Health Insurance Inforamtion, Individual Health Insurance, Family Health Insurance Information
Content
Where does your dollar go?
Ever wondered where the health insurance companies spend the money that you pay to avail the health coverage? Of course, there is no single recipient who receives all the money. If you have bought health insurance and ever paid heed to the words of advisors or experts, you might have understood that there are various components of health insurance coverage. For example: 1. Doctor visit 2. Hospitalization 3. Prescription drugs The premium that you pay for your health insurance policy covers the costs for all these segments. The importance of understanding these terms lies in the fact that you can choose to opt out what type of coverage you might not need, which helps in reducing the premium costs. Let¶s suppose you enjoy good health status and do not need to see a doctor too often. You can opt out of the coverage provided for doctor visit because it helps in lowering the premium; actually you will find it lower than paying the full amount out of your own pocket. It is clear that understanding the distribution of coverage type and costs involved in every segment of a health insurance policy does help the consumers. In a guide released by the BlueCross BlueShield of Oklahoma, some distribution is given about where the premium paid by the consumers goes: Coverage Component Hospital Costs Description Cost Spent (%)
This includes both inpatient and 35 outpatient services Cost of patient care including salaries, facilities, technology and medical malpractice lawsuits Costs of prescription drugs for healthcare services Medical equipment, orthotics, therapy, hospice, skilled nursing services and other ancillary provider services Taxes, mandates and compliance, claims processing and other administrative costs
Physician Services Prescription Drug Costs
33 14
Other Medical Services Government payments, compliance, claims processing and other administrative costs
5
6%
Consumer Services Insurer Margin
Prevention services that help members stay healthy, medical management programs, provider support and health information technology investments The money that goes to the insurance company
4% 3%
Who buys individual health insurance?
Published by hCentive on 29 Jul in Health Insurance, Health Insurance Now this sounds a bit confusing, for, the answer seems to be obvious. Individuals buy individual health insurance, right? However, the question is who among all the individuals buy an independent health insurance policy±what drives them to do this? Buying individual health insurance is not any easy process by any means. It requires a lot of understanding and attention from the concerned individual. However, there is a lot of freedom in choosing the plans and level of coverage for consumers. In a recent survey published by Kaiser Family Foundation, some statistics have been provided:
y y y y
45% among the surveyed mentioned that their primary reason was due to being selfemployed or a small business owner. 16% among the surveyed said their employers do not offer insurance. 6% among the surveyed mentioned that the employer offers insurance but it is pricey for them. While 3% among the surveyed said that they they don¶t work enough hours to qualify for their employer¶s health insurance.
Now, this gives a clear indication in one direction. Individual health insurance buyers prefer group health insurance offered by their employer as the first choice. However, if they do not get it or if they find it costly or inadequate, they venture into individual health insurance market.
Understanding disability income insurance policies
Published by hCentive on 29 Jun in Health care, Health care Let start from the definition: disability income insurance policies provide replacement income for a specific period if a consumer suffers from a disability and cannot continue to work. Sickness, injury or even the combination of these two could be the cause of disability. If the consumer is employed, the employers may offer short-term and/or long-term disability coverage. At the same time, social security also provides disability protection for those who are severely disabled and unable to work. When it comes to buy a disability income policy, consumers should make sure what the insurer means by disability. Lots of time there remains confusion in a consumer¶s understanding of the term µdisability¶ and the definition of the insurer. It is always better to understand what is required from the consumer¶s end to avail benefits of the policy. We list some points here to make sure the consumers get maximum benefits of disability income policy:
y y y
y
The benefits provided in this policy are usually a percentage of the consumer¶s income at the time of purchase. However, cost-of-living adjustments may be available. It is important to review the benefit as it relates to the cause of the disability. A consumer would like to get insured if disability is caused by accident, illness or injury. Disability income insurance policies include an elimination period before benefit payments actually begin to pay. Consumers should be aware of this period for their policies. It is advised to consider disability income insurance that pays benefits to at least age 65 years. Disability income benefits are designed to replace earned income and a lengthy disability can threaten financial security for the consumer.
