Archive for September, 2012

Why Health Insurance Premiums Will Increase In 2014

September 21st, 2012

President Obama passed the health care reform over two years ago.  The law has been debated for just as long and will continue to be.  The Supreme Court ruled to upheld the law and kept most of it intact.  The biggest part being debated was the individual mandate.  After all was said and done, everyone will be required to have health insurance starting in 2014.  Only with a few exceptions, most will have to purchase health insurance by that date or they will face a fine.  More importantly, there is no pre-existing clause.  Meaning, no one can be denied health insurance because of their current health status.  So, if someone has terminal cancer, they will still be able to get health insurance to help pay for medical bills.  Now, there are two ways to think about this.  Of course, it is a great thing that those that are sick will not be denied health insurance.  One of the leading causes of bankruptcy is unpaid health insurance bills.  However, this benefit does not come without its consequences.

So, if no one can be denied health insurance; then what will stop the problem of adverse selection.  Meaning, carriers will draw more sick people than anticipated and this will drive up the cost of insurance…..for the healthy people as well.  Here is an example, someone just found out that they have cancer and they do not have health insurance.  Once they hear the news, they go and purchase the gaurenteed insurance and start to use it.  One year later, the cancer is gone and now the individual cancels their insurance policy because they would rather pay the fine on a yearly basis then the high monthly premium costs.  This example shows that the cost of the medical services to treat the cancer (surgery, radiation, etc.) was probably in the millions, and the premium collected by the carrier was probably in the low thousands.  So the math does not add up.  Who will make up the difference?  The answer is the healthy people.  This is the problem we will face in 2014, and why health insurance premiums will continue to rise in the coming future.

Receiving Medical Care Without The Stress

September 13th, 2012

Many people today worry that they might not have the right insurance plan in place.  There are many moving parts and many things to know when you buy health insurance.  For instance, you must know the difference between things like deductible, out of pocket maximums, carriers, etc.  Many questions we get are about these benefits and what really is the difference.  Well, the answer is straight forward but not very easy to decide on.  Usually, the higher the deductible you choose, the less expensive the insurance plan will be.  That being said, the benefits are not as rich and it might cost you in your pocket book if you start to utilize medical services a lot.

Healthier people choose higher deductible plans because they obviously use the doctors less, so they will and can take the risk.  If you are approaching higher age brackets, it might make sense to choose a plan with a lower deductible.  Yes, this plan may be more expensive than the average plan, but you will save money in the long run if you start to use medical services.  The main thing is to know your health history and choose accordingly.  That way, when you do receive care you know that you have the right coverage in place.

Adding Maternity Coverage To Your Plan

September 5th, 2012

In California, all individual and family health insurance plans added maternity coverage starting in July.  That is great news for a lot of people.  This is because, before, many plans did not offer coverage and the ones that did were very expensive.  Additionally, many individuals would wait until they were expecting a child and then apply for coverage.  Health insurance carriers viewed this as a pre-existing condition and many would deny coverage to the applicant.

Now, because of the health care reform, maternity coverage is included on the health insurance plans.  And the coverage is good because it covers the doctor visits, ultra-scans, and hospital stays.  An interesting fact about hospitals stays though, is that some hospital charges will actually be accessed on the child.  So its important that you add the new born quickly to the plan.  In California, most carriers give you 10-30 days to add the child to the health insurance plan.