General Business and Finance Blog

Even the states whose politics make the idea of “Obamacare” unacceptable are feeling the pressure to begin thinking about insurance marketplaces. As the federal law deadlines edge closer, states must either create their own exchanges through which citizens can buy their policies or face the threat the federal government will offer their own version. Why should GOP states fear the federal government on this? Forgive a little cynicism. If GOP states sit down to write laws for local marketplaces, they can do whatever is in their power to protect the interests of their local insurance companies. Although we have yet to see any specific proposals from the federal government, it’s likely their plans will be a boilerplate solution that favors consumers over the insurers. Since the eventual network of local exchanges will allow millions of Americans to buy their policies, anything that swings the balance of power in favor of consumers is bad news for the profitability of the insurers. This is forcing even the most resistant of state legislatures to start drafting their own laws.

Leading from the front on this comes California which has just passed two statutes to bring the local marketplace into being. It’s likely many other states will follow the Californian solutions except, in Iowa, we have an information-only exchange in preparation which will leave it to the private insurers to sell all policies in that state. The Californian experience is interesting. In addition to the specific provisions mandated by federal law, there has actually been some bipartisan negotiation, if only because Governor Schwarzenegger made an early announcement in favor of the federal system. Not unlike this website, Californians will be able to access a website containing standardized information about policies allowing a full comparison on a like-for-like basis. If citizens have problems in understanding this information, there will be a toll-free number with real people available to explain the health plans to the callers. Even more importantly, this information will be linked to the federal and state subsidies that will help pay for the coverage. The aim is to give people as much information about the available policies and how to pay for them through an independent website.

Experts in the health insurance market estimate more than 8 million Californians will be eligible to buy through this exchange. There will be a similar marketplace through which small employers can buy coverage. Any employer with less than 100 employees will be allowed to buy a plan with subsidies and tax credits as an encouragement. This should give about 4 million more people better coverage. To ensure local people will have access to cheap health insurance policies, there will be a board with powers to contract selectively with local insurers. This board will be mandated to get the best possible quality of coverage while preserving value for all Californians. It’s looking good for consumers whether they are buying in their own right or they get cover through their employers. To balance interests at this early stage, the Department of Insurance has approved some premium increases. Needless to say, local insurers are not impressed by this act of generosit

Given the mountain of evidence showing the link between nicotine and a range of usually terminal heath conditions, it’s perhaps slightly surprising cigarettes are still sold. When a product is so potentially lethal, the FDA or some other responsible government agency should step in with a timely ban. That tobacco is still sold in a variety of different forms says a great deal about the nature of our society. Perhaps prohibition would not be a success. When it was tried with alcohol, it simply made smuggling a good career choice. But whether it’s the power of the tobacco lobby or the lack of positive influence in the medical profession, there’s no sign of any formal limitation on the sale of the product. Smoking in public is increasingly limited, but anything more than that seems a step too far into the privacy of American citizens. It’s the right of all good Americans to kill themselves by whatever they do in their own homes. The medical profession does, of course, have a slight conflict of interest. Doctors have a duty to promote the health of their patients, yet many of the treatments for the diseases caused by tobacco are very profitable to hospitals, the drug and equipment manufacturers, and the doctors. If the healthcare services sector moved too aggressively into prevention, there would be fewer billable treatments for terminal patients.

According to the American Cancer Society, tobacco is the biggest cause of preventable death in the US, causing almost one-third of all cancer deaths. It’s therefore good to be able to report Medicare will now be paying for counseling smokers who want to quit. In the past, access to supportive talk was limited to those who had been diagnosed with one of the usually fatal smoking-related diseases. Now anyone older who wants to quit can be counseled on how best to do it. This is not to say that formal programs have such an impressive track record. Those that do little more than hand out patches and gum have poor success rates. One-to-one or small group counseling have the best outcomes. When the total cost for the treatment of tobacco-related diseases estimated estimated to be $200 billion over the next five years, anything that reduces the cost in human misery is to be applauded.

Now put this into context. One of the major problems with the current healthcare service is the rising costs of treatment. Although GOP politicians would like you to focus on the health insurance side of the equation, premiums only keep rising so fast because everything from drugs to medical devices to the pay expected by health professionals has been rising faster than inflation (despite the recession). So there we are searching the internet for quotes to find cheap health insurance when what we should really be supporting are all the initiatives to control or bring down the costs of treatments. Quitting smoking is not only good for us as individuals, it also saves the healthcare industry billions of dollars, savings that can all be passed on to us as reduced premiums.