Are the health insurance premiums taxdeductible?
y y
y
y
y
Published by hCentive on 26 Jun in Health care, Healthcare Reforms, Health care, Healthcare Reforms Health insurance policyholders often have a very interesting question: are the health insurance premiums tax-deductible? The answer to this important question depends upon who you are who you work for. Let¶s suppose you are a self-employed person. The answer for you would be yes²the premiums you pay for health insurance are tax-deductible. The same would be true for the dependents also but if you are covered through another employer¶s group plan, it won¶t be. In the second case, if you are offered cafeteria plans, you still go tax-free. At the same time, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that you have to spend on health care before any out-of-pocket medical expenses can be deducted. There are some other ways to make sure you have maximum tax-free spent on healthcare. Apart from health insurance premiums, you can also include over-the-counter medicines, optional surgical procedures, etc. for tax deduction. The IRS website has a list of such options that can be included. The mantra to make sure you claim maximum benefits is to plan and to keep complete records of everything. You can file those expenses to make them count as tax-free.
Do you need long term care
Published by hCentive on 24 Jun in Health care, Health care Long term care, as the name implies, is a type of care that helps a consumer meet the personal healthcare requirements over an extended period of time. Healthcare needs depend primarily on the level of intensity and the span of time. Long term care may not be very intensive but it extends itself to a long span of time. Long term care requires good income and resources. Though there could be some subsidized options available from the government-sponsored programs. Lots of people have a misconception that Medicare services would be enough for long-term care²but it is not. Actually, long-term care can be very expensive, and most people cannot afford to pay privately for these services. To get long term care insurance, consumers should check with the companies. As long term care is required by a huge number of people, it is always better to plan it in advance.
Medicare covers some services in a skilled nursing facility on a limited basis for a restricted period of time. But Medicare will not pay for custodial care, which is required in case of disability and old age. Long term insurance policies may differ from the traditional health insurance policies offered by companies. It is beneficial to plan for long term care while you are healthy.
Financially Smart Way to Buy Health Insurance
Published by hCentive on 1 Jun in Health care, Healthcare Reforms, Health care, Healthcare Reforms My company has been selling health insurance for a while and I would like to share what we have learned. When you are buying insurance, you are really buying three products; as I wrote in a previous blog. Let us look at all three components: Insurance: You definitely want health insurance because you want to make sure you have adequate coverage in case something unforeseen happens. This is the primary reason for buying insurance and the responsible decision. Discount Card: Did you ever have to get a procedure done when you were not insured? If you did then you probably know that health care procedures can be very expensive without insurance. What most people may not realize is that health insurance companies negotiate deep discounts from retail prices. For example: An EKG without insurance may cost more then $200; with insurance the cost may come down to $35 or $40. The Discount card is another reason ,and a financially smart decision, to buy insurance. If you do not, you may be stuck with list prices. Another very important point to note is that if you are insured, you will pay the insurance negotiated prices (read discounted prices) even if you are paying for it from your pocket, i.e. you have not met your deductible limit. Pre-pay: First of all, what is pre-pay? Pre-pay is basically health insurance coverage for things that have very high likelihood of happening, e.g. annual exam etc. Pre-pays became very popular in the employer-sponsored world because of tax deductibility of the health insurance premiums. If you employer doesn¶t offer health insurance and you are buying health insurance as a consumer, pre-pays may not be such a good idea. The main reasons are:
y y
Every $100 of coverage costs you between $125 to $150 because the insurance company has to add their administrative costs, profits, sales and marketing costs etc. Normally there is a small likelihood that you may not use the service (e.g. you forgot about the annual exam and the annual exam got pushed out to the following year because of last minute business travel etc.). Essentially you have paid for it whether you use the benefit or not.
y
There is no tax advantage in pre-paying the insurance company. You might be much better off buying insurance without the pre-pay and putting the money (savings in premium) in a tax advantaged account.
In a summary, most people are looking for peace of mind while buying insurance and as a result may end up spending more than they should. Having coverage for routine checkups and annual exams might give you peace but the peace of mind does not come cheap and you might be able to afford the same level of coverage at a lower cost by putting savings in premium in a tax advantaged HSA account.
