Small Business Health Insurance Tips & Advice

House & Senate Bills ROB Tax Payers & How To Reform Health Insurance Smartly!

C. Steven Tucker (Small Business Insurance Services, Inc.) — Sat, 24 Oct 2009 15:19:14 -0500

House & Senate Bills ROB Tax Payers & How To Reform Health Insurance Smartly!

Well it's here! The massive 1,990 paged "Affordable Health Care for America Act". This is the "FINAL" Democrat Health Insurance "reform" bill (you know before they throw in another 800 pages of revisions). Dingbat Pelosi actually stated today that this bill "will not add a dime to the deficit". Not only will this bill add MILLIONS of dimes to our deficit, it is a Ponzi scheme that would make Bernie Madoff look like a philanthropist! This bill is an economy KILLER, a small business KILLER and middle class destroyer! Not only that, BUT it contains a "Public Option" and makes Individual Health Insurance policies ILLEGAL (by 2013)! It also brings BACK the disconcerting "End of Life Counseling"! Worse yet (& Liberals will LOVE this one) it MANDATES under penalty of law that EVERYONE must purchase HEALTH INSURANCE from the "evil" Health Insurance Companies! Maybe this is why Max Baucus has taken Hundreds of Thousands of dollars from Health Insurance companies since 2007? And what difference does it make whether the bill is under $1 Trillion when we have NO MONEY to pay for this? John Boehner tells us ALL ABOUT this bloated piece of Government special interest payola on the Greta Van Susteren show:

An even better assessment was made on 10/30/09 by Constitutional Attorney Mark Levin of the Landmark Legal Foundation.
Just incase you missed that. Here's a recap of just a FEW of the little gems nestled deep inside this 1,990 paged TRAINWRECK!

Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Flexible Spending Accounts) (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).

Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.

Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000
($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

All of this began last July, when the Congressional Budget Office scored the Democrat's HR3200 Health Insurance reform bill BEFORE Democrats snuck 75 "phantom" amendments in to the bill (which were NOT scored by the CBO). On October 7th, 2009 the CBO was then commissioned to score the 1502 paged Senate reform bill hilariously named America's Healthy Future Act of 2009. The assessment (at first) seemed to be more favorable than the earlier score given to HR3200 back in July. That is of course, until Price Waterhouse Cooper exposed the TRUE COST of the Democrat's Health Insurance reform bills. Let's just say the word ROB doesn't even begin to describe what an abject failure the Democrats "reform" bills would be. Moreover, not only will the bills NOT be deficit neutral, they will actually end up costing Tax Payers dramatically more for their health insurance For excellent in depth video commentary on Price Waterhouse Cooper's cost analysis please watch the informative video below:

Democrats have made it clear that they believe that health care is a "Fundamental Right". However, no one seems to be discussing the "fundamental rights" we LOSE under both of these bills. In fact, if it were not for Patriotic American Tax Paying Citizens voicing their INFORMED dissent at Town Hall Meetings across the country AND the ONE MILLION NINE HUNDRED EIGHTY SIX THOUSAND Patriots who showed up in Washington D.C. on 09/12/09. President Obama and a Democrat controlled House & Senate would have MOST DEFINITELY passed HR3200 in it's original UGLY form!

The sad truth is the vast majority of the population (and the majority of Senators) have not bothered to actually READ the 1,000 plus paged HR3200 bill or the 1,502 paged "America's Healthy Future Act of 2009. To save us time the U.S. Chamber of Commerce outlined the fundamental rights we loose under the HR3200 bill Click here to read their analysis. An even better in depth analysis was recently completed by...wait for it....an ACTUAL Insurance Broker with 22 years of experience in.....wait for it.....The Health Insurance Industry! What a concept! Consult with those who actually know what they're talking about! His excellent in depth analysis of the HR3200 bill can be found on his web site @ www.wrongreform.com

Regarding America's Healthy Choices Act. All you need to do is read Section 2203 entitled "Guaranteed Issue and Renewal For Insurance Plans" (starting on Page 19). In this section we enter in to what I like to call "Lawmaker La La Land" where not only must an Insurance company COVER ALL APPLICANTS REGARDLESS OF PRE-EXISTING CONDITIONS, but they also are PROHIBITED from charging ANYTHING EXTRA because of pre-existing conditions. For those that have no idea how health insurance works (like those in the Senate who actually wrote this ridiculous legislation) I'll quote (in part) directly from the Wall Street Journal article of 8/12/09.

"If insurers are forced to sell coverage to everyone at any time, many people will buy insurance only when they need medical care. This raises the cost of insurance for everyone else, in particular those who are responsible enough to buy insurance before they need it; they end up paying even higher premiums. And the more expensive the insurance, the less likely people will buy it before they need it.

That's one reason that only five states—Maine, Massachusetts, New Jersey, New York and Vermont—have Mr. Obama's proposal for "guaranteed issue" on the books today. New Hampshire and Kentucky repealed such laws after finding that they soon had an even smaller individual insurance market as companies fled the state.

Another proposed reform known as "community rating" imposes uniform premiums regardless of health condition. This also blows up the individual insurance market, by making it far more expensive for young, healthy or low-risk consumers to join pools—if they join at all. And if the healthy don't join risk pools, then premiums go up for everyone and insurers have little choice but to reduce their risk by refusing to cover those who have a high chance of getting sick, such as people with a history of cancer. This is why 35 states today impose no limits whatsoever on how much insurers can vary premiums and six states allow wide variation among consumers.

New York, New Jersey and Massachusetts have both community rating and guaranteed issue. And, no surprise, they have the three most expensive individual insurance markets among all 50 states, with premiums roughly two to three times higher than the rest of the country. In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799, respectively. Obama Care would impose New York-type rates nationwide."

So you see Health Insurance is about MANAGEMENT of RISK. Insuring everyone regardless of medical history and without charging anything extra is actuarially UNSOUND. Since Health Insurance companies have to be fiscally responsible, such practices lead to unmanageable risk and in turn unaffordable premiums. This is exactly why a Federal "Public Option" could NEVER POSSIBLY be considered "Healthy Competition". Why? Because insurance companies can not tap in to the Federal reserve when claims exceed revenue. A Federal "Public Option" would most certainly do so (as the Federal Government has been doing feverishly lately).

This is clearly NOT the way to "reform" our health care system and this is why we have seen predominantly Liberal news outlets like The New York Post, The Huffington Post, Salon.com and The Washington Post vehemently condemn President Obama's "Health Care"...er...."Health Insurance" reform plans. Whilst both parties (and most American's) feel that something has to be done. The question is, what is the best course of action? There are still those who actually believe that a "Single Payer" system would be the best option. The President does not agree, although he clearly stated his support for such a system prior to his election. Now, he is promoting the aforementioned "Public Option" which by all estimates will cost the U.S. Tax Payers between $1 and $2 Trillion over the next decade! Not to mention what happens AFTER the first decade!

As Investors Business Daily stated in their 07/31/09 article a Public option will most definitely not work. In fact, it's not about choices. It's about Government control of our health care decisions. This being the case, a Public Option is most definitely not the way to reform the U.S. health care system. This is why Congressman Mike Rogers of Michigan spoke with such passion at a Senate hearing this week regarding President Obama's Health Insurance "reform". After actually READING the bills, he had some genuine concerns and he was not afraid to voice them and boy did he EVER voice his concerns!

For those of you old enough to remember Jack Webb, you will thoroughly enjoy his thoughts on President Obama's plans here:

Nevertheless, we still definitely need health care reform on many levels and if Government must play a part, there are intelligent things they can do. Here’s where they can actually help:

Eliminate the ridiculous State imposed Mandates that PROHIBIT Health Insurers from offering coverage in EVERY SINGLE STATE! For example, Small Businesses in California have roughly 6 (yes that's six) options for Health Insurance. Yet there are 1,300 Health Insurance companies in America! States like Colorado FORCE carriers to cover "substance abuse" which DOUBLES the Health Insurance premiums in Colorado (you can now waive "substance abuse" coverage and your premium is subsequently reduced BY HALF!). This kind of State Mandate (and so many more) is what prevent the majority of Health Insurance carriers from offering their products in every State.

Basic economics 101 teaches us that NOTHING increases quality and drives down prices LIKE COMPETITION! How can we increase quality and competition when we stifle it by imposing ridiculous mandates that inhibit competition from the get go? All 1,300 Health Insurance carriers should be able to offer ALL of their products in EVERY SINGLE STATE. This way if you do not like your current coverage you have 1, 299 OTHER OPTIONS. With that many options available, carriers are NATURALLY FORCED BY THE RULES OF COMPETITION AND FREE MARKET ENTERPRISE to IMPROVE not only the quality of their products but to also improve their customer service OR THE CONSUMER WILL PURCHASE their Health Insurance from 1,299 other carriers! It's as simple as that! Also, actuarial tables teach us that the more lives that are in the pool, the lower the premiums for all. How much lower could premiums be if everyone in EVERY state had 1300 carriers to choose from? Things that make you go HMMMMMM???

Instead of bailing out GM with Billions of our blood sweat and tears and then letting them file bankruptcy 3 months later. Why not fund a NATIONAL High Risk Pool for those who are rendered uninsurable? We already have such State run High Risk Health Insurance pools in the majority of States. These Risk Pools will cover anyone regardless of their medical history. The problem is they are under funded so the premiums are extremely high. Instead of spending $1.6 Trillion to insure only 11 Million of the 45 Million uninsured. LEAVE the bulk of the nation's risk where the money is, namely with the insurance companies. Then provide a National Federal & State funded Risk Pool for those who are rendered uninsurable. Since the uninsured far outweigh the uninsurable, this would cost far less than the currently proposed $1.6 Trillion over the next 10 years.

Update the outdated Health Insurance Portability laws (regarding credit for pre-existing conditions) to INCLUDE Individual Health Insurance Policies. As it stands now, HIPAA law allows an insured to move from one "Employer Sponsored Group Health Insurance Plan" to another "Employer Sponsored Group Health Insurance Plan" and receive FULL coverage for "pre-existing" conditions so long as they can prove to the new carrier that they have had 18 months of prior coverage with no lapse of more than 63 days. Millions of American Entrepreneurs have chosen to leave Corporate America and strike out on their own since these archaic laws were written in the 1980's. As the face of our work force changes so too should the laws that protect it. Most especially since these entrepreneurs shoulder the BULK of the nation's risk and PAY the bulk of the nation's tax load! Throw them a legal bone!

Educate the American consumer about the primary reason for the high cost of health insurance! Namely, LOW DEDUCTIBLE, LOW CO PAY (a.k.a. Traditional) Health Insurance. NOTHING drives up the cost of Health Insurance like maintaining a low deductible, low co pay plan. Instead, offer new more intelligent option to the American Consumer like "Consumer Driven Tax Qualified Health Insurance". There simply is no more intelligent or cost effective way to insure anyone. The sad part is, these Consumer Driven Tax Qualified concepts have been around for more than a DECADE! Yet, only a small minority of the American population has even explored these intelligent (& much lower priced) Health Insurance alternatives. Those that have, are WAY AHEAD of the rest of population when it comes to managing medical risk.

I would say weed out the 12 million Illegals (that we know about) who are sucking our Medicaid system dry...but as Congressman Joe Wilson so aptly stated, Obama CLEARLY wants to "provide a PATH TO CITIZENSHIP for the 10 to 12 million Illegals in our country". Once they're legal, he can then cover them ALL on our tax dollar! So YES his plan IS to cover Illegals, he'll just make em legal first! Think they're not sucking our Medicaid system dry? Just visit California or Illinois. Good old “Blago” enrolled thousands of Illegals in to our Medicaid system, thereby running the program in the ground & leaving our Illinois Medicaid system approx. $1.5 BILLION behind in payment of claims to physicians who have been providing “free” care to all illegals who were lucky enough to flock to the State of Illinois to insure themselves for “free”. In fact, according to the U.S. Census Bureau 10 to 12 Million of the Uninsured in America are illegal aliens. Who comprise the rest? Find out here.

TORT REFORM! This is one area of reform that is rarely spoken of by the Liberal left. Medical malpractice liability forces providers into practicing defensive medicine. In other words, it causes medical practitioners to order multiple expensive (and often times unnecessary) tests and procedures "in defense of" potential lawsuits, JUST IN CASE they miss something in a patient's case. All for fear of being sued for ridiculous amounts in a malpractice lawsuit. Limiting liability lawsuit awards to reasonable amounts will deter those who seek the "big pay day" by filing frivolous lawsuits against medical practitioner.