Health Savings Accounts (or HSAs) have become a very popular form of health coverage these days because of their tax deduction policy and the ability to accumulate additional funds as a retirement plan. However, despite the numerous benefits customers get with HSAs, the main reason for thousands of Americans to choose this form of insurance over other option are of course the lower premiums. And to make the most out of your HSA here are some tips on how to get those premiums even lower.

1. Select an HSA-qualified plan to have lower increase rates.

In general the costs of insuring your health are constantly rising, despite the economical situation in the country. For group plans the average increase was about 10% during the last seven years, while individual plans had even more dramatic tendencies towards increase. On the other hand, HSAs had only 3.4% increase rate over the past year and many insurance companies report that claim costs with such accounts are much lower than with traditional insurance plans. Moreover, the premiums has clients pay out have dropped by almost 20% over the last two years, which of course is a very pleasant trade for those who have to pay out of their pockets.

The reason behind such trends is quite simple. People who use HSA plans tend to be more cautious and accurate when it comes to using the coverage. They are better informed and tend to make optimal decisions when dealing with own health. A simple choice of generic drugs over branded variations, which is quite common in HSA users, contributes to the lowering of rates and premiums.

2. Increase the amount of deductible with the increase of your HSA account.

Taking the accumulative nature of HSAs into account, the constant growth of the emergency funds allows increasing the deductible from time to time, as you don’t risk paying it out of pocket. And by increasing the deductible you lower your rates, which are initially less than those you have with typical individual and group health insurance plans. Moreover, the tax-deduction nature of such accounts offer great options for depositing more and more money with each year passing, that in turn makes the overall cost of an HSA even lower.

3. Keep up the good shape.

All group and individual health insurance plans are subject to rate increase from time to time. And unfortunately HSAs aren’t an exception. When your rates go up to the point you feel you’re overpaying, you can always switch companies for better rates. However, of your health condition isn’t quite good you may get even higher rates after going through the medical checkup for another plan. That is why it always pays to keep up the good shape and prevent any conditions from occurring.

Fact is that the vast majority of health conditions are caused by unhealthy lifestyle. Being physically active, having a balanced diet and avoiding numerous medications can prevent a lot of diseases and keep you healthy for a lot longer.

4. Compare health insurance quotes on a regular basis.

When renewal time comes, always make sure to compare the offers from other companies as well. It may turn out that switching to another company may give you far greater benefits and lower rates than staying with your current one. So it always pays to be up to date with the current situation on the local HSA market.

The game played by politicians is to take an idea from their own agenda and then frame it in a way that sells it to the other side. When the politicians meet in the middle, bipartisan solutions to problems emerge. This reflects the fact there is no monopoly on good ideas, only simple good solutions to difficult problems. In the healthcare debate, one of the solutions proposed by the GOP was to allow people to buy their insurance across state lines. This sounds a good idea. As the law stands, every state regulates the sale of insurance within its own borders. This limits the size of the market. If insurers had to compete with each other on a regional or national level, the premium rates would fall and every citizen would get a better deal. Well, let’s look a little more closely at how it would actually work.

At present, every state has a Department of Insurance to regulate the insurance companies licensed to sell policies. This is a reasonably effective system for consumer protection. But if regional or national insurers could sell policies into many states, it would break the regulatory system. It would no longer be local supervision of local companies. Insurers would decide where to establish and would, of course, choose the states which had the weakest consumer protection regulations, i.e. where they could make the most profit. Think banks and finance companies. These companies broke the US economy and produced the recession because their sales of subprime mortgages and associated derivatives were unregulated. Now apply the same thing to interstate insurance. As a final thought on this issue, remember all US states have different laws and one state cannot enforce another’s laws. That is sovereignty for you. So the state where an insurer is based cannot protect consumers under another state’s laws.

Secondly, opening the market across state lines allows insurers to cherry pick the best people to insure. Without regulations to limit the right to discriminate against people for pre-existing conditions and to increase premiums as people get older and fall ill more often, insurers will just take their profit from all the healthy people and forget about the rest. Thus, instead of increasing consumer choice, it would have the reverse effect. Most insurance companies would close their branches in individual states. Those that remained would keep all the aging and less healthy people. As their claims rise, the companies will make a loss and close. Without a law to mandate regional or national companies to offer some health coverage, it is likely the number of uninsured people would rise.

When you add all this up, it is a good thing the GOP’s proposal was rejected. Health insurance plans are complicated enough without having to change a whole mass of federal and state laws to allow interstate sales. This is not to say that consumers might benefit if there was more competition in the insurance market generally. With a real free market, properly regulated, consumers would get a better deal both in the terms of coverage and in the premium rates they pay. As it is, you must get multiple quotes to find cheap health insurance. Anticipating their profits will take a hit following this reform, insurers have been raising their premium rates. You must shop around to find the most affordable policy.