Types of Health Insurance Plans in USA
Published by hCentive on 15 Mar in Health care, Healthcare Reforms, Health care, Healthcare Reforms Understanding different types of health insurance plans is an important step when one ventures to buy a health insurance policy. Different companies offer different types of plans based on individual needs of the policy seeker, but if we want to classify broadly, there are two types of health insurance plans²indemnity health insurance plans and managed care health insurance plans. Indemnity health insurance plans are also called reimbursement plans where the company reimburses your medical expenses regardless of which provider you used. Limitations on the amount of reimbursement are there but still, it is different from managed care programs where they provide healthcare programs to cut costs. Types of Indemnity health insurance plans: y Reimbursement of actual charges: In this plan, the insurer reimburses the insured for the actual cost of medical care. The coverage of services or procedures may be small but it is defined in the policy. y Reimbursement of a percentage of actual charges: in this plan, insurer pays a percentage of the medical bills on covered services and procedures. y Indemnity: in this plan, the insurer gives the insured a specified amount per day for a predetermined number of days regardless of the actual cost of care. If the actual expense is on the lower side, the reimbursement will be decreased accordingly.
Types of Managed care health insurance plans y Health Maintenance Organizations (HMOs): Health maintenance organizations are prepaid health plans and as a member of this plan, a monthly premium is paid by the member. HMOs provide comprehensive care for the member and family, including doctors¶ visits, hospital stays, emergency care, surgery, laboratory tests, x-rays, and therapy.
y Point-of-Service Plans (POS): POS insurance plans are similar to HMOs but members are free to opt out for doctors outside the network but still getting some coverage. y Preferred Provider Organizations (PPOs): Preferred provider organization is a combination of traditional fee-for-service and an HMO.
Why need of Health Insurance is Increasing
Published by hCentive on 14 Mar in Health care, Health care While availing a health insurance policy is always advised at various levels of individuality ranging from being a student to a family member or a senior citizen, lately, it has been found out that the need of health insurance has increased in developed countries. There has been an increase in natural calamities, epidemics and pandemics apart from increased threat to health from occupational hazards. Some factors that are attributed to increase need of health insurance include:
y y y y y
New treatments that address some disease earlier believed to be incurable Intensive diagnostic testing that has increased the medical bills Increased population of senior citizens that require regular medical attention Advancement in medical technology Lifestyle factors that reduce health living like alcohal, smoking and fast food, etc.
It is clear that the Congress has launched the campaign of having necessary healthcare feeling increased need of medical coverage for all the citizens of United States. As we talked earlier on this blog, there has been a huge resistance to this bill but still there is some credibility in this move. What is your opinion? Share with us.
Ever wondered where the health insurance companies spend the money that you pay to avail the health coverage? Of course, there is no single recipient who receives all the money. If you have bought health insurance and ever paid heed to the words of advisors or experts, you might have understood that there are various components of health insurance coverage. For example: 1. Doctor visit 2. Hospitalization 3. Prescription drugs The premium that you pay for your health insurance policy covers the costs for all these segments. The importance of understanding these terms lies in the fact that you can choose to opt out what type of coverage you might not need, which helps in reducing the premium costs. Let¶s suppose you enjoy good health status and do not need to see a doctor too often. You can opt out of the coverage provided for doctor visit because it helps in lowering the premium; actually you will find it lower than paying the full amount out of your own pocket. It is clear that understanding the distribution of coverage type and costs involved in every segment of a health insurance policy does help the consumers. In a guide released by the BlueCross BlueShield of Oklahoma, some distribution is given about where the premium paid by the consumers goes: Coverage Component Hospital Costs Description Cost Spent (%)
This includes both inpatient and 35 outpatient services Cost of patient care including salaries, facilities, technology and medical malpractice lawsuits Costs of prescription drugs for healthcare services Medical equipment, orthotics, therapy, hospice, skilled nursing services and other ancillary provider services Taxes, mandates and compliance, claims processing and other administrative costs
Physician Services Prescription Drug Costs
33 14
Other Medical Services Government payments, compliance, claims processing and other administrative costs
5
6%
Consumer Services Insurer Margin
Prevention services that help members stay healthy, medical management programs, provider support and health information technology investments The money that goes to the insurance company
4% 3%
Who buys individual health insurance?
Published by hCentive on 29 Jul in Health Insurance, Health Insurance Now this sounds a bit confusing, for, the answer seems to be obvious. Individuals buy individual health insurance, right? However, the question is who among all the individuals buy an independent health insurance policy±what drives them to do this? Buying individual health insurance is not any easy process by any means. It requires a lot of understanding and attention from the concerned individual. However, there is a lot of freedom in choosing the plans and level of coverage for consumers. In a recent survey published by Kaiser Family Foundation, some statistics have been provided:
y y y y
45% among the surveyed mentioned that their primary reason was due to being selfemployed or a small business owner. 16% among the surveyed said their employers do not offer insurance. 6% among the surveyed mentioned that the employer offers insurance but it is pricey for them. While 3% among the surveyed said that they they don¶t work enough hours to qualify for their employer¶s health insurance.
