General Business and Finance Blog

Perhaps this is an unnecessary statement of the obvious, but the point of insurance is to give people a financial safety net. Should an emergency or disaster strike, money you would struggle to find is paid out by your insurance company. But the squeeze has been on for the last decade as medical costs and the prices of essential drugs have been rising fast. In fact, so fast that the insurers cannot pass on all the increases to their policyholders. It was hard to raise premium rates while the economy was doing well. It became impossible to raise premiums when the recession hit without there being investigations by each state’s Commissioners for Insurance and complaints from everyone else. There comes a point when the insurer cannot get any more blood from the stone and has to sacrifice profits. This has left the medical profession, the hospitals and clinics in a winning position, while the pharmaceutical industry’s profits have continued to rise despite the recession. At the other end of the spectrum, the patients are the losers. There are some who discover the small print in their policies denies cover for the very illnesses they have. There are others whose savings are not enough to pay the deductibles and co-payments. And then there are those whose policies are cancelled when they make a claim for a chronic disease or disorder.

There is a new piece of research from the Commonwealth Fund, an independent, non-profit body. In 2007, it carried out a detailed survey among 2,600 people aged between 19 and 64. When their coverage was analysed, 20% were found significantly underinsured. Why was this happening? Because they were already spending more than 10% of their income on health coverage, whether as premiums, deductibles or both. When the underinsured were added to the uninsured, this represented 42% of adult Americans. Like the uninsured, this forces the underinsured to think twice before they have treatment with more than half either refusing treatment or struggling with debt because of treatment.

In the push for healthcare reform, the focus has been on the uninsured. But this fails to recognize the injustice suffered by the underinsured. No one should be forced to choose between refusing needed treatment and potential bankruptcy. It is therefore going to be an interesting year in prospect as the reform slowly comes into force. Both the poor and the middle class need access to cheap health insurance with reasonably comprehensive coverage. This will further squeeze the insurance industry because it will be denied the right to refuse coverage to those with pre-existing conditions and will be forced to establish group health insurance for those who have struggled to find affordable plans. In all of this, the key to success will be the ability of government and the insurers to impose more control over costs. President Obama has negotiated with the pharmaceutical industry and there is some agreement to hold down prices for those in Medicare and Medicaid. The for-profit healthcare industry also sees some self-interest in moderating its price increases and has given undertakings to the Administration. If some of the pressure is removed from the insurance industry, premium rates will stabilize and the reforms should offer a more fair system to all with a health plan. We can only hope for the best while we wait and see what happens.

One of the more annoying features of the insurance world is its habit of distilling options down to simple sets of letters and then failing to clearly explain what the letters mean. In other words, insurers hide behind jargon and prefer not to explain clearly what you are buying. You are expected to assume the insurer has your interests at heart and pay over your money without a second thought. In many cases it works. Over the years, we have given up the unequal struggle and just say prayers we never fall sick. But, as premium costs have risen and the recession has cut back our spending power, trying to understand the options is back on the menu. So let’s start with an explanation of HMOs and PPOs. In fact, they both rely on a network of physicians, clinics and hospitals, but they differ significantly in the detail of how they deliver healthcare to you and your family.

A Health Maintenance Organization (HMO) is a network of healthcare professionals that enters into a contract with an insurance company. The insurer offers a captive group of people to refer to the network and, based on the expected volume of business, the network agrees a fixed fee for all the main services on offer. In theory, this works well for everyone. The fees are discounted because of the volume of business, so the insurer saves money and charges lower premiums. This is usually the cheapest form of health plan with very low copayments and, often, no deductibles. But there are problems. HMOs are very reluctant to accept people with existing conditions requiring expensive treatments. They prefer most of their patients to be reasonably healthy. The reason is basic economics. Every physician has to meet a quota of patients in a day. This means spending the shortest possible time on each consultation. Long diagnostic sessions disturb the quota and can result in penalties to both the doctors who miss their numbers and the patients who have slowed down the queue. There are also significant restrictions on patient choice. A nominated primary care doctor decides what referrals shall be made and to whom. HMOs are the cheapest form of care, but you have little control over the treatment you or your family receive.