Establish a Federal oversight committee to regulate and hold accountable physicians who make medical mistakes. What’s one of the biggest reasons why health care is so expensive? Hint: It’s not “rich CEO’s” and “outdated medical records transfer processes.” It’s Medical Mistakes! Here’s the real facts you won’t find in the media outlets:

1994: Five years after a groundbreaking Institute of Medicine report focused attention on medical errors in hospitals, Americans say that they do not believe that the nation’s quality of care has improved. In fact, 1 out of 3 patients states that they have experienced a serious medical error http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.534

1995: A Study published in the Journal of American Medical Association (JAMA) found that only two percent of medication errors that occurred during the medication administration process were intercepted.
a. More people die from medication errors than from work place injuries
b. Medication errors account for approximately one out of 131 outpatient deaths and one out of 854 inpatient deaths.

1999: Institute of Medicine (IOM) releases its first report on healthcare quality and medical errors. http://www.iom.edu/?id=12735 The Study finds in part that:

    a. Medical errors are responsible for injury in as many as 1 out of every 25 hospital patients.
    b. Between 44,000 and 98,000 Americans die each year from preventable medical errors in hospitals alone.
    c. The deaths from preventable medical mistakes are equivalent to the number of people who would die if a jumbo     jet crashed EACH AND EVERY DAY OF THE YEAR, and all its passengers died!
    d. Medical errors cause more deaths than motor vehicle accidents, breast cancer or AIDS…..and this study is TEN     YEARS OLD and STILL no Federal oversight committee! Oh wait! It gets worse!

2002: A Study issued by the United States Pharmacopeia (USP) concluded that more than 200,000 medication errors occurred during 2002

2004: CDC reports that 90,000 patient deaths occur each year due to patients contracting hospital acquired infections. http://www.cdc.gov/ncidod/dhqp/pdf/nnis/2004NNISreport.pdf
a. Many hospital acquired infections are caused by health care workers who fail to wash their hands in between patients.

2006: Studies assessing the state of hospital patient safety conclude that current progress is slow, results in general are at best modest, and the gap between the best possible care and actual care remains large. http://www.healthgrades.com/media/dms/pdf/PatientSafetyInAmericanHospitalsStudy2006.pdf

More Facts:

Preventable medical errors result in extended hospital stays, expensive treatment for chronic medical conditions and astronomical medical costs that are associated with treating debilitating life-long illnesses. Some experts state that these costs may be in the range of $150-200 Billion dollars per year. Gee, where else could we spend that money??? Quick reminder:

ALL of the aforementioned happened under the nose of our Federal Government. And we want them to regulate Health Care?? Let’s not save ALL of our anger for the “greedy” insurance companies and “over paid” doctors and CEO’s. Let’s focus our Anger on our GOVERNMENT who has allowed this systemic problem to continue over three administrations!

Ask yourself, why does the health care industry basically regulate and report on itself? Why is certification and accreditation voluntary? Why don’t we have a Federal agency that acts like the FAA and investigate medical mistakes, just like airline accidents or near misses? Why do only some states have mandatory reporting requirements of medical errors? All Good Questions that need to be answered before we hand over our very health freedoms to the same Government to “regulate”.

In summary, REAL healthcare reform can be accomplished through consumer education, weeding out abuse of existing Federal entitlement programs (via a legitimate needs assessment) and increased funding and expansion of existing State sponsored Risk Pools so that people who are declined for insurance have an affordable option to continue coverage if declined on the individual major medical market. Following these few simple steps will go a long way towards not only maintaining our current health care system, but also towards keeping the bulk of our nations risk where it belongs, namely with the private health insurance industry. In light of the recent multi Trillion Dollar "Bail Outs" and many other failing corporations coming to the table with their hats in their hands (and their private jets on the tarmac) the last thing our government should do is start cutting more blind "bail out" checks in an effort to "reform" the U.S. health care system.

But hey what do I know? The video below sure makes Government sound wonderful! I mean just look at their track record!

What this Administration (and others before it) do not seem to understand are the basic fundamental principles and guidelines our Founders knew long before our current fiscal insolvency. For a refresher course on the wisdom of our Founders watch this:

By the way, unlike the lies told by the Democrats. Conservative Republicans DO HAVE a plan to reform our nation's health insurance system. It is called the "Empowering Patient's First Act" or HR3400.

About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.

Ten Questions You Should Ask Your Health Insurance Agent BEFORE You Buy A Policy

C. Steven Tucker (Small Business Insurance Services, Inc.) — Sun, 26 Apr 2009 15:56:15 -0500

If you are a business owner, self-employed or an employee of a company that is not offering medical coverage though your employer, you may have to undertake the frustrating, daunting and time consuming task of purchasing health insurance on your own. If this is the case, there are certain things that you can do become an informed consumer so you can ensure that you are purchasing the type of health insurance coverage you really need at a price you can afford.

When you purchase a health insurance plan, it is important that you balance four important variables:
wants, needs, risk and cost, before you spend your money.

Although you may "want" a health plan that offers you 100% coverage and a $5 Copay for prescription medications, you may not "need" this type of health plan if you are healthy, take no medications and do not have any significant health related "risk" factors.

Since a 100% health plan will "cost" significantly more than an 80/20 Plan, it may not be in your best interest to pay higher monthly premiums for 100% coverage if you are currently healthy.

Although no one knows exactly when they will actually use their insurance coverage, considering these four key variables prior to purchasing a health plan is a good rule of thumb.

It is also critical for health insurance consumers to understand that all plans, even 100% Plans, have some form of coverage limitations. Knowing what your policy DOES NOT cover, is more important than knowing what it DOES cover.

The following is a list of 10 key questions that should help health insurance consumers to better understand the coverage limitations of the plans they are considering purchasing. Make sure you ask your insurance agent these questions BEFORE purchasing a health insurance policy.

1. What insurance company do you represent and are you a "captive" agent, "independent" agent or an insurance "broker?" "Captive" agents represent ONE insurance company's products only.

An "independent" agent or insurance "broker," on the other hand, typically represent many quality insurance carriers and can sell a variety of different insurance products without any contractual restrictions.

BEWARE! Dealing with a "captive" agent may limit your choices, since these agents can only sell that particular insurance company's health plans.

2. What is the plan's calendar year Deductible and would I have to pay a separate deductible for each family member if everyone in my family became ill at the same time? The majority of health plans have a per person calendar year deductible, for example, $250, $500, $1,000, or $2,500. Some plans are designed so in a "worse case scenario" only two family members will have to pay their deductible in any given calendar year.

BEWARE! Some plans will require each person in the family to pay their calendar year deductible. This can be a huge financial burden if everyone in the family was involved in an accident or if members of the family became ill at the same time. Many plans have a separate drug deductible before the plan will pay for any medications. Make sure you know what deductibles you will be responsible for before you buy a health plan.

3. What is the plan's Coinsurance percentage and what Stop Loss Number is this percentage based on?

These percentages are typically based on a specific dollar amount, known as the "stop loss number." Here's where it get's tricky. Quite often, health insurance plans have different "stop loss numbers". I have seen some plans that have a "stop loss number" as low as $2,000 and as high as $25,000 or some with none at all.

Let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $1,000 deductible and an 80/20 split of the first $5,000 ("stop loss number.")

$1,000 + 20% of $5,000 ($1,000) = A Maximum Out of Pocket of $2,000.

Now, let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $250 deductible and a $10,000 "stop loss number."

$250 + 20% of $10,000 ($2000) = A Maximum Out of Pocket of $2,250. (Note: Total does not include any separate "service deductibles" or access fees. Many low quality plans also have these.)

Again, after this brief 80/20 cost sharing with the insurance company, also know as a the coinsurance percentage split, most major medical plans will pay 100% of in-network covered charges up to the Lifetime Maximum amount that is specified in the policy.

BEWARE! Some policies on the market are sold with NO stop loss, but still list a coinsurance percentage. Therefore if you purchase an 80/20 with no stop loss, you will actually be paying 20% of all of your medical bills each calendar year. So unless you want to be responsible for 20% of all of your bills, make sure you find out what the "stop loss number" is BEFORE you purchase a health plan!

4. What is the plan's Maximum Out Of Pocket Expenses per year? This expense is a total of all deductibles, plus all coinsurance percentages, plus all applicable "access fees", "service deductibles" or other "fees" outlined in your policy.

BEWARE! Quite often agents neglect to tell prospects about hidden fees, so make sure you have a good grasp on the basics, like deductibles, coinsurance & stop loss numbers. Always ask about additional "fees" BEFORE you purchase the plan!

5. What is the plan's Lifetime Maximum Benefit if I become seriously ill and does the plan have any "per illness" maximums or caps? The majority of health insurance plans have a two million or five million dollar Lifetime Maximum Benefit. The Lifetime Maximum Benefit is the maximum amount the insurance company will pay if you or someone in your family becomes seriously ill.

BEWARE! Some policies will stipulate that there is a maximum benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for the five million dollar Lifetime Maximum Benefit. Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I., endorsed and promoted by the National Association for the Self Employed (N.A.S.E) and the Alliance for Affordable Services are known for selling "schedule" plans with "per illness caps."

6. Is the plan a Schedule Plan, in that it only pays a certain amount for a specific list of procedures? Some health plans only pay a specific dollar amount for certain procedures, despite the fact that the procedure often cost more than the plan stimulates.

BEWARE! Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I., endorsed and promoted by the National Association for the Self Employed (NASE) and the Alliance for Affordable Services are known for selling "schedule" plans.

7. Does the plan have unlimited doctor copays or is there a limited number of doctor copay visits allowed each year? Many quality plans have no limit on the number of times you can use your doctor copay.

BEWARE! Several plans have a limit of how many times you can go to the doctor each year for a Copay. Quite often, the limit is 2-4 visits per year.

8. Does the plan offer Prescription Drug Coverage and if it does, what type of coverage? Some plans offer prescription drug benefits on both generic and brand name medications right away. Other plans will require you to pay a separate outpatient prescription drug deductible before you can obtain your prescription medication for a Copay.

BEWARE! Today, many plans offer NO outpatient prescription drug Copay options. Typically, these plans only provide the insured with a discount prescription card which only offers the insured a 10-20% discount on prescription medications. This can lead to catastrophic out of pocket expenses to the insured.

9. Does the plan have any reduction in benefits for Organ Transplants and if so, what is the maximum the plan will pay out for an organ transplant? The majority of quality major medical plans treat organ transplants as any other illness. This means that the insurance company will cover the insured until the Lifetime Maximum Benefit of the plan is reached. Again, in most cases, this Lifetime Maximum is five million dollars. You should accept no less than one million dollars of coverage for Organ Transplants.

BEWARE! Today, some plans only pay a $100,000 maximum benefit for organ transplants. Plans that offer limited organ transplant coverage are extremely risky, since organ transplant procedures often range in the neighborhood of $350-$500K. In addition, it is not uncommon for a transplant patient to need a second organ transplant. Keep in mind, that the $100,000 maximum payment for organ transplants on many plans also includes the cost of expensive anti-rejection medications. If you have an organ transplant, you will quickly reach the $100,000 maximum benefit, which means that you will be required to pay for costly anti-rejection medication out of pocket. This can lead to catastrophic out of pocket costs to the insured.

10. Does the plan have any separate "services deductibles" or "access fee" for each hospital admission or for each outpatient test? Some plans, like Assurant Health's "CoreMed" plan have a separate $750 hospital admission fee for the first three days of each hospital stay. These hospital admission fees may also be called "Access Fees" on other policies. Typically the insured is responsible for paying these access fees for each hospital admission in addition to their calendar year health plan deductible.

Many plans also have a separate deductible for emergency room visits. These deductibles are in place to discourage policyholders from using the emergency room as a doctor's office. Typically, these ER deductibles are waived if the patient is admitted to the hospital.

BEWARE! "Access fees" and "service deductibles" are separate from your plan's calendar year health plan deductible. Be aware that many plans now have benefit "caps" or "access fees" for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. These "benefit caps" could be as little as $500 for each out-patient treatment, which will leave the insured responsible for the remaining balance that is over $500.

Again, "access fees" are additional fees that you may have to pay per treatment before the insurance company will pay the provider. These fees can quickly add up. For example, if you need to have 40 outpatient chemotherapy treatments, and you must pay a $250 "access fee" per treatment, you would have to pay an additional 40 x $250 = $10,000.