Now, this gives a clear indication in one direction. Individual health insurance buyers prefer group health insurance offered by their employer as the first choice. However, if they do not get it or if they find it costly or inadequate, they venture into individual health insurance market.
Understanding disability income insurance policies
Published by hCentive on 29 Jun in Health care, Health care Let start from the definition: disability income insurance policies provide replacement income for a specific period if a consumer suffers from a disability and cannot continue to work. Sickness, injury or even the combination of these two could be the cause of disability. If the consumer is employed, the employers may offer short-term and/or long-term disability coverage. At the same time, social security also provides disability protection for those who are severely disabled and unable to work. When it comes to buy a disability income policy, consumers should make sure what the insurer means by disability. Lots of time there remains confusion in a consumer¶s understanding of the term µdisability¶ and the definition of the insurer. It is always better to understand what is required from the consumer¶s end to avail benefits of the policy. We list some points here to make sure the consumers get maximum benefits of disability income policy:
y y y
y
The benefits provided in this policy are usually a percentage of the consumer¶s income at the time of purchase. However, cost-of-living adjustments may be available. It is important to review the benefit as it relates to the cause of the disability. A consumer would like to get insured if disability is caused by accident, illness or injury. Disability income insurance policies include an elimination period before benefit payments actually begin to pay. Consumers should be aware of this period for their policies. It is advised to consider disability income insurance that pays benefits to at least age 65 years. Disability income benefits are designed to replace earned income and a lengthy disability can threaten financial security for the consumer.
Are the health insurance premiums taxdeductible?
y y
y
y
y
Published by hCentive on 26 Jun in Health care, Healthcare Reforms, Health care, Healthcare Reforms Health insurance policyholders often have a very interesting question: are the health insurance premiums tax-deductible? The answer to this important question depends upon who you are who you work for. Let¶s suppose you are a self-employed person. The answer for you would be yes²the premiums you pay for health insurance are tax-deductible. The same would be true for the dependents also but if you are covered through another employer¶s group plan, it won¶t be. In the second case, if you are offered cafeteria plans, you still go tax-free. At the same time, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that you have to spend on health care before any out-of-pocket medical expenses can be deducted. There are some other ways to make sure you have maximum tax-free spent on healthcare. Apart from health insurance premiums, you can also include over-the-counter medicines, optional surgical procedures, etc. for tax deduction. The IRS website has a list of such options that can be included. The mantra to make sure you claim maximum benefits is to plan and to keep complete records of everything. You can file those expenses to make them count as tax-free.
Do you need long term care
Published by hCentive on 24 Jun in Health care, Health care Long term care, as the name implies, is a type of care that helps a consumer meet the personal healthcare requirements over an extended period of time. Healthcare needs depend primarily on the level of intensity and the span of time. Long term care may not be very intensive but it extends itself to a long span of time. Long term care requires good income and resources. Though there could be some subsidized options available from the government-sponsored programs. Lots of people have a misconception that Medicare services would be enough for long-term care²but it is not. Actually, long-term care can be very expensive, and most people cannot afford to pay privately for these services. To get long term care insurance, consumers should check with the companies. As long term care is required by a huge number of people, it is always better to plan it in advance.
Medicare covers some services in a skilled nursing facility on a limited basis for a restricted period of time. But Medicare will not pay for custodial care, which is required in case of disability and old age. Long term insurance policies may differ from the traditional health insurance policies offered by companies. It is beneficial to plan for long term care while you are healthy.
