Is Insurance Really Worth It

                                                       

September is Life Insurance Awareness Month which reminds consumers of the benefits of having life insurance. The recent earthquakes and hurricanes that the east coast experienced last month are another reminder why consumers need insurance.  Many homeowners and auto owners suffered loss or damages due to the earthquake and hurricanes.  For those who did not have insurance, repairs will be costly.

Insurance is a form of protection against loss, damage or theft.  Insurance should not be used as a form of investment or to get extra money.  Insurance should provide enough to reimburse for loss or damages. Three benefits to having insurance are: 

1.      Can be used to reimburse for a loss that occurs

2.      Protects against harm to something or someone

3.      Saves you money in the future

There are several types of insurance available: life, health, auto, fire, home, dental, flood, disability (short-term and long-term), and many more. The three most important types of insurance everyone should have are: disability, life and health. 

Get a free analysis of your existing coverage to see if you have enough or too little coverage.   Many consumers have more coverage than needed.  Many consumers get the coverage suggested by their insurance agent and don’t bother to answer questions or comparison shop. 

When you purchase a new car, it is wise to get collision and comprehensive coverage but as your car gets older you may only need to have collision coverage.  This step could save you anywhere from $50 to $200 a month.  Collision coverage should be adjusted annually or every two years and should be based on the value of your car. Also, verify your liability coverage and adjust as needed. Here are 10 ways to save money on insurance.

1. Increase deductibles.  Increase deductibles to lower your monthly premium.  This will save you money and prevent you from filing minor claims which can increase your premium.
2. Assess. Assess the assess the replacement value of your insured items – car, home, health, etc.  If you house is worth $200,000 or the cost to rebuild you home is $200,000 but you only have coverage for $100,000, you need to adjust.
3. Reputation.  Research the insurance company on the Better Business Bureau website or the internet to gather information on any complaints or the quality of customer service.
4. Home.  Consider waving payment of your homeowner’s insurance by your mortgage company and pay it on your own.  This can save you anywhere from $50 to $300 a year.
5. Health.  Many consumers file bankruptcy or have bad credit due to medical bills.  The increasing high cost of health care services and prescriptions is the main reason why everyone should have health insurance including dental and vision insurance if you wear glasses.
6. Life. Adjust your life insurance policy as home environment changes.  Update every 5 years and when your children become adults, your spouse retires, etc.
7. If you have multiple insurance products with different companies contact each company and get a quote for bundling your products to help you save money.
8. Companies always provide discounts or specials but do not always advertise them.  Every 3-6 months call each service provider and ask if they are offering any specials and what discounts they have available for the services you currently have. 
9. What If.  List different scenarios that could happen and make sure you have enough insurance coverage for each scenario, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
10. Research. Comparison shop for insurance with sites such as Bankrate, Progressive, AARP or ehealthinsurance.com to find the best insurance coverage.

Getting the right coverage will save you money in the future and help you get over any financial crisis you may experience.  

Open Enrollment Health Insurance Tips

                                          

If you are one of the lucky employees who have a job and have health insurance soon you are probably getting ready to participate in Open Enrollment.  Open Enrollment is an open benefits option for employees to make corrections or updates to their current health insurance benefits.  Health insurance companies are required to accept any changes or updates without questions or documentation of changes.  Health insurance benefits account for approximately 30% of an employee’s salary.

For those currently employed, you can make changes during your employers Open Enrollment which usually begins each year in October for:  prescription drugs, dental, health, flexible spending account, term life insurance, long-term care insurance and accidental death insurance but varies by employer.  Pick the options you know you will use.  Skip the ones you don’t need. 

To take full advantage of Open Enrollment, verify all of your information is accurate.  If you have benefits that will no longer be paid in 2014, ask your health plan provider if you can pay for the services using a Flexible Spending Account. Read all of the information provided to you prior to making any changes to make sure you pick the option that is best for you.

You may qualify for a health savings account (HSA) if your health insurance policy has a deductible of at least $3,300 for individual coverage or $6,550 for families.  Money is put in a pre-tax account which grows tax-deferred and can be used to pay for co-payments, deductibles, and other medical expenses. You can roll over the unused money each year and take the balance with you if you leave your job. Some employers contribute to employee HSAs. 

If you don’t qualify for a HSA you can sign up for a flexible spending account (FSA) which allows you to save money to pay for out-of-pocket medical expenses. In 2014, the maximum amount employees can contribute to a FSA will be $2,500 per year.  Your FSA contributions do not have to pay state and federal income taxes or Social Security payroll tax. The catch is you have to spend the remaining money by the end of the year or you lose the money.

Here is Why You Should Get Health Insurance

                                                                                       

May is a time of recognition of several health issues such as:  Family Wellness Month, Skin Cancer Awareness Month, National Physical Fitness and Sports Month, American Stroke Month, Hepatitis Awareness Month, Mental Health Month, Lyme Disease Month, National Arthritis Awareness Month, National Osteoporosis Awareness Month, National High Blood Pressure Education Month,

Lupus Awareness Month, and National Asthma and Allergy Awareness Month.

Now is a great time to get health insurance or review your current policies even if you missed the Affordable Care Act deadline. You can still get private health insurance from companies such as einsurance.com or ehealthinsurance.com. There are several types of health insurance available: standard health insurance, dental insurance, vision insurance, short-term disability, long-term disability, accident insurance, long-term care insurance, critical care insurance, cancer and disease specific insurance and more.