Remember, purchasing a health plan is the most important purchase you will ever make. Insist that your insurance agent explain to you exactly what your health plan does and does not cover and take the time to read the "fine print" in the plan brochure and ask questions about terminology you don't completely understand.

In addition, when you receive your health insurance policy in the mail, don't just detach your insurance cards and place them in your wallet or purse and then throw your insurance policy in your desk drawer or filing cabinet. Take the time to sit down and read your policy page by page.

Once you receive your policy, you have a 10-day free look period, so if your coverage is not what you thought you purchased, you have time to call the insurance company and cancel the policy without incurring any fees.

Finally, if your being pitched a health plan that seems too good to be true (e.g. all pre existing conditions are covered, the plan is significantly cheaper than all other plans) contact your state's Department of Insurance BEFORE you buy the policy. Your state's Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policyholders.

Remember, if you suspect that your being scammed or you think the agent is trying to sell you a fraudulent insurance policy, (e.g. you have to become a member of a union to qualify for coverage) your state's Department of Insurance can also check to see if any prior disciplinary action has been previously taken against that agent.

Whatever decision you make in regards to your health insurance, please always remember to heed the following words of wisdom.

"If it sounds too good to be true, it probably is!" ..........and
"If you only buy on price, you get what you pay for!"

United Health Care Now Sells Insurance For Health Insurance.

C. Steven Tucker (Small Business Insurance Services, Inc.) — Wed, 17 Dec 2008 11:43:55 -0600

United Health Care now offers the "Continuity" plan. The "Continuity" plan is a concept enacted by the CEO of United Health Care & its subsidiary Golden Rule Insurance company. The concept is a brilliant one indeed because one of the greatest challenges to all health insurance brokers is the struggle to maintain "Guaranteed Insurability" for clients who have been diagnosed with a host of conditions such as Diabetes or Cancer. The onset of either one of these illnesses (and many more) will render one "uninsurable" on the individual major medical market. This can become a very serious problem if one looses their employer sponsored group coverage and can not either afford their State's risk pool coverage, or they do not live in a State that provides a State Insurance Risk Pool.

The "Continuity" plan resolves this problem by allowing insurable consumers to purchase any plan that United Health Care/Golden rule offers at only 20% of the normal required premium for that plan. Consumers can purchase this plan whilst they are covered by an employer sponsored group health insurance plan that offers them Guaranteed Insurability. Whilst the consumer is still insured by their employer sponsored group plan the United Health Care policy of their choice goes in to a "dormant" state. In other words, the policy remains in force as long as the insured pays only 20% of the required monthly premium for that product.

The moment that the consumer looses employer sponsored group coverage, or is faced with a hefty Cobra continuation premium. They can then elect to "awaken" the policy out of its "dormant" state and the policy will then begin to cover them on a Guaranteed Insurability basis without the need for underwriting. This means that if a consumer were to develop a major medical condition that would render them uninsurable on the individual major medical market whilst the "Continuity" plan was in its "dormant" state, their pre existing conditions would continue to be covered seamlessly from day one once the consumer elects to "awaken" their "Continuity" coverage. Once the policy is "awakened" the insured would now have to pay the entire monthly premium required to maintain that individual health insurance policy. But as anyone in the industry knows, individual policies often require a fraction of the premium that is required to maintain a Cobra continuation plan.

Once the insured has retained another employer sponsored group plan that provides Gauranteed Insurability (presumably by securing another employment position) then the policy goes back in to its "dormant" state and the premium is subsequently reduced to only 20% or the required monthly premium. Essentially this concept allows any consumer to "float" in and out of employer sponsored group coverage whilst also maintaining the all important "Guaranteed Insurability" clause so valuable to those who have been rendered "uninsurable" on the individual major medical market. For more about this brilliant concept click here.

To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.

Note: This policy may not be available in some states.

Cobra continuation: Is there a more affordable health insurance option?

C. Steven Tucker (Small Business Insurance Services, Inc.) — Sat, 22 Nov 2008 17:01:33 -0600

If you are not familiar with the new "American Recovery and Reinvestment Act Of 2009" then you need to learn more at the U.S. Department of Labor web site. In a nutshell, this new Federal Act entitles you to a 65% reduction in your monthly COBRA continuation premium if you lost your job after September 1^st, 2008. Granted it only lasts for 9 months, but it is most certainly going to help millions of American's who have lost their employer sponsored group health insurance coverage.

However, there are "strings attached," for those who earn more than $125,000 or $250,000 for married couples filing a joint federal income tax return, in that, if your income meets or exceeds these amounts, you may have to repay all or part of the premium reduction. Therefore, if you are in a higher income bracket, you may wish to consider waiving your right to the premium reduction as it may increase your income tax liability for the year. For more information on how higher income earners are affected by this Act, please refer to the March 25, 2009 Issue of Forbes Magazine.

But, what if you decide to elect COBRA? The question then becomes, "What do you do after the 9 month COBRA subsidy expires or when your COBRA runs out altogether?" Luckily, there are several lower cost alternatives to paying high priced COBRA continuation premiums. And, depending on what state you live in, there may be other health insurance options that you can select when your 9 month subsidy expires or when COBRA finally runs out at the end of 18 months. They are as follows:

State Continuation of Coverage
Individual Health Insurance Policy
Small Group Health Insurance Plan
State Risk Pool Coverage

Let's take a look at these alternative plans:

1. The first option is "State Continuation of Coverage." Many States offer State Continuation of Coverage. While State Continuation of Coverage does not follow Cobra continuation laws, it does allow you to continue your employer sponsored group coverage for up to 9 months even if your former employer employed less than 20 employees. This law does not apply to self-funded plans, so make sure to check with your State's Department of Insurance to see if your State mandates State Continuation of Coverage.

2. The second option, an "Individual Health Insurance Policy" is typically the best and most affordable alternative for relatively healthy individuals. An individual health plan can be purchased at any time and is a great way to maintain many of the same kinds of benefits that you had through your former employer's sponsored group health plan.

However, an Individual Health Insurance policy has to be "underwritten" before it is issued. During the "underwriting" process, the insurance company scrutinizes the applicant's health history to determine if it will extend an offer for insurance coverage. This process allows the insurance company to "decline" coverage to applicants with serious pre-existing or chronic medical conditions or to modify the coverage it extends to the applicant.

Today, the "Individual" health insurance market has become quite competitive; therefore, many insurance carriers are willing to offer health insurance coverage to individuals with certain controlled pre-existing medical conditions, like high blood pressure or high cholesterol.

Other times, the insurance company will offer the applicant coverage, but will refuse to cover a specific body part or pre-existing condition. In these cases, the insurance company issues what is known as an "exclusion rider." An exclusion rider is a way for the insurance company to exclude coverage for a specific body part or a specific medical condition (e.g. right knee, uterine fibroids). Exclusion riders can be permanent (body part or condition excluded coverage for the life of policy) or temporary, (body part or condition excluded coverage for a specific period of time.)

Often, if an exclusion rider is placed on a body part and the insured receives no further treatment on that body part or if the rider is in place to exclude a pre-existing medical condition and the insured's condition completely resolves, the policyholder can request that the insurance company remove the exclusion rider from the policy. Typically, requests to remove a rider can be made after one or two years. Ultimately, the insurance company will makes the final decision on whether the exclusion rider will be removed.

A HSA qualified HDHP (Health Savings Account qualified High Deductible Health Plan) may offer a more affordable consumer-driven healthcare option to individuals that are searching for a health plan with very low monthly premiums. Typically, these plans offer policyholders greater flexibility and control in where their health care dollars are spent. Plans often come with a fixed aggregate family deductible, which mean that a separate deductible does not have to be met for each family member on the plan.

In addition to the significant cost savings, policyholders can fund their Health Savings Account (HSA) to pay for routine medical expenses or alternative medical therapies, like acupuncture. Any money in the HSA that is not used for medical expenses can be rolled over to the next year and excess funds can be transferred to a tax deductible, tax deferred, interest bearing account, commonly referred to as a "Medical IRA." These types of health plans can offer tremendous tax advantages to policyholders. Not only can policyholders save money on their health insurance premiums, but they also can use this savings to build a nest egg for retirement. Many HSA administrators now offer thousands of no load mutual funds to transfer your HSA funds into so you can potentially earn an even higher rate of interest.

For more information on HSA qualified HDHPs, click here.

3. The third option is a "Small Group Health Insurance Plan." This type of plan can be purchased immediately and might just be what the doctor ordered for those individuals that that have been "declined" coverage for an "Individual" health plan. It might also be another option for individuals who are looking for coverage without an "exclusion rider" on a pre-existing medical condition because group health insurance provides "guaranteed insurability," which means that all applicants and their families will receive health insurance coverage for all pre-existing medical conditions.

Because recent layoffs and a tough job market have created opportunities for many professionals thinking about starting their own business, here are a few things to keep in mind when considering group health insurance coverage. Typically, a company must have a minimum of two employees. Insurance companies typically allow husband and wife to enroll separately so the two-employee minimum can be met. The company must have a Federal Tax ID number, which means that sole proprietors, will have to incorporate, unless they have an existing business with a Federal Tax ID. To qualify for a small group plan, at least two of the employees on the plan must work a minimum of 30 hours per week and must receive a wage for the 30 hours worked.

On a Small Group Health Insurance plan, a large portion of the monthly premiums are determined by the health status of those individuals participating in the plan. Even if only one individual has a serious medical condition, that individual's condition is likely to adversely affect everyone's health insurance premiums. This means that even healthy group participants will pay a higher monthly premium. It may also mean that premiums can increase dramatically (up to 300% higher or more depending on your State) if someone covered on the group plan develops a serious condition or if an individual with a serious medical condition is hired at a later date.

This is important to keep in mind if your business is likely to grow, as your insurance contract may require you to offer new employees health insurance benefits and also require the corporation to pay a portion of your employees health insurance premiums.

The main advantage of a Small Group Health Insurance Plan is that it provides seamless continuation of coverage for those individuals who have pre-existing conditions such as Diabetes or Cancer providing that they have a minimum of 18 months of prior continuous health insurance coverage with no lapse in coverage of more than 63 days.

4. The forth option is a "State Insurance Risk Pool." This option is primarily for individuals who have serious medical conditions and who have been "declined" individual health insurance coverage. Many states, but not all, provide individuals with pre-existing conditions the opportunity to obtain seamless continuation of health insurance coverage after their COBRA continuation expires, or if they lost their employer sponsored group coverage due to a policy cancellation and they were unable to obtain an individual health insurance policy on the open market because of their pre-existing conditions.

State Insurance Risk Pools often offer immediate coverage to individuals that would normally render someone "uninsurable" on the individual health insurance market. To qualify for a State Insurance Risk Pool, applicants have to show "proof of credible coverage" for a minimum of 18 months prior to application, with no lapse in coverage of more than 63 days. Although Risk Pool coverage is also available to those who have been "declined" coverage on an Individual Health Insurance policy, there is usually a 6 or 12 months waiting period before preexisting conditions will be covered if the applicant fails to show "proof of credible coverage." To find if your state has a State High Risk Insurance Pool, click here.

In all cases, Individuals should keep in mind when deciding whether to continue their health insurance coverage under COBRA that they will continue to pay for a health plan that was designed and purchased by someone else; specifically, their former employer. In addition, great portions of the COBRA premiums they pay are dependant, and will continue to be dependant, on the health status of their former employer's group.

Since the majority of employer sponsored group health plans have a low deductible, monthly COBRA premiums will be significantly higher. Therefore, it is prudent for anyone considering COBRA continuation coverage to explore all of their health insurance options, especially an "Individual" Health Insurance Policy.

This is especially true if one is healthy and rarely goes to the doctor and continues a their employer sponsored group health plan that offers a $20 Copay for doctors visits and a $15 Copay for prescription medications. If these are benefits that the individual is not likely to use, they might want to think twice before selecting COBRA continuation coverage.

In fact, healthy individuals can usually reduce their COBRA premiums as much as 50% or more by purchasing an Individual Health Insurance policy with a higher deductible. Furthermore, families can experience dramatic savings and have more control over their health care expenses by purchasing an HSA qualified HDHP.

Regardless of the decision, it is important for consumers to explore all of their healthcare options prior to making a purchasing decision. Taking the time to perform your own due diligence before making a health insurance selection may not only save you money, but it may save your life.

To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.

Universal Healthcare: Would it really work for the U.S.?