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.

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.

You want to insure your health and ask your insurance agent to offer you a good policy. You are given quotes and start thinking about buying a certain plan when the inevitable question is asked “What type of plan do you want to purchase?” This question has left many first-time insurance shoppers confused as they didn’t know about any plan types before. Too bad, because by choosing the type of insurance plan you will pay for determines how your coverage will be distributed as well as how your medical services will be provided. And as you may guess this is crucial when it comes to insuring own health.

But do not worry, this article will explain the essence behind each coverage plan type you can get in the US so the next time you will be asked the question of plan types you would choose the perfect plan to meet your requirements.

Health Maintenance Organization

HMO plans are the most popular type of managed care distribution these days. They provide a wide spectrum of healthcare services you can receive for a reduced fee or free of charge. But the main catch is that you can receive them only at specific locations and from specific professionals. And you will have to choose a primary care physician (PCP) who will refer you to other professionals when needed. Without your PCP’s affiliations you won’t be able to receive coverage for the services you took. Neither will you be covered for the costs if you address someone outside the network.

Preferred Provider Organization

PPO insurance coverage is quite alike to HMO. This type of managed care also requires you to choose a PCP, however you have more options when choosing this doctor. This is especially useful to those who have a good relation with their family doctors who might be outside the insurance company’s network. Moreover, you have fewer restrictions on out-of-network services, still you will eventually pay more for them if compared to in-network services.

Point of Service

POS health insurance plans also require you to choose a primary car physician. But you aren’t restricted to a network your insurance company has. Still, it will be impossible for you to get individual health insurance if you don’t get a referral from your PCP before visiting any other doctor.

Exclusive Provider Organization

EPO health insurance coverage is almost the same as HMO plans. There’s a PCP you have to get a referral from in order to visit a specialist and there’s a network of physicians and facilities you are limited to. The only difference is that you pay only for the services you received, while with HMO plans you have to pay a regular monthly fee.

Fee-for-Service

This type of insurance coverage is the oldest out there and least complicated to understand. You have no restrictions on where to get your care or whom to address. You only pay for the services you receive when needed. However, you get less coverage with such plans and your overall expenses tend to be higher than with managed care plans.

If you have ever dealt with health coverage plans you definitely know that there are various types of plans out there on the market, each of them having their special features, pros and cons. And it’s quote hard to say which plan type is better, because they all appeal to different customers and different situations. Just like you can’t say that coffee is better than tea, you can’t affirm that HMOs are better than PPOs. So if you are a bit confused with different plans and don’t know which one to choose, this short overview will definitely help you decide with type of health coverage to purchase when you decide you need one.

Health Maintenance Organization (HMO)

This plan type is probably one of the most popular and widely used amongst managed care plans. It delivers a very wide selection of services, including preventive care, regular exams, access to different specialists and medications. However, you are limited to a specific network of medical facilities and physicians you can receive services from. Moreover, you are required to choose a primary car physician (PCP) who will refer you to other specialists when needed. Otherwise, if getting your care outside the network or without your doctor’s referral you will have higher out of pocket expenses.

Preferred Provider Organization (PPO)

PPOs are practically identical to HMOs, taking the fact that you are also limited to a network of facilities and have to choose a PCP in order to receive care. However, you have more freedom when choosing your primary physician, which is especially helpful if you have a good relationship with your family doctor who is out of the network. And you usually get a wider network of facilities to receive care in. Still, any out of network services will be considerably more costly.

Point of Service (POS)

POS plans have strict rules concerning referrals. If you don’t have a referral to other specialists issued by your primary physician then you won’t be able to receive any cheap health insurance coverage at all.

Exclusive Provider Organization (EPO)

EPOs are very close to HMO and PPO plans. It’s the same type of managed care health insurance where you have to select a PCP and are limited to a network of hospitals and doctors you can get medical services from. But the main difference is that with EPO plans you pay for each visit to the doctor or service received when required in contrast to HMO plans where you have a monthly fee that should be paid constantly regardless whether you have used your coverage or not.

Fee-for-Service

Fee-for-Service is the oldest type of individual health insurance that was around ever since health coverage was introduced. With such plans you have total control over where to get your care and whom to address. You pay only for the services you receive and don’t need any referrals in order to get to a specialist. However, the fees are usually much higher than with managed care plans and many insurance experts say that the resulting out-of-pocket expenses are larger than the amounts of money you would spend on a managed care plan.

Now it’s up to you to decide which plan type works best for you. Analyze your situation, see what your options are and get the plan that would reflect your personal interest and would be most convenient to you personally.