A Preferred Provider Organization (PPO) uses the same basic approach but, because you pay more, you buy greater control over the treatment. The copayments are around 20% and there are usually deductibles. But, you have freedom to choose your own doctors. So long as you go see a physician in the network, you are covered. If you want to see someone outside the network, you usually only pay the difference between the network rate and the actual fees your choice collects.

So, when it comes to cheap health insurance, an HMO is the better option. But if you have the money and a health problem likely to need more extensive treatment, you should opt for a PPO. It always comes back down to your own personal needs and what you can afford. Cheap health insurance always comes with limitations. Read the small print before you buy into any plan and see exactly what you can and cannot do before you agree to buy the policy.

The lawmakers in Colorado are debating a change in the law to correct the gender discrimination currently requiring women to pay more than men to insure their health. The facts are uncompromising. In some 90% of all private health plans, women have premium rates 60% higher than men. This is so even though the statistics show women enjoy better health than men and make fewer claims. This is so even though the men used for comparative purposes are significantly older. And, if you feel you need any more confirmation of the basic unfairness, even men who smoke pay less than female non-smokers. As one of the women promoting the bill commented: insurers often refuse coverage because the applicant has a pre-existing condition. The way the premiums are loaded, it seems being a woman is a pre-existing condition.

The people who are paid to speak on behalf of the insurance industry usually fall back on the tried and trusted defense that women have medical needs specific to their gender. The most often quoted example is maternity and prenatal care. Ignoring the fact that men also have problems specific to their gender, such as erectile dysfunction, women are still quoted premiums 60% higher on policies excluding reproductive health needs. In other words, the discrimination persists even though the scope of the medical coverage is identical. So what’s going on? The answer, in this instance, is slightly complicated. If we start with auto insurance, it’s common knowledge that young men are statistically more likely than any other group of drivers to crash into another vehicle or some stationary object. Thus, where the policy discriminates between different groups of drivers, young men pay significantly more than women who tend to drive more safely. Not all auto policies do discriminate. By spreading the risk among a big group of drivers, the good subsidize the bad. But, most auto insurers do set different premium rates for different groups of drivers distinguished by gender and age. In medicine, it’s a fact that men fall ill and die, whereas women tend to recover from illnesses. This is one of the reasons why women have a longer life expectancy than men. But it also explains why women cost more. They survive for longer with chronic problems requiring continuing treatment. Thus, if the premium is a reflection of the likely costs of treatment over a person’s lifetime, it may appear slightly more reasonable to charge women higher premiums. Except this ignores the general rule that private health insurance stops at 65 as Medicare kicks in. The major long-term costs tend to occur after 65.

Colorado looks as though it may join the one or two other states with equality provisions. There’s no evidence from these other states that men now have to pay significantly more. For now, insurers simply make less profit. As a woman, it’s particularly important to research exactly what the different companies offer. Because of this, searching for cheap health insurance is a greater challenge. Always refer to the websites of the companies making the best quotes to see if there are additional discounts available or special policies for women. If there seems to be no cheap health insurance available, talk directly with the insurers to see whether the difference between the male and female premium rates can be reduced. Not everyone is lucky enough to live in a state committed to equality. It is for you to protect yourself as best as possible.

Many people are complaining about their health insurance costs, having a dramatic increase in rates over a short period of time. Some policyholders have noticed that their rates increased by 30% over the last two years and that definitely rings a bell, when a good portion of your income is spent on health insurance. In this time when every spare dollar counts, people are looking for ways to minimize their expenses and insurance, whether health, car or homeowners, is the first thing that comes in mind when cutting costs. Some people choose to drop health coverage altogether, ending up with astronomic bills for any medical service they get. Others are more careful with their decisions and first investigate what other types of health insurance can bring to the table. Here are some things to consider if you want to minimize your insurance costs.