C. Steven Tucker (Small Business Insurance Services, Inc.) — Mon, 17 Nov 2008 18:49:56 -0600

Since there are so many ideas on the table as to how to reform our Nations Health Care System, it is difficult to know what the right course of action is. Most especially when you are on the outside looking in. Recently ABC's 20/20 program did an in depth study of this issue. The result of which clearly outlined the problems with the U.S. Health Care System and what needs to be done on a National scale in order to truly reform our Health Care System. If you have not seen the 20/20 episode entitled "Sick in America" with John Stossel. Please take the time to watch all 6 videos and the short but insightful documentary films below. It will take about 45 minutes of your time but it is well worth it to know what's really going on and what can be done right now to truly reform the U.S. Health Care system. Most importantly it can all be done without spending Trillions of U.S. Tax Payer Dollars. In fact, it will SAVE us money!

Sick in America" (Part 1 of 6)

"Sick in America" (Part 2 of 6)

"Sick in America" (Part 3 of 6)

"Sick in America" (Part 4 of 6)

"Sick in America" (Part 5 of 6)

"Sick in America" (Part 6 of 6)

A common example used to further the cause of adopting a Single Payer system in the United States is to point out how well it is working in countries such as France and Canada. 20/20 touches on this in the above episode. However, very few have done a more in depth study of Canada's Single Payer system than documentary film maker Stuart Browning. For even more about what is really going on with the Canadian health care system please watch his short but very informative documentary videos below. Again, well worth your time.

What's it like JUST TO SEE A DOCTOR with Canada's Single Payer System? Watch Steven Crowder's hidden camera video:

Health Broker - Rick Baker (featured in the above film) asks you to help stop Congress from adopting Canada's system by signing the petition at www.freeourhealthcarenow.com Please help secure your rights to your own health care choices.

Why is Rick so passionate about his plea for your help in stopping the adoption of a Government Run Health Care System for all Americans? Because certain "progressive" states have already adopted such State Run Health Care Systems. Take a look at what happened to Barbara Wagner who was a victim of the "Oregon Public Health Insurance Plan". When Government runs ANYTHING it's all about price containment and not the Health & Welfare of the Patient.

Medical care in the United States is derided as miserable compared to health care systems in the rest of the developed world. Economists, government officials, insurers and academics alike are beating the drum for a far larger government role in health care. Much of the public assumes their arguments are sound because the calls for change are so ubiquitous and the topic so complex. However, before turning to government as the solution, some unheralded facts about America's health care system should be considered, says Scott W. Atlas, a senior fellow at the Hoover Institution and a professor at the Stanford University Medical Center.

Americans have better survival rates than Europeans for common cancers:

Breast cancer mortality is 52 percent higher in Germany than in the United States, and 88 percent higher in the United Kingdom.

Prostate cancer mortality is 604 percent higher in the United Kingdom and 457 percent higher in Norway.

The mortality rate for colorectal cancer among British men and women is about 40 percent higher.

Americans have better access to treatment for chronic diseases than patients in other developed countries:

Some 56 percent of Americans who could benefit are taking statins, which reduce cholesterol and protect against heart disease.

By comparison, of those patients who could benefit from these drugs, only 36 percent of the Dutch, 29 percent of the Swiss, 26 percent of Germans, 23 percent of Britons and 17 percent of Italians receive them.

Lower income Americans are in better health than comparable Canadians:

Twice as many American seniors with below-median incomes self-report "excellent" health compared to Canadian seniors (11.7 percent versus 5.8 percent).

Conversely, white Canadian young adults with below-median incomes are 20 percent more likely than lower income Americans to describe their health as "fair or poor."

Americans spend less time waiting for care than patients in Canada and the United Kingdom:

Canadian and British patients wait about twice as long -- sometimes more than a year -- to see a specialist, to have elective surgery like hip replacements or to get radiation treatment for cancer.

All told, 827,429 people are waiting for some type of procedure in Canada.

In England, nearly 1.8 million people are waiting for a hospital admission or outpatient treatment.

Source: Scott W. Atlas, "10 Surprising Facts About American Health Care," National Center for Policy Analysis, Brief Analysis No. 649, 3/24/09 http://www.ncpa.org/sub/dpd/index.php?Article_ID=17770

Because of how the Single Payer System is designed, citizens of England & Canada have NO WHERE NEAR the choices that we as American citizens do. As a matter of fact, until very recently (2005) it was simply not possible for a Canadian citizen to pay for their own health care or to purchase private medical insurance that would "bump them up the long waiting list" for medical treatments. The reason Canadian citizens now have the right to do so (and it is still limited) is a direct result of long hard battles (many that are still being fought) that have been waged by brave Canadian citizens like Dr. Jacques Chaoulli who took his clients case all the way to the Canadian supreme court and won! Dr. Chaoulli (http://www.healthcoalition.ca/chaoulli.html) and his patient, George Zeliotis, launched their legal challenge to the Canadian government's monopolized healthcare system after waiting more than a year for hip-replacement surgery.

Canada's high court found for the plaintiffs and in doing so issued the following statement: "The evidence in this case shows that delays in the public healthcare system are widespread, and that, in some serious cases, patients die as a result of waiting lists for public healthcare. The evidence also demonstrates that the prohibition against private health insurance and its consequence of denying people vital healthcare result in physical and psychological suffering that meets a threshold test of seriousness." Furthermore, Justice Marie Deschamps said, "Many patients on non-urgent waiting lists are in pain and cannot fully enjoy any real quality of life. The right to life and to personal inviolability is therefore affected by the waiting times."

Furthermore, the Vancouver, British Columbia-based Fraser Institute which keeps track of Canadian waiting times for various medical procedures. According to the Fraser Institute's 14th annual edition of "Waiting Your Turn: Hospital Waiting Lists in Canada (2006)," total waiting time between referral from a general practitioner and treatment, averaged across all 12 specialties and 10 provinces surveyed, rose from 17.7 weeks in 2003 to 17.9 weeks in 2006. Depending on which Canadian province you live in, a simple MRI requires a wait between 7 and 33 weeks! Orthopedic surgery could require a wait of 14 weeks for a referral from a general practitioner to the specialist and then another 24 weeks from the specialist to treatment! For even more real life horror stories about Canadian citizens left in the lurch by the Canadian healthcare system read the well researched and fact based Wall Street Journal article entitled "Too Old For Hip Surgery" here: http://online.wsj.com/article/SB123413701032661445.html?mod=article-outset-box This is what happens when you put government in control of your health care decisions. Doing so in this country, would be nothing short of a train wreck. Anyone who thinks otherwise is simply uninformed or "willfully ignorant".

What has our government done, to convince people to hand over our very health freedoms for it to govern over?
Katrina……..?
Fannie Mae – bailout? (this is a government entity who's employee's receive bonuses!) What other government employee receives bonuses for doing their jobs?
Social security – bankrupt ? (robbed for other expenditures)
Medicaid – ? (robbed for other expenditures)
$2 trillion Porkulus bill - ? (and growing)
AIG – bail out, yet nobody knows where's the money gone? No committee of oversight in place (was promised by our representatives to be in place immediately)
Gas prices - ? (50% of every dollar at the pump goes to Washington) But who did you point your finger at as the problem?

Since our government "cannot" be sued, how will one be able to be recompensed for its malfeasance or neglect? How will the government, once it tells 300 million people "go see the doctor we will pay all the bills", be able to control the consequences? By overwhelming our medical profession or breaking it, will come another "grand government solution," we need more money to fix it"! You are already familiar and have accepted this excuse for too long, and know this to be their power solution. Our government has impoverished our families' financial freedom to pay our own way, by immoral taxation. Want to know what such a government endeavor will cost the U.S. Tax Payer? Read the April 12, 2009 Wall Street Journal article entitled: Obama Care's Real Price Tag Adopting a Single Payer Universal Health Care System or a Government Run "Public Option" is clearly NOT the way to "reform" our health care system and this is why we have seen predominantly Liberal news outlets like The New York Post, The Huffington Post, Salon.com and The Washington Post vehemently condemn President Obama's "Health Care"....er...."Health Insurance" reform plans. Michigan Congressman Mike Rogers voiced similar concerns about the current House and Senate "reform" bills during a Senate hearing this week:

Whilst both parties (and most American's) feel that something has to be done. The question is, what is the best course of action? There are still those who actually believe that a "Single Payer" system would be the best option. The President does not agree, although he clearly stated his support for such a system prior to his election. Now, he is promoting the aforementioned "Public Option" which by all estimates will cost the U.S. Tax Payers between $1 and $2 Trillion over the next decade! Not to mention what happens AFTER the first decade!

As Investors Business Daily stated in their 07/31/09 article a Public option will most definitely not work. In fact, it's not about choices. It's about Government control of our health care decisions. This being the case, a Public Option is most definitely not the way to reform the U.S. health care system. Nevertheless, we still definitely need health care reform on many levels and if Government must play a part, there are intelligent things they can do. Here’s where they can actually help:

I would say weed out the 12 million Illegals (that we know about) who are sucking our Medicaid system dry...but as Congressman Joe Wilson so aptly stated, Obama CLEARLY wants to "provide a PATH TO CITIZENSHIP for the 10 to 12 million Illegals in our country" (direct quote from his speech in Texas). Once they're legal, he can then cover them ALL on our tax dollar! So YES his plan IS to cover Illegals, he'll just make em legal first! Think they're not sucking our Medicaid system dry? Just visit California or Illinois. Good old “Blago” enrolled thousands of Illegals in to our Medicaid system, thereby running the program in the ground & leaving our Illinois Medicaid system approx. $1.5 BILLION behind in payment of claims to physicians who have been providing “free” care to all illegals who were lucky enough to flock to the State of Illinois to insure themselves for “free”. In fact, according to the U.S. Census Bureau 10 to 12 Million of the Uninsured in America are illegal aliens. Who comprise the rest? Find out here.

2002: A Study issued by the United States Pharmacopeia (USP) concluded that more than 200,000 medication errors occurred during 2002

More Facts:

In summary REAL health insurance reform can be accomplished through consumer education, weeding out abuse of existing Federal entitlement programs (via a legitimate needs assessment) and increased funding of State sponsored Risk Pools so that people who are declined for insurance have an affordable option to continue coverage if declined on the individual major medical market. Following these few simple steps will go a long way towards not only maintaining our current health care system, but also towards keeping the bulk of our nations risk where it belongs, namely with the private health insurance industry. In light of the recent multi Trillion Dollar "Bail Outs" and many other failing corporations coming to the table with their hats in their hands (and their private jets on the tarmac) the last thing our government should do is start cutting more blind "bail out" checks in an effort to "reform" the U.S. health care system.

But hey what do I know? The video below sure makes Government sound wonderful! Just look at their track record!

To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.

Medicaid Expansion Programs Buckle Under The Stress of "Open Enrollment"

C. Steven Tucker (Small Business Insurance Services, Inc.) — Thu, 28 Aug 2008 14:42:42 -0500

I have been an insurance broker in the state of Illinois for the past 15 years and I have seen first hand what happens when an over burdened, tax funded, Government controlled, entitlement program like Medicaid is offered to those with incomes well into the middle class.

Last year, SCHIP covered about 7 million low-income children and Medicaid covered an additional 23 million. This year, 2009, the U.S House of Representatives passed the H.R.2 SCHIP Expansion Bill which adds another 6.5 million children to Medicaid.

In fact, according to U.S. Census Bureau data, 42 million children will now be eligible. The bill also allows States to receive federal reimbursement for adding more immigrant children and pregnant immigrant mothers, and removes the 5 year waiting period now required for legal immigrants to be eligible. This would enable immigrants to become eligible for health benefits the moment they get here.

Currently, the present income eligibility cap is $44,000 for a family of 4. The new bill raised the Medicaid limit to $66,000. New York will even include families who earn $88,000 and other states allow families to subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation. This means that children in some families who have incomes well over $100,000 will now be eligible.

With the median U.S. household income around $50,000, 60% of U.S. households still earning less than $62,000. This means that 3 out of 5 American households will now qualify for free health care for their children. It also means that the other 2 out of 5 household will have the burden of paying for all of this!

Let's take a look to see how some of these programs are doing. Click here to read about the Medicaid "expansion" program enacted in my home State, Illinois, by our recently impeached and now infamous Democratic Governor Rod Blagojevich.

In fact, Blago was so "generous" that he expanded these Medicaid entitlement programs to include a defunct "All Kids Covered" plan, a defunct "Mom's & Babies" plan and an equally defunct "Family Care" plan.