Financially Smart Way to Buy Health Insurance
Published by hCentive on 1 Jun in Health care, Healthcare Reforms, Health care, Healthcare Reforms My company has been selling health insurance for a while and I would like to share what we have learned. When you are buying insurance, you are really buying three products; as I wrote in a previous blog. Let us look at all three components: Insurance: You definitely want health insurance because you want to make sure you have adequate coverage in case something unforeseen happens. This is the primary reason for buying insurance and the responsible decision. Discount Card: Did you ever have to get a procedure done when you were not insured? If you did then you probably know that health care procedures can be very expensive without insurance. What most people may not realize is that health insurance companies negotiate deep discounts from retail prices. For example: An EKG without insurance may cost more then $200; with insurance the cost may come down to $35 or $40. The Discount card is another reason ,and a financially smart decision, to buy insurance. If you do not, you may be stuck with list prices. Another very important point to note is that if you are insured, you will pay the insurance negotiated prices (read discounted prices) even if you are paying for it from your pocket, i.e. you have not met your deductible limit. Pre-pay: First of all, what is pre-pay? Pre-pay is basically health insurance coverage for things that have very high likelihood of happening, e.g. annual exam etc. Pre-pays became very popular in the employer-sponsored world because of tax deductibility of the health insurance premiums. If you employer doesn¶t offer health insurance and you are buying health insurance as a consumer, pre-pays may not be such a good idea. The main reasons are:
y y
Every $100 of coverage costs you between $125 to $150 because the insurance company has to add their administrative costs, profits, sales and marketing costs etc. Normally there is a small likelihood that you may not use the service (e.g. you forgot about the annual exam and the annual exam got pushed out to the following year because of last minute business travel etc.). Essentially you have paid for it whether you use the benefit or not.
y
There is no tax advantage in pre-paying the insurance company. You might be much better off buying insurance without the pre-pay and putting the money (savings in premium) in a tax advantaged account.
In a summary, most people are looking for peace of mind while buying insurance and as a result may end up spending more than they should. Having coverage for routine checkups and annual exams might give you peace but the peace of mind does not come cheap and you might be able to afford the same level of coverage at a lower cost by putting savings in premium in a tax advantaged HSA account.
Types of Health Insurance Plans in USA
Published by hCentive on 15 Mar in Health care, Healthcare Reforms, Health care, Healthcare Reforms Understanding different types of health insurance plans is an important step when one ventures to buy a health insurance policy. Different companies offer different types of plans based on individual needs of the policy seeker, but if we want to classify broadly, there are two types of health insurance plans²indemnity health insurance plans and managed care health insurance plans. Indemnity health insurance plans are also called reimbursement plans where the company reimburses your medical expenses regardless of which provider you used. Limitations on the amount of reimbursement are there but still, it is different from managed care programs where they provide healthcare programs to cut costs. Types of Indemnity health insurance plans: y Reimbursement of actual charges: In this plan, the insurer reimburses the insured for the actual cost of medical care. The coverage of services or procedures may be small but it is defined in the policy. y Reimbursement of a percentage of actual charges: in this plan, insurer pays a percentage of the medical bills on covered services and procedures. y Indemnity: in this plan, the insurer gives the insured a specified amount per day for a predetermined number of days regardless of the actual cost of care. If the actual expense is on the lower side, the reimbursement will be decreased accordingly.
Types of Managed care health insurance plans y Health Maintenance Organizations (HMOs): Health maintenance organizations are prepaid health plans and as a member of this plan, a monthly premium is paid by the member. HMOs provide comprehensive care for the member and family, including doctors¶ visits, hospital stays, emergency care, surgery, laboratory tests, x-rays, and therapy.
y Point-of-Service Plans (POS): POS insurance plans are similar to HMOs but members are free to opt out for doctors outside the network but still getting some coverage. y Preferred Provider Organizations (PPOs): Preferred provider organization is a combination of traditional fee-for-service and an HMO.
Why need of Health Insurance is Increasing
Published by hCentive on 14 Mar in Health care, Health care While availing a health insurance policy is always advised at various levels of individuality ranging from being a student to a family member or a senior citizen, lately, it has been found out that the need of health insurance has increased in developed countries. There has been an increase in natural calamities, epidemics and pandemics apart from increased threat to health from occupational hazards. Some factors that are attributed to increase need of health insurance include:
y y y y y
New treatments that address some disease earlier believed to be incurable Intensive diagnostic testing that has increased the medical bills Increased population of senior citizens that require regular medical attention Advancement in medical technology Lifestyle factors that reduce health living like alcohal, smoking and fast food, etc.
It is clear that the Congress has launched the campaign of having necessary healthcare feeling increased need of medical coverage for all the citizens of United States. As we talked earlier on this blog, there has been a huge resistance to this bill but still there is some credibility in this move. What is your opinion? Share with us.