Health insurance is needed if you develop a health condition; need to go to the emergency room or for preventive health care services.   When a patient has health insurance there is a set limit that hospitals, doctors and other medical professionals can charge for services.  Without medical insurance, a patient can be charged whatever fee the doctor or hospital chooses for services and in some cases may be charged multiple times for the same services. 

Disability insurance is used if you have a short-term or long-term medical condition that prevents you from working and ensures that you still continue to receive a paycheck, usually at least 60% of your salary.

Get a free analysis of your health existing coverage to see if you have the right amount of coverage and services required for you and your family.  When buying health insurance it is best to comparison shop. Get at least three price quotes from companies and the select the one that best meets your needs.  You can contact the Better Business Bureau or search their website for companies and view their reliability report. You may not see the immediate benefit of buying health insurance now but in the long run you will be glad you did. Buying health insurance will:

1. Save you money in the future
2. Reduce medical debt and expenses
3. Provide discounts and reduced rates on medical services
4. Provide reduced rates on other policies such as life insurance

HMO versus PPO - Which One is Right for You

Approximately 48.6 million Americans do not have health insurance.  Without health insurance, you will be required to pay a higher bill if you or a family member requires medical treatment.  Health insurance should cover all types of medical care such as: maternity care, preventive care, doctor visits, hospitalization, prescription drugs, outpatient services, emergency room services, mental health, substance abuse treatment, laboratory and diagnostic, and rehabilitation services.  Health insurance should reduce your out-of-pocket expenses.  

If you want a lower premium select a higher deductible and higher out-of-pocket limit (the most amount of money you could be required to pay for services covered in your plan in a plan year). Not all plans have a deductible maximum or out-of-pocket maximum. Read the "Summary of Benefits and Coverage” brochure to get a better understanding of the services and fees.

There are two common types of health plans that can be purchased: Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). These can be purchased through your employer which is usually cheaper or on your own. 

When using a HMO, each person insured is required to select a primary care physician. Some doctors belong to medical groups. If you select a medical group, you have to select a doctor in that medical group.  All doctors that you desire to use must be in the same medical group.  Your primary care physician usually coordinates your referrals to other doctors.  You must stay in the network of physicians for your health plan.  If you choose a doctor outside of your network you services are not covered.

If you are not feeling well you must visit your primary care physician first unless it is an emergency. Your primary care physician will determine if you need to see a specialist. If you visit a doctor without a referral from your primary care physician, your visit will not be covered and will be considered an out-of-pocket expense.

Co-pays (cost a member pays for services provided by a doctor at each office visit and is determined when you first sign up as patient) and premiums are usually cheaper.  There are usually no deductibles (amount paid by insured before insurance covers any of the costs) and slight out-of-pocket costs. However, each HMO plan is different.

Some HMOs are independent where all the doctors and staff are employees of the HMO such as Kaiser Permanente are paid from the company and have their own hospitals. Other HMOs are a group of doctors who agree to see patients for a fee determined by the insurance company such as Blue Shield. This type of HMO contracts with local hospitals for services.  Most HMOs are for-profit companies that have to satisfy shareholder and investor demands for making money.

The main disadvantage of HMOs is that you are required to select from a specific pool of physicians. Another disadvantage is HMO’s are the least flexible health plan.  If you do not select a primary care physician you will have to find another doctor or pay to see your current physician if they are not in your network.

HMOs usually do not pay for non-emergency care performed by an out-of-network physician. Most HMOs do not require you to fill out claim forms. Most have restrictions about changing primary care doctors.  When you choose a primary care doctor you are expected to remain with that doctor unless the doctor retires or dies. 

Several HMOs require doctors to meet a patient quota each day and are required to see a minimum number of patients.  Doctors who see less than the minimum number of patients may be penalized. Some HMOs compensate doctors using capitation.  Capitation is occurs when contracted doctors may get a certain amount of money each month for each patient in their practice whether the patient comes to get medical treatment that month or not.  The doctor makes more money if they see less patients and order less tests.

Any laboratory or diagnostic test must be pre-approved by your HMO.  The approval process can take up to several weeks.  If you get sick and require hospitalization HMOs try to get you out as soon as possible because they lose money when you are in the hospital.  However, if you are approved for a hospital stay it is covered 100% or near 100%.

PPOs allow patients to see doctors that are not part of a network at a higher cost. PPOs allow you to switch doctors with ease.  Patients usually do not have to select a primary care physician but are required to pay a deductible. However, each PPO plan is different.

PPOs offer a broader pool of doctors.  Referrals are not required to see an in-network specialist; however some doctors may require a referral from your primary care physician. Service from in-network doctors is cheaper. Out-of-network care is partially covered.

Some PPOs do not have an annual deductible. Once you meet the deductible the cost of services are covered 100%.  PPOs are a group of doctors who contract with insurance companies and agree to see patients for a fee determined by the insurance company.  PPOs contracts with doctors and local hospitals for services.  You receive emergency room care coverage.

One disadvantage is using an out-of-network doctor which will cost more. Another disadvantage is you will have to pay higher co-pays.  PPOs may require you to pay a percentage of the cost of laboratory, diagnostic tests and hospitalization costs.  Some PPOs have patient quotas and encourage a shorter hospital stay.

You may have to complete claim forms for some services and will get reimbursed a portion of the upfront money you paid.  PPOs are a great option for people who want some independence in choosing their health care.  If you have several health problems or like to get second opinions a PPO is the best option.  A PPO is not a good option for those living paycheck to paycheck or who earn a variable income.