These entitlement programs were designed to provide FREE health insurance coverage to all low income women who are currently pregnant (Mom's & Babies) and all children - here legally or ILLEGALLY (All Kids Covered) but they were also to provide FREE health insurance to all low income mothers of children who are insured under the "All Kids Covered" program (Family Care).

Now, one does not need to study actuarial science to quickly conclude that these types of entitlement expansion programs simply can not continue to work without massive and endless influxes of tax payer dollars. In fact, the State of Illinois is currently $1.5 Billion (yes, that's BILLION) behind in payment of claims to medical practitioners who have already provided treatment to program recipients. Furthermore, submitted claims by unpaid practitioners have accrued a potential liability of $81 million in interest due to payment delays over the past 8 years.

Read more about the problems with claims payments here.
Update: As of January 2009 a moratorium has been placed on the sliding scale portion of the Illinois Family Care and the Mom's & Babies program. One can only wonder why. Could it be due to lack of funding?

Illinois had been lauded as the "Flagship" state for all others to follow regarding the expansion of the Medicaid entitlement programs. If this is the template for all others to follow, then god help us all, or at least those of us that actually fund the Medicaid system through our hard earned tax dollars.

Weighty decisions such as expanding the Medicaid system to virtually "All Kids" regardless of their actual need, simply can not be made based entirely on emotion! Prudent decision makers must weigh the desire to help all mankind against fiscal REALITY. There simply is not enough money to provide such irresponsible expansions of the Medicaid program.

This is the real reason why President Bush vetoed the SCHIP program after the $780,000,000,000 (BILLION) "Porkulus Maximus" Bailout Bill passed in the Senate which was pushed hard by the Democratic Party. Of course, despite the caution of conservatives in the Republican party, the SCHIP bill did pass both the House and
Senate in 2009.

But how can we afford to pay for such entitlement programs? Should we limit these programs to those that truly cannot afford to purchase individual health insurance on the open market? How will we determine who is deserving of such entitlements (e.g. legal residents of this country who actually qualify during a legitimate needs assessment.)

What about personal responsibility? Should we also pay for the middle class if they can afford to purchase health insurance on their own?

Expansion of these entitlement programs to the middle class may be well meaning, but it is undoubtedly a fiscally irresponsible act that will end up crippling the already over burdened system.

We might not feel the direct impact of this now, but we most certainly will when all of the "Baby Boomers" start entering the Assisted Living and Long Term Care arena. Should we just let Boomers who don't have the forethought to purchase Long Term Care insurance off of the financial hook while taxpayers shoulder the burden?

Today, those of us who are in need of health insurance have many options to choose from and, contrary to popular belief many of these options are priced very affordably.

An integral part of being personally responsible is that you take the time to explore ALL of your options so you can fiscially sound decisions BEFORE leaning on a an already over burdened Medicaid system.

If you have other options, you should never leave any decisions up government bureaucrats, especially your healthcare.

To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.

Legitimate Health Insurance Options For The Uninsurable!

C. Steven Tucker (Small Business Insurance Services, Inc.) — Thu, 07 Aug 2008 16:43:07 -0500

I have been a multi state licensed health and life insurance broker for almost 15 years now. One of the biggest challenges I have had to deal with through the years has been trying to help the uninsurable. Unfortunately in most states if you have one of a host of "pre-existing" medical conditions you are labeled as uninsurable on an individual health insurance policy. In most states this uninsurable status lasts for many years and sometimes for life depending on the specific pre existing condition you have been diagnosed with. Some of the pre existing medical conditions that render an applicant uninsurable for ten years or more are: Heart Attack, Stroke, Diabetes, Cancer, Lupus, Multiple Sclerosis, Muscular Dystrophy, Degenerative Arthritis and a host of other pre existing conditions. In addition, there are applicants who have a combination of controlled pre existing conditions but because they have more than three "ratable conditions" they are labeled uninsurable. For example, with many carriers an applicant who has Hypertension & Hyperlipidimia but is also overweight falls under the "3 strikes your out" rule and is labeled uninsurable. Or an applicant may have two of the aforementioned controlled conditions and is not overweight but is a smoker and is then labeled uninsurable also. Or an applicant who has asthma but also smokes falls in to the same uninsurable category with many carriers.

These are just a few examples of conditions or "combo conditions" that can render an applicant uninsurable. The question then becomes, what do I do now? Who will insure me against the catastrophic medical bills that I may face in the future? Who will help me pay for the medications I currently am taking to control the aforementioned conditions? For many years depending on the state you live in you only had two options. They are as follows:

1.) If you have a corporate tax i.d. number you can purchase a small group health insurance policy from most insurance carriers. With this scenario a minimum of two people (often husband & wife) who work for the same corporation can apply for a small group health insurance policy. After a period of time, or in some cases immediately (depending on how many months you have had prior health insurance coverage without a lapse) pre-existing conditions will be covered provided that they are a covered expense on the policy.

2.) Enroll in your states insurance risk pool (if your state is fortunate enough to have one). In our home state of Illinois the risk pool is called the Illinois Comprehensive Health Insurance Plan (ICHIP). ICHIP is a state health benefits program and not an insurance company. Persons must qualify for coverage but in most cases if the applicant is coming off an exhausted qualified COBRA continuation plan from a prior employer sponsored group, their pre existing conditions will be covered from day one (provided again that those conditions are a covered expense on the ICHIP policy). However, ICHIP (and all insurance risk pools) are by no means entitlement programs. They are far from free! Premiums charged are established by law at from 125%-150% above the average rates charged individuals for comparable major medical coverage by five or more of the largest insurance companies in the individual health insurance market in that state. Suffice it to say, the premiums are far from affordable for many people. The rates for a person 50 years of age living in Chicago can range from $554 monthly for a $5,200 deductible plan to $852 monthly for a $500 deductible plan. For those who do not have a Risk Pool in their State (http://www.naschip.org/states_pools.htm) their options are then even more limited if they are labeled as uninsurable.

The two aforementioned options are legitimate Health Insurance options for the uninsurable. It is important to steer clear of the two other "options" presented to the Uninsurable. They are as follows:

1.) Discount P.P.O. network memberships that are by no means health insurance policies. We've all seen them advertised from company's like "Care Entree" or "Ameriplan" that offer "health coverage" (clever way to circumvent the words "health insurance") that will "cover" the entire family for $89 monthly! Beware of these kinds of "discount" products! Learn more in the September 23rd 2008 Issue of The Tennessean Newspaper

These kinds of discount "coverage" plans are so inexpensive because they provide nothing more than a P.P.O. re-pricing discount. This in itself is not a bad thing. However without a Major Medical or Defined Benefit health insurance policy in place one can experience catastrophic medical bills with these types of "health coverage" plans. This is the case because the average P.P.O. discount on medical procedures performed within a P.P.O. network is between 25% & 40%. For a $100 doctor office visit, this is a good deal. However, if the medical bill is $500,000 that can leave the "covered" person with as much as $200,000 in out of pocket expenses!

2.) "Defined Benefit Health Insurance Policies". These policies do indeed provide Guaranteed Issue Health Insurance coverage for the uninsurable. However, the benefits provided are severely insufficient if one were to experience a major medical illness of any kind. These benefits provide a maximum of only $1,000 a day in the hospital and will provide coverage for surgical benefits but only up to the Medicare reimbursement ratio and they provide no coverage for "facility fees" (e.g. hospital fees related to the surgery which can be exorbitant). The two most popular of these plans are available through "AIM" (Association of Independent Managers) and the "Cinergy" plans. Both plans were formerly insured by American Medical & Life Insurance company of New York and NOVA Insurance company.

CONSUMER ALERT!! As of September 28th, 2009 the AIM plans have a issued a "cease & desist" order to all agencies nationwide to stop selling their Defined Benefit Health Insurance policies because AIM no longer has an insurer. American Medical & Life Insurance company (their former primary carrier) was replaced by NOVA Insurance company earlier this year. Now, (as of September 28th, 2009) NOVA has withdrawn as their carrier leaving AIM with no Health Insurance carrier to underwrite future applications or to pay existing claims.

About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own Internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.

Mega Life & Health & Midwest National Life Finally Get What They Deserve!

C. Steven Tucker (Small Business Insurance Services, Inc.) — Fri, 25 Jul 2008 11:31:58 -0500

This is a great day in the health insurance industry! Rarely is an insurance company held liable for improper conduct. The majority of the time the "Big Guy" takes advantage of the "Little Guy." Sadly, the "Little Guy" often has no recourse. But this is not the case as of July 24, 2008.

After many years of repeated violations of insurance conduct laws the National Association of Insurance Commissioners (NAIC) helped levy one of the largest market conduct fines in insurance history against Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I. and endorsed and promoted by the National Association for the Self Employed (NASE) and the Alliance for Affordable Services.

In my opinion, after warning consumers for years about these companies, the 20 Million Dollar Fine they received is not nearly enough and it has come much too late!

Health Markets is still slinging their garbage plans in many parts of the country and hundreds of innocent consumers who purchased a plan through the National Association for the Self Employed call me each week to tell me that they had no idea about the extreme limitations included in the "insurance coverage" provided by Mega Life & Midwest National Life.

Many consumers were not even aware that the plans they purchased were "schedule plans" and in many instances, only paid out $100,000 per illness. Misleading? Sure. In fact, during the sales process, the emphasis seems to be on the one million or two million lifetime maximum and NOT the $100,000 per illness maximum.

Something that many consumers also didn't understand about these plans is that many did not have a
"stop loss number."

To understand what a "stop loss number" is exactly, let's take a look at the three main parts of a health insurance plan:

Calendar year deductible: This is the amount the insured pays first, before the insurance company shares in any medical expenses that are not covered on a "first dollar" basis.
Coinsurance: This is the percentage the insured pays of a specific dollar amount of medical bills incurred throughout the course of each year, called the "stop loss number" before the insurance company pays $100 of the medical costs.
Stop Loss Number: This is the dollar amount of medical bills that the insurance company agrees to share with you, each year, before they will pay 100%.

The average insurance consumer is usually familiar with the deductible. Deductibles can range from $250 to $10,000. Typically, the lower the deductible, the more expensive the plan, because the insurance company is assuming a greater risk.

The same holds true for the Coinsurance. Health plans are sold with different Coinsurance percentages. Plans can be 50/50, 70/30, 80/20, 90/10 or 100% or a variation. These numbers refer to percentages. The first number (e.g. 80/20) refers to the percentage the insurance company will pay, usually for in-network charges after the insured meets his/her calendar year deductible. The second number (e.g. 80/20) refers to the percentage the insured pays.

Let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $1,000 deductible and an 80/20 split of the first $5,000 ("stop loss number".)

$1,000 + 20% of $5,000 ($1,000) = A Maximum Out of Pocket of $2,000.

Now, let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $250 deductible and a $10,000 "stop loss number."

$250 + 20% of $10,000 ($2000) = A Maximum Out of Pocket of $2,250. (note: total does not include any separate "service deductibles" or access fees. Many low quality plans also have these.)

On quality comprehensive health insurance plans, the Lifetime Maximum benefit is usually five million dollars. Typically, plans from reputable health insurance carriers do not have a "$100,000 per illness" or reduced benefits for other medical treatments, like Organ Transplants.

Unfortunately, it is only when an unsuspecting insurance consumer develops a life threatening medical condition that they find out that on the 80/20 plan they purchased, they are responsible for paying 20% of the medical expenses up to the Lifetime Maximum (e.g. 20% of One Million Dollars or $200,000.). In addition, if they have a $100,000 per illness cap, they will also be responsible for all of the medical expenses that exceed $100,000.

Would you buy a policy like that if it was fully explained to you? Most definitely not, and the NAIC apparently agrees. This is one of the reasons why after a 3 year, 29 state investigation, Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I., endorsed and promoted by the National Association for the Self Employed (NASE) and the Alliance for Affordable Services finally got what they deserved!

For more information, you can also read a scathing Market Conduct Report, which was included in the fine to warn future innocent consumers.

If you or a loved one have fallen "victim" to any of this organizations or have been approached by an agent selling one of these "insurance products" please feel free to contact me for help and advice.

To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.

What Are HSA's and HDHP's And How Can They Save You Money And Boost Your Retirement?

