any purpose. At that point, the money is subject to normal income tax.

Anyone under the age of 65 with a qualified high-deductible health insurance policy can open an HSA. Not all policies may be qualified under IRS rules, which include minimum deductibles which also determine the maximum amount of the contribution by the consumer. Those signing up should ask whether the insurance company’s high-deductible plan is “HSA-qualified,” since not all high-deductible plans meet the IRS requirements.

To qualify as an HSA-eligible policy in 2007, your health insurance plan must have a deductible of at least $1,100 for individual coverage or $2,200 for families. You can then make a contribution to your HSA up to the amount of the deductible each year. If you’re buying an individual plan, be sure to ask your health insurance company if it is an “HSA qualified” high deductible plan. Not all high deductible plans are eligible, or “qualified”.

Another option is for an employee to take advantage of any limited benefit medical insurance policies offered to part-time or temporary workers who might not be eligible for a comprehensive group medical benefits plan. While the plan will likely offer less coverage, it likely will reimburse for most, if not all, of the cost for routine and preventive services. The limitations may include fewer visits to a doctor and a total limit on benefits –perhaps as little as $2,000 annually. Those plans are unlikely to cover medical services such as surgery and hospitalization.

The major downside of a limited benefit plan includes the lack of coverage for so-called catastrophic hospital bills, something that could occur when the policy’s limitations are reached.

There are also insurance policies that offer cash benefits for conditions such as cancer, heart disease and stroke. The limited cash benefits would cover treatments and nursing care, but consumer advocates point to the specific coverage (for certain diseases or conditions) as major limitations that should have consumers looking elsewhere.



Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com

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