Should I get individual or group health insurance plan?

There are a lot of questions about group and individual health insurance. Of course, group plans are very convenient in the sense that you can insure your entire family and pay out a single premium rather than have multiple separate policies, which only multiply the annoying paperwork. However, group health insurance usually has higher rates as it should guarantee that even high risk customers within the group have adequate coverage. This, of course, makes the healthier group members pay for the risk they share with the less healthy members. Such a situation can be acceptable if there are different health issues among different members. But if your family is healthy in general it would be more cost effective to purchase separate individual policies for each member, because the rates in individual plans are based on your particular health situation and if it’s OK then you will get much lower rates than with a group health insurance plan.

Outline your exact insurance needs and get an appropriate plan

If you are looking for cheap health insurance you first have to determine what your exact insurance needs are. Analyze your conditions, see how often you go to the doctor and what particular services you are using most frequently, and choose a plan that gives you the base rates for your exact needs. With so many different plans out there on the market you should definitely find the one that will give you cheap health insurance and will address all of your needs to the proper extent.

Finding cheap health insurance while self-employed

Those workers who are self-employed often find it hard to get adequate coverage for a low price. The group health insurance benefits that an employer can give their workers don’t apply here, and in most cases self-employed specialists have to go with independent individual health insurance plans that can sometimes be quite expensive. However, if you are leaving a workplace with good group health insurance benefits, you may fall under COBRA regulations in certain circumstances and continue receiving group health benefits while already being self-employed. If your previous employer didn’t have any group health benefits, it would be better to go independently.

It is very possible that you need to fix your health problems and it is also possible that you did give it a thought. It is important to realize that health should not be taken for granted. What does insurance usually do for you? Well, we would not necessarily state that insurance gives you a possibility to stop caring about yourself but it does protect you from high costs and different types of expenses that can occur due to health troubles. There are cases in life when we need urgent hospitalization and find ourselves in difficult chronic conditions. In such cases insurance is inevitable.

People may think that they don’t need to get insured because they are healthy and don’t experience any worries. This may be so today but tomorrow everything can change. It can happen so that tomorrow you will need to visit a doctor urgently, and all the expenses will be paid from the pocket. The sum you will be asked to pay can be surprisingly small or unbelievably big. You can never know. It totally depends on the situation. Anything you do should be in peace with your budget and income. That is one of the most important rules to remember.

If you don’t know which type of insurance you need, you should not wait around for too long. You can always ask somebody for a piece of advice or get a Professional consultation on your special case. Health plan materials can be found in human resources departments as well as online. Some companies are also willing to provide insurance plans on health issues. But most important element here is not to get the first thing you see. You should really take your time and think your decision over when you decide to do it.

If you are not attached to any company, in other words when you work on your own, or when you don’t have insurance or your boss doesn’t consider necessary getting you on the insurance plan, you can find everything you need by yourself.

There are lots of ways of getting on insurance. There are lots of companies to choose from. It is up to you who to pick and what to go for.

As we are all humans that care about our budgets, we want your health insurance to be cheap. So we wonder about certain things:

• What will my monthly Premium be?
• What is the sum to pay before the plan starts?
• How much will there add up to the plan for doctor’s visits and consultations?
• If I decide to go for a PPO, how much will I need to pay if I address doctors or hospitals outside of the PPO’s network?
• How am I protected from medical costs when the bills get crazy high?

Before one gets his insurance done, we strictly recommend to reconsider and point out the major reasons for doing so. You can get health insurance quotes or you can make an appointment with a health representative. It doesn’t matter what you do as long as you make a good choice. Cheap health insurance can be found by those who are willing to find it. It doesn’t have to turn against you in the end. It can just be fine.