C. Steven Tucker (Small Business Insurance Services, Inc.) — Wed, 01 Aug 2007 23:58:18 -0500

The phrase "Consumer Driven Tax Qualified Health Insurance" is being tossed around quite a bit nowadays especially since the tax advantages of owning Tax Qualified Health Insurance has been significantly increased under the former Bush administration. Effective December 20, 2006 President George W. Bush signed the Health Opportunity Patient Empowerment Act of 2006, enhancing Americans' access to tax-advantaged health care savings. The law, part of the Tax Relief and Health Care Act of 2006, provides new opportunities for health savings account (HSA) participants' to build their funds. To read about the new adjustments Click here: http://www.treas.gov/press/releases/hp209.htm For the 2009 IRS H.S.A. COLA (Cost of Living Adjustments) click: http://www.treasury.gov/press/releases/hp975.htm
The 2010 IRS H.S.A. COLA Adjustments were announced on 05 14 2009. They can be viewed here: 2010 IRS HSA COLA

One of the most popular (and lowest priced) types of Consumer Driven Tax Qualified Health Insurance vehicles is the HSA qualified HDHP. HSA stands for "Health Savings Account", more commonly referred to as a "Medical IRA". HDHP stands for High Deductible Health Plan. Health Savings Accounts are a unique way to attractively manage your health insurance costs. They were originally named MSA's or Medical Savings Accounts designed by Senator Bill Archer (R) of Texas. Bill's project was to find a way to reduce the cost of health insurance for the self employed without sacrificing quality coverage for a major medical illness. Bill's brilliant idea was to eliminate the parts of a Traditional Health Insurance Plan that cost the consumer the most money. These expensive benefits include outpatient doctor "co pays" and outpatient prescription "co pays". Bill approached Congress with a proposal that stated in essence that if you remove those two features and keep the major medical coverage in place you could conceivably cut the cost of your health insurance premium considerably. He was absolutely right!

To illustrate how Bill's idea works in the real world. We will use a real world example. Tony & his wife are currently paying $1,134 a month for Cobra continuation coverage from a previous group plan. In comparison, the monthly premium for an HSA qualified HDHP (High Deductible Health Plan) which covers each insured family member up to $5 million dollars is less than half of the premium that they are paying now ($481.64 monthly to be exact). This is a yearly savings of $7,828.32 or a monthly savings of $652.36. This is a significant difference. However the insured has to give up all of their outpatient co pays. Is this worth it? This was the question posed to Senator Bill Archer (R) when he approached Congress back in the late 1990's. His answer to Congress was simply "make it worth it".

In other words, he asked Congress to make it worth it to the insured. Their response was two fold. And it is these two primary reasons that make HSA's a "no-brainer" for every self employed prospective insured and for their corresponding employees. The first thing Congress did was to state that if a policy holder buys a major medical health insurance policy (HDHP) with a yearly family deductible between $2,200 per family (not per person) or as high as $5,800 per family we will call that an HSA qualified health insurance plan (HDHP).

They further said that in order to make giving up outpatient co pays more attractive to the insured we will allow anyone who has an HSA qualified health insurance plan (HDHP) the option to open a tax favored HSA (Health Savings Account) with their local bank or financial brokerage house. Since the insured is saving a considerable amount of money each month by giving up their out patient co pays, we will allow them to take that extra premium that they would have normally given the insurance company for the "privilege" of a co pay and put it into a 100% tax deductible account that will grow tax deferred at an interest rate adjusted by the Fed.

In addition to depositing the amount you save in insurance premiums, you may also deposit in your HSA an amount equal to what the IRS allows for that given year. For the year 2009 the maximum contribution a family can make to their HSA account is $5,950. In addition, any family member who is 55 years of age or older can deposit an additional $1,000 annually (more on the age 55 allowance below). This means that the total amount that Tony and his wife (in our example above) can deposit per calendar year is $7,950 and they can take a 100% tax deduction for that contribution similar to an IRA.

Furthermore, if they do incur medical expenses that arise throughout the course of the year that are subject to the deductible (i.e. prescriptions, doctor's office visit charges, etc.) the IRS will allow them to pull out that money that they put into their optional tax deductible, tax deferred HSA savings account to pay for those expenses. When they use their HSA money to pay for those expenses the IRS will allow them to write those expenses off at a 100% tax deduction. The list that the IRS allows them to spend their HSA money on is very liberal and includes things like dental, orthodontics, eyeglasses, radiokeratonomy (Lasik corrective eye surgery), alternative medicines etc. Click the hyperlink to see the list of allowable expenses and disallowed expenses on the HSA section of the IRS web site here: http://www.irs.gov/publications/p502/index.html

Arguably the most attractive tax advantage to owning an HSA is the fact that the money left over in the HSA account that was not used on medical expenses at the end of the year is "rolled over" into the next year and awarded a higher rate of tax deferred interest. The insured also has the option to roll those unused funds into no load mutual funds, thereby building an extra tax deferred retirement account with money they would have normally given to the insurance company each and every year whether or not they had any claims that year!

It should also be noted that with not having a "co pay" with your plan does not mean that your outpatient doctor visits and outpatient prescription drugs will not be a covered expense. With most HSA qualified HDHP's these charges are a fully covered expense just as they would be with a Traditional Health Insurance Plan. The only difference is these charges will be subject to the "aggregate" family deductible.

Being "subject to deductible" does not mean that you will pay full price for these charges either. If you stay within the vast PPO network that most reputable carriers offer (www.phcs.com) your outpatient doctor office visit charges will be discounted by as much as 40%. Your prescriptions will also be discounted significantly as well by staying within the Rx prescription network.

Let's break that down in plain english. Let's say your doctor's office charges you $100 for a "sick visit". If you use a PPO provider (typically PHCS or MultiPlan) those office charges will be "re-priced" down to roughly $60. Now compare that to a Traditional plan which provides you with a $25 "co pay". The difference to you is $35 out of pocket for that doctor's office visit. But is that all you are really saving?

Not if you add in the monthly premium savings between the two plans. The typical monthly premium savings between a Traditional plan and an HSA qualified plan for a family is $200 to $300 monthly or more. Let's split the difference at $250 less monthly. This equates to an annual savings of $3,000.

Now let's take that $3,000 annual savings and deposit it into a tax deferred, tax deductible interest bearing Medical IRA (HSA). Let's go a step further and imagine you find an HSA account that bears you NO interest AT ALL (which is not that hard to imagine in this economy). You're still saving $3,000 annually and you're deducting that amount from your adjusted gross income. This means less reportable income, which means LESS TAXES!

Now lets imagine you have no major medical claims in year two and you deposit the same amount. Now in year three you have a worse case scenario occur. Now you have $9,000 to help pay your "aggregate" family deductible. Moreover, since deductibles with HSA qualified HDHP's include only one "aggregate" deductible for the entire family there will be no other risk to any other family member for the rest of that year. Unlike Traditional Health Insurance Plans which typically require each of three separate family members to pay their own calendar year deductible if they end up in the hospital (or need an MRI, CT, Nuclear Medicine Scan etc.)

The best way to explain the unique advantages of these types of plans is to look at the maximum out of pocket risk you are exposed to compared to that provided with the "Next Generation" HSA qualified HDHP (for example). Below is a comparison between the two most typical maximum out of pocket risk per person and per family with the average Traditional Health Insurance plan and the maximum out of pocket risk per person and per family that you would have with the "Next Generation" HSA qualified HDHP (more details on this unique product below). The out of pocket assumptions below assume that your Traditional plan requires each of three family members to satisfy their own deductible and coinsurance out of pocket expense each calendar year. Some plans only require two family members to satisfy their own deductible and coinsurance out of pocket expense each calendar year. Either way, for the same premium, your out of pocket risk will reduced significantly with any HSA qualified HDHP available on the market today.

Current Maximum Annual out of pocket risk with the average Traditional Health Insurance Plan

Annual deductible: $2,500 (for one family member)

Annual deductible: $2,500 (for 2nd family member)

Annual deductible: $2,500 (for 3rd family member)

Total Family Deductible: $7,500 (Total Annual Deductible Risk per family per year)

Annual coinsurance out of pocket $2,000 - (20% of the first $10,000 in bills) for one family member.

Annual coinsurance out of pocket: $2,000 - (20% of the first $10,000 in bills) for 2nd family member.

Annual coinsurance out of pocket:    $2,000   (20% of the first $10,000 in bills) for 3rd family member.
Total Family Coinsurance Risk:       $6,000    (Total Annual Coinsurance Risk per family per year)

By adding $7,500 in total deductible risk per family to

the extra $6,000 in total coinsurance out of pocket risk per family. We arrive at a total per family risk of:

$13,500 each calendar year.

The average monthly premium for a family of four for this type of Traditional Health Insurance plan is $743.72.

In contrast, if we compare that total calendar year per person and per family annual risk to that included with the "Next Generation" HSA qualified HDHP with a $7,000 total annual deductible per family with the "Embedded Individual" deductible option (e.g. $3,500 per person deductible x 2 family members maximum) Here's what that looks like:

Annual "Embedded Individual" Deductible: $3,500 (for one family member)

Annual "Embedded Individual" Deductible: $3,500 (for second family member)

Total Deductible risk: $7,000 (Total Annual Deductible Risk per family)

Annual coinsurance out of pocket risk: $0 (100% coverage after the deductible has been satisfied)

Total Family coinsurance: $0 (Total coinsurance risk per family is $0. Plan pays 100%)

By adding $7,500 in total annual deductible risk per family to

the extra $0 in total coinsurance (nothing since the plan pays 100% after deductible) We arrive at a TOTAL Family Risk of:
$7,500 There would be nothing more to pay for the entire family for the rest of that year.

The average monthly premium for a family of 4 with the Next Generation HSA qualified HDHP would be $475.77.

The premium savings per month between both products is $267.95 or $3,215.40 annually. And we actually reduce the total annual per family risk by almost HALF.

In addition, once you have an HSA qualified Health Insurance plan. The IRS allows you to open the aforementioned "Medical IRA", more commonly referred to as an "HSA" (Health Savings Account) if you choose to do so. This is an option. It is however a very good option to select because not only can you deposit the premium difference between both plans ($3,215.40) in to the optional Medical IRA (at the bank of your choice). But you can also add an additional amount of $2,734.60 this year (even more if your over the age of 55) in to a 100% tax deductible, tax deferred, interest bearing Medical IRA. It behooves you to do so for the following reasons:

1.) Unlike any other IRA, a Medical IRA (HSA) allows you to withdraw funds at any time with no penalty for "qualified medical expenses". Most importantly, when you withdraw your HSA funds to pay for any of the qualified medical expenses on that list, those expenses themselves become 100% tax deductible.

2.) Here's the key point though. If you have just ONE year without any significant claims and you even partially fund your Medical IRA, then if the worse case scenario occurs, you will have those funds available and be able to withdraw them with no penalty and use that money to pay your $3,500 deductible for one family member or if you fully fund your Medical IRA you will have enough money to nearly satisfy your $7,000 deductible just incase two family members have a major claim in the same year. In fact, no other kind of Health Insurance actually allows you to lower your risk the longer you own it by hedging money you would have otherwise given an insurance company for a Traditional plan.

I say this because, there is no other kind of IRA that you can withdraw from at any time with no penalties and then use those withdrawals to pay for medical costs and receive a 100% tax deduction for those expenditures. In fact, the longer you own an HSA qualified HDHP, the lower your risk becomes since the more years that pass, the larger your balance in your HSA account becomes. This is so because each year your remaining balance rolls over and continues to earn tax deferred interest.

The longer you look at HSA qualified HDHP's the more sense they make. This is why they have caught on like wildfire and will continue to do so. The only inhibitor to the spread of HSA's is lack of education (as is the case with any other financial vehicle). The "Whole Foods" supermarket chain chose HSA qualified Health Insurance. It worked so well for them that they were recently featured on the ABC 20/20 episode entitled "Sick In America" hosted by John Stossel:

Now you can help fund your HSA account by purchasing every day items! Click www.myhsarewards.com

To learn more about HSA's and the recent federal legislation that has made them even more attractive to people over the age of 55 click: http://www.treas.gov/offices/public-affairs/hsa/about.shtml to read all about them on the Federal Governments HSA educational web site. To learn more about H.S.A.'s in a power point presentation format please click here: http://www.hsacenter.com/ and click on the informative videos on the right.

If you are an employer and are considering HSA qualified plans for your employees consider this. An individual's employer can make contributions that are not taxed to either the employer or the employee. The combined income and payroll tax deductibility leads to discounts for health insurance of over 40 % in some cases relative to other forms of insurance. For more details for the employer http://www.treas.gov/offices/public-affairs/hsa/faq_employer-participation.shtml

For the best interest rates you will find just about anywhere on a Health Savings Account please click: HERE

Beginning in 2007 one company - American Community Mutual (www.american-community.com) introduced a truly unique HSA qualified HDHP. It is called the "Next Generation" HSA. This HSA qualified HDHP has four unique features that make it superior in design over all other individual HSA qualified HDHP's on the market today.

The first of the four benefits is called the "embedded deductible feature". As aforementioned, the typical HSA qualified HDHP does not start paying anything until the entire family deductible has been satisfied. This means that whether one person gets sick or multiple family members get sick the insurance company will not pay anything until the entire family deductible has been satisfied. If your plan has a $5,450 family deductible this can feel unfair if only one member of your family gets sick.

In stark contrast, the American Community Mutual "Next Generation" HSA qualified HDHP eliminates this problem by offering the "embedded deductible feature." This benefit (for a few dollars more per month) requires the insurance company to start paying after only one family member has satisfied their individual deductible (half of the family deductible). This significantly reduces the out of pocket expense to the family if only one person gets sick. This is a valuable benefit since statistically speaking only one family member (if any) will incur medical claims in any given year. This benefit is not unique to the "Next Generation" HSA qualified HDHP. It can be found on other HSA qualified HDHPs on the market today. However, the next 3 benefits are unique to the "Next Generation" plan.

The second and more valuable benefit is the $10,000 "stop loss" number that is included when the 80% coinsurance option is chosen. According to IRS Doc 5305-B (http://www.hsacenter.com/2008-HSA-Contribution-Limits.php) the new (2009) adjusted maximum annual out of pocket expense that a family will pay that owns an HSA qualified HDHP with the 80% coinsurance option is $11,600 regardless of the deductible chosen.

Although this is the maximum allowable out of pocket expense that a family will experience if they choose the 80% option with any other HSA qualified HDHP American Community Mutual decided to reduce the maximum out of pocket a family can experience per year on their "Next Generation" plan to only $2,000 in addition to the chosen deductible. See page 11 benefit description box number 6 of the Next Generation HSA qualified HDHP brochure below.

This quite simply means that after a family has satisfied their chosen calendar year family deductible the insurance company will pay 80% ($8,000) and the family will pay 20% ($2,000) of the first $10,000 in medical bills that are incurred. Afterwards the insurance company will pay 100%. This first $10,000 is known as the "stop loss number". The Next Generation plan is the only HSA qualified plan on the market today that offers this type of co-insurance arrangement and it is much better than the typical HSA qualified plan that offers an 80% option because it results in significant out of pocket risk reductions to a family.

To illustrate this further, we will use the $5,450 family deductible for example. With the typical HSA qualified plan, if an 80% option is chosen then this would subject the family to an out of pocket expense of $11,600. In stark contrast, the Next Generation plan would subject the family to only $7,450 before American Community Mutual would pay 100% of the family's medical bills for the rest of the calendar year. This is $4,150 less out of pocket than any other HSA qualified HDHP on the market today and the Next Generation plan is priced the same or less than most plans!

The third unique benefit is the unlimited "Accident Medical Expense" benefit. This benefit will waive the entire deductible if an accidental injury occurs and pay for all the charges related to the accident at either 100% or 80% depending on the coinsurance you chose. This benefit will kick in each and every time an injury occurs to any family member. This benefit is only available with the "Next Generation" HSA qualified HDHP.

The fourth unique benefit is the "Benefit Period". All other HSA qualified HDHP's restart the calendar year deductible on January 1st of each calendar year. This design prevents many consumers from purchasing their health insurance late in the calendar year. For example, if an insured has had no claims for the entire year of 2009 and then a sizeable claims occurs in December of 2009. The insured would have to satisfy their 2009 calendar year deductible before benefits would be paid. The danger here would be if the insured had another claim in the month of January 2010. Since it would then be a new calendar year, the insured would have to satisfy the new 2010 calendar year deductible before benefits would be paid.

The "Next Generation" HSA qualified HDHP eliminates this problem by starting your benefit period on your requested effective date. The next benefit period would not begin again until 12 months after that date. So with this design, if you were to purchase your "Next Generation" HSA qualified HDHP on December 1st, 2009, then you would not be required to pay another deductible until 12 months later on December 1st, 2010. This is a very attractive benefit for anyone considering buying an HSA qualified HDHP late in each calendar year. It is a much better "Benefit Period" design than the typical calendar year design. This benefit is only available with the "Next Generation" HSA qualified HDHP.

Please feel free to contact me if you have any questions about HSA qualified HDHP's. If you have a C.P.A. or tax advisor please make sure to ask about the tremedous tax advantages of owning an HSA.

About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.

Announcement: "Health Insurance and Health Care Forum"

C. Steven Tucker (Small Business Insurance Services, Inc.) — Thu, 19 Apr 2007 15:50:45 -0500

You are invited to join my New Group: http://activerain.com/groups/healthinsuranceandhealthcareforum

I created this group to start a dialogue among group members on issues concerning health insurance and health care for small business owners and self-employed individuals who are part of a small group health insurance plan or that purchase their own individual health insurance coverage. I invite all member to share their personal experiences and stories about Health Insurance and Health Care, both good and bad.

My goal is to bring "every day" concerns, questions and stories into the public consciousness. I am certain that the issues and topics that we discuss in this forum will yield valuable information that you will be able to use in your everyday lives. I believe that by sharing information and resources and exchanging ideas about these topics, we can all become more "informed" health care consumers.

About Me: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.

TUNE IN to My LIVE INTERNET RADIO BROADCAST EVERY TUESDAY AND THURSDAY AT 5PM CDT.

Are Your Doctor's Hands Tied By Your Health Insurance Company?

C. Steven Tucker (Small Business Insurance Services, Inc.) — Thu, 19 Apr 2007 14:04:20 -0500

I created this group to start a dialogue among group members on issues concerning health insurance and health care for small business owners and self-employed individuals who are part of a small group health insurance plan or that purchase their own individual health insurance coverage. I invite all member to share their personal experiences and stories about Health Insurance and Health Care, both good and bad.

In today's fast paced world, business owners don't often have the time to thoroughly check out the insurance companies or service providers that they rely on to provide health care coverage and medical treatment. Although health insurance is a "tangible" item, it is often "intangible," in the sense that the limitations of a health insurance policy or the quality of health care services that are delivered are usually not apparent until medical treatment is rendered. This is one of the primary reasons that many companies, often appearing legitimate, can get away with selling bogus health insurance coverage to unsuspecting business owners.

I am convinced that the same rings true for health care services. As health care costs continue to skyrocket, are we becoming more limited in our health care options? How much of a role does our health insurance company play in our health care choices? How do we know that the care or treatment administered by a particular doctor, hospital or medical service provider is quality care? How are the Uninsured coping with the cost of medical care? Why are health insurance rates increasing and what is being done about it? Do you know what you were charged for your last hospital visit? Have you been scammed by a bogus insurance company?

My goal is to bring these "every day" concerns, questions and stories into the public consciousness. So if you are not sure where to start, as far as posting or commenting on these topics, you can start by answering any of the questions above. Additionally, I have written several blog articles, which I believe, focus on these issues and I encourage you to read and post comments in this forum, as well as, on my blog.

Lastly, if you have any comments or suggestions or ideas on specific topics we can discuss in this forum, please take the time to provide your input. I am certain that the issues and topics that we discuss in this forum will yield valuable information that you will be able to use in your everyday lives. I believe that by sharing information and resources and exchanging ideas about these topics, we can all become more "informed" health care consumers.

Sincerely,

C. Steven Tucker

Don’t Fall Victim To A Health Insurance Scam: 10 “Red Flags” You Should Look For

C. Steven Tucker (Small Business Insurance Services, Inc.) — Wed, 18 Apr 2007 22:57:10 -0500

In today's fast paced world, business owners don't often have the time to thoroughly check out the companies they rely on to provide goods and services. In many cases, a determination of product/service quality can be made at the time goods are delivered or services are rendered. If goods or services do not meet expectations, there is often an immediate remedy available. For example, poor quality goods can be shipped back to the supplier and/or payment for services can be withheld until services are satisfactorily rendered.

Unfortunately, business owners do not always purchase items that are tangible items, in the sense that they can immediately determine the quality of the goods and/or services at the time of purchase. One example of such a purchase is health insurance. Since health insurance is not usually used immediately after purchase, the quality of care or the legitimacy of the policy may not even come into play until the business owner, or a family member, actually needs to have medical treatment. This is one of the primary reasons that many companies, often appearing legitimate, can get away with selling bogus health insurance coverage to unsuspecting business owners.

In most cases, fraudulent health insurance policies are sold to business owners by telemarketers or "agents" through bogus Associations and Unions. In that, the buyer must join a professional and/or trade association or become a union member to qualify for health insurance. In fact, in a study published by the U.S. General Accountability Office (GAO) in 2004, the GAO found that association schemes ranked at the top of the marketing methods followed by bogus health insurers. According to the report, "Employers and Individuals Are Vulnerable to Unauthorized or Bogus Entities Selling Coverage, between 2000 and 2002, the U.S. Department of Labor and state insurance regulators identified 144 unauthorized entities selling health insurance unlawfully. These entities defrauded 15,000 employers and more than 200,000 policyholders out of $252 million."

However, it is important to mention that many individual and group health insurance products are endorsed by reputable Associations, such as the ARRP and the American Bar Association and, many reputable Unions, such as the AFLCIO and the Teamsters. These organizations have long been recognized for bringing a common class of professionals or citizens together for other purposes that have very little to do with health insurance. Membership commonly includes a wide range of other benefits in addition to discounted health insurance. Typically, the organizations have a governing organization, a constitution and bylaws, a set of officers, voting rights, regular membership meetings and a professional code of conduct.

Unfortunately, most individuals do not find out that they were making hefty monthly payments or premiums to fraudulent Associations or Unions until they have a severe condition that requires medical treatment. Usually, it isn't until after they receive treatment that they receive notice from their medical provider that the claim that was submitted to the insurance company was denied and that all the medical charges that were incurred are now their responsibility.

Often, the scheme starts when business owners are contacted by telephone or approached by someone who claims to represent a certain, official sounding, Association or Union. The business owner is then informed that if s/he becomes a member of the Association or joins the Union, s/he could qualify for a low cost group or individual health insurance plan. Typically the Association or Union is promoted to represent self-employed individuals and small business owners. The low cost health insurance is usually presented as one of the many "perks" that the business owner can qualify for, in addition to many other "member" benefits, like discounts on other services, such as dental, eyeglasses, office supplies, hotels, rental cars, etc.

In many instances, these bogus companies involve licensed health insurance agents to sell their fraudulent health insurance products. Sometimes the "agents" know the products are fraudulent, other times, the "agent" also falls prey to the scheme.

Often, the schemes prey upon consumers who have been previously declined insurance coverage or suffer from a pre-existing condition. Since these consumers have very limited options to purchase private health insurance coverage, the benefits of an Association or Union membership that offers health insurance coverage for a "membership fee" or "union due" is enticing. To the unsuspecting consumer that has a pre-existing medical condition or is paying high premiums for coverage, the "membership fee" or "union due" is a small price to pay for what they believe will be a quality health plan that provides "guaranteed" coverage with no "pre-existing condition exclusions" and no "waiting periods."

In many circumstances, the print materials that are left with the consumer are very well designed, however, the majority of the time, the language in the "health plan brochure," if there is one, is very unclear. The literature may name the entity that is authorized to act as the health plan administrator of the plan, but neglect to name the actual insurance company that is providing the health insurance coverage. Unfortunately, it is often difficult for the consumer to separate the illegitimate companies selling official sounding health plans from the legitimate ones. Typically fraudulent health plans have many commonalities.

Here are 10 "Red Flags" that may indicate health insurance fraud:

The "agent" is not a licensed insurance agent but an "enrollment" or "membership" coordinator.
The term "discount plan" is written in the product literature, but the term health plan, health insurance or policy is frequently used by the plan promoter. Discount plans often provide nothing more than a discount for medical services, such as prescription medications, eyeglasses, dental, etc. These plans are not designed to offer major medical health insurance coverage.
The official sounding "Association or Union" is one that you have never heard of before.
The plan is referred to as an ERISA plan. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that allows employers to set up employee benefit plans for employees and their dependents. ERISA plans are not subject to state regulation and are not regulated by the state insurance commissioner. ERISA plans are normally not sold as health insurance, but are instead, established by employers, unions or groups acting on behalf of employers. Therefore, unsuspecting buyers believe these plans actually offer health insurance coverage, when if fact, they do not.
The buyer is told that the "membership fee or union dues" includes the health insurance premium, but there is no mention of the word "premium" in any of the plan literature.
The plan offers "guaranteed" insurance coverage with no exclusions for "pre-existing conditions" and no "waiting periods."
The plan is significantly cheaper in price than other health insurance plans.
The term "reinsured" is used in regards to the plan. Reinsurance is something insurance companies buy to protect themselves against their own risks. It is insurance for insurance companies. Licensed insurers rarely have their agents mention any of their reinsurance arrangements during a sales presentation.
The Association or Union is comprised of members from all walks of life and/or requires its members to state that they belong to a certain trade, class or group of professionals that they have no affiliation with, for example, the Association or Union is said to be comprised of "Food and Beverage" workers, but "Florists" and "Machinists" are allowed to enroll as members.
If the Association or Union is said to have a special arrangement with a health insurance company, a plan administrator or another third party that has designed the plan using a legal "loophole" that allows members to purchase health insurance at a discounted rate or to purchase a individual or group health insurance policy.

So how can you protect yourself from falling victim to a fraudulent insurance scam? Make sure you contact your state's department of Insurance to determine if the health insurance company and the third-party administrator are licensed to do business in your state and make sure that the "agent" selling the plan is a "licensed health insurance agent." Additionally, make sure that health insurance company has been approved to sell the particular policy that is being offered. Since it may be difficult to tell if fraud is involved, always put off buying your health insurance policy until you have had the opportunity to perform your own due diligence.

Uninsured Americans Routinely Charged More For Medical Treatment

C. Steven Tucker (Small Business Insurance Services, Inc.) — Tue, 17 Apr 2007 01:23:31 -0500

If you are one of the 47 million Americans that have joined the ranks of the uninsured, what you may not know is that you may have to pay more for your medical treatment than your privately insured counterparts.

When individuals without insurance get sick, they usually have to pay much more for the same medical services for the simple reason that large insurance companies often negotiate lower with doctors, hospitals, pharmacies, and others health care providers for their policyholders.

This means that the average uninsured working man or woman who suffers a mild heart attack can be stuck with a hospital bill that is in excess of $30,000 compared to the $10,000, negotiated rate, which is charged to an insured patient's private insurance carrier. In many cases, uninsured individuals are charged 3-4 times more for the exact same medical treatment that is administered to patients with private insurance.

Additionally, uninsured patient with huge medical bills are usually aggressively pursued by collection agencies. In fact, new bankruptcy laws make it extremely difficult to discharge medical debt.

Statistically, if you don't have health insurance coverage, you have a 25% greater chance of developing a life-threatening disease or condition than those who have health insurance. Here are some startling statistics from the National Institute of Medicine (IOM) - an educational arm of the National Academy of Sciences:

Lack of health insurance causes 18,000 unnecessary deaths per year.
Adults without health insurance coverage have a 25% greater chance of dying from a disease or condition than those with health insurance coverage.
The nation spends $65 to $130 billon a year in lost resources because of diminished health and premature deaths relating to uninsured Americans

Today, there are more uninsured Americans than any point in history. According to the U.S. Census Bureau, approximately 15.9 percent of Americans are walking around without health insurance coverage and paying for medical expenses out of pocket.

Although treatment for a sore throat or broken ankle can be a manageable medical expense for some families, more expensive treatments like surgery or chemotherapy can be financially devastating.

If you are the type of person that wouldn't risk driving your vehicle without car insurance, consider the fact that there is a statistically greater chance that you will suffer from an illness or injury than an auto accident.

Small Business Health Insurance: "Why The Best Policy Is A Great Agent"

C. Steven Tucker (Small Business Insurance Services, Inc.) — Tue, 17 Apr 2007 01:15:15 -0500

I have been a health insurance broker for 15 years now, and every day I read more and more "horror" stories that are posted on the Internet regarding health insurance companies not paying claims, refusing to cover specific illnesses and physicians not receiving reimbursement for medical services.

Unfortunately, the reality is, insurance companies are driven by profits and not people (albeit they need people to make profits) which means that insurance companies often look very hard for a legal reason not to pay a claim. However, what most people fail to realize is that there are very few "loopholes" in an insurance policy, which actually give the insurance company an unfair advantage over the consumer.

In fact, insurance companies go to great lengths to detail the limitations of their coverage by giving their policyholders a 10-day free look period, to review their policy. Unfortunately, the majority of policyholders put their insurance cards in their wallet and throw their policy in a drawer or filing cabinet during their 10-day free look period. And, it usually isn't until they receive a "denial" letter from the insurance company after they submit a claim for reimbursement, that they take their insurance policy out of their filing cabinet to read through it carefully.

Since many small business owners rely heavily on the insurance agent to explain the plan's coverage and benefits, typically, individuals who purchase their own health insurance know very little about their plan. Although policyholders may know what they pay in monthly insurance premiums or what amount they have selected for a deductible, they may not really understand their insurance benefits in their entirety.

Purchasing a health insurance policy is NOT like buying a car, in that, the buyer knows that the engine and transmission are automatically included, air conditioning is standard and that power windows and seats are optional.

There are so many variables that consumers have to be aware of when it comes to buying health insurance. These variables, and confusing insurance terminology, are often difficult for the average consumer to understand which is why many small business owners actually put off looking for a new health plan until their rates have skyrocketed to the point that they can no longer afford the monthly premiums. Business owners, who find themselves in this position, often place a greater emphasis on how much the new plan will cost, rather than placing an emphasis on what benefits the new plan will actually offer.

Quite often, consumers that base their purchasing decision entirely on price, don't even realize that their new plan may not provide coverage for specific medical conditions or that the amount allotted for certain treatments may be extremely limited. And, it usually isn't until they receive a large bill from a medical provider which states that "claims were denied" that they realize that they made a critical mistake in plan selection.

As a small business owner, myself, who primarily deals with other small business owners, I have come to the realization that part of the problem is that it is extremely difficult for individuals purchasing their health plan on the open market to distinguish the difference among health plans. It is also equally difficult for consumers to determine what type of health insurance coverage they actually need for their particular situation.

Remember, there is a big difference between the type of health plan consumers actually "need" and the type of health plan consumers actually "want." Let me explain.

Recently, I have read many blog articles that seem to stress that consumers should purchase health plans that offer 100% coverage with a very low deductible. 100% coverage means that after the deductible is met, usually $250, the plan will pay 100% of all covered medical expenses.

Although I agree that these types of health plans have a great "curb appeal." I can tell you from personal experience that these plans are not for everyone, nor are they affordable.

Will a low deductible plan that offers 100% coverage offer the policy holder greater peace of mind? Probably. But is a low deductible health plan that offers 100% health insurance coverage something that most consumers really need? Probably not.

In my professional opinion, consumers must achieve a balance between four important variables; wants, needs, risk and cost when they purchase a health plan. Just like the car analogy, it is important for healthcare consumers to understand what type of health insurance benefits are automatically included or standard and which health insurance benefits are optional. For example, on most health plans, maternity and prescription drug coverage is optional.

With this in mind, if one is healthy, takes no medications and rarely goes to the doctor, do they really need a 100% plan with a $5 co-payment for prescription drugs if it costs them $300 dollars more a month?

Would it benefit a person to pay $200 more a month to have a 90/10 plan with a $250 deductible, or should they purchase an 80/20 plan with a $2,500 deductible which allows them to save $200 a month? Wouldn't the 80/20 plan still offer you adequate coverage? Isn't it more cost effective to put that extra $200 that would be spent on insurance premiums, totaling $2,400 per year in their bank account, "just in case" they may get sick or injured and might need to pay thier $2,000 deductible?

Isn't it smarter to keep your hard-earned money yourself, rather than pay higher monthly premiums to an insurance company for an illness or injury that may never happen?

This is just one example of consumer-driven health care. Another example is an HSA qualified HPHP. A HSA qualified HDHP (Health Savings Account qualified High Deductible Health Plan) may offer a more affordable healthcare option to individuals that are searching for a health plan with very low monthly premiums. Typically, these plans offer policyholders greater flexibility and control in where their health care dollars are spent. Plans often come with a fixed aggregate family deductible, which mean that a separate deductible does not have to be met for each family member on the plan.

For more information on HSA qualified HDHPs, click here.

In my experience, I believe that individuals who purchase their health plan based on "wants" rather than "needs" feel the most defrauded or "ripped-off" by their insurance company and/or insurance agent.

In fact, I hear almost identical comments from almost every business owner that I speak to about health insurance.

Comments, such as:

"I have to run my business; I don't have time to be sick!"
"I think I have gone to the doctor 2 times in the last 5 years" .......and
"My insurance company keeps raising my rates and I don't even use my insurance!"

Again, as a small business owner myself, I can understand the frustration that many small business owners express. So, here is the $64,000 question:

Q. Is there a simple formula that everyone can follow to make health insurance buying easier?

A. YES. Become an INFORMED insurance consumer!

If you are wondering what I mean by this, let me explain:

Every time I contact a prospective client or call one of my client referrals, I ask that person a list of questions about their current health insurance policy. You know, that policy that is in their dresser drawer or filing cabinet.

That same policy that they bought to protect themselves and their family from that "worse case scenario" so they wouldn't have to file bankruptcy or lose their home due to unpaid medical debt.

That policy that they thought promised coverage for that $500,000 life-saving organ transplant, for the 40 chemotherapy treatments that they may have to undergo if they were diagnosed with cancer or the many months of physical and/or speech therapy that they might need to fully recover from a stroke.

Q. So, what do you think happens almost 100% of the time when I ask these individuals "BASIC" questions about their health insurance policy?

A. They almost always do not know the answers!

The following is a list of 10 Questions that I routinely ask a prospective health insurance client.

1. What Insurance Company are you insured with and what is the name of your health insurance plan? For example, Blue Cross Blue Shield-"Basic Blue."

2. What is your Calendar Year Deductible and would you have to pay a separate deductible for each family member if everyone in your family became ill at the same time? For example, the majority of health plans have a per person yearly deductible, for example, $250, $500, $1,000, or $2,500. However, some plans will only require you to pay a 2 person maximum deductible each year, even if everyone in your family needs extensive medical care.

3. What is your Coinsurance percentage and what dollar amount (stop loss number) is it based on? For example, a good plan design works this way. After you have satisfied your calendar year deductible, the insurance company will pay 80% ($8,000) and you will pay 20% ($2,000) of the first $10,000 in medical bills that you incur each year. This first $10,000 is termed the "stop loss number." After this brief sharing arrangement is over, the insurance company pays 100% up to the Maximum Lifetime Benefit, which is typically, $2-5 Million per insured for the rest of that calendar year. Then, everything starts over again on the first day of each subsequent calendar year. Stop loss numbers can be as little as $5,000 or $10,000 or as much as $20,000. However, be aware that there are some policies on the market that have NO stop loss number at all! Therefore, it is critical that you ask what your stop loss number is before you purchase a plan.

4. What is your Maximum Out of Pocket Expense per year? Keep in mind that the Maximum Out of Pocket Expenses per year includes all deductibles plus all coinsurance percentages plus all applicable access fees, service deductibles or other fees.

5. What is the Lifetime Maximum Benefit the insurance company will pay if you or someone in your family becomes seriously ill and does your health plan have any "per illness" maximums or caps? For example, some plans may have a $5 Million Lifetime Maximum, but there might be a benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for the $5 Million of Lifetime Coverage.

6. Is your plan a Schedule Plan, in that it only pays a certain amount for a specific list of procedures? For example, Mega Life & Health & Midwest National Life, endorsed by the National Association of the Self-Employed, (N.A.S.E.) endorses schedule plans under the name "Health Markets."

7. Does your plan have Doctor Copays and are you limited to a certain number of doctor co-pay visits per year? For example, many plans have a limit of how many times you go to the doctor per year for a copay and, quite often the limit is 2-4 visits.

8. Does your plan offer Prescription Drug Coverage and if it does, do you pay a co-pay for your prescriptions or do you have to meet a separate drug deductible before you receive any benefits and/or do you just have a discount prescription card only? For example, some plans offer you prescription drug benefits right away, while other plans require that you pay a separate drug deductible before you can receive prescription medication for a copay. Today, many plans offer no copay options and only provide you with a discount prescription card that only gives you a 10-20% discount on all prescription medications. This is a dangerous policy design that can lead to catastrophic out of pocket expenses if you were to contract any one of a host of major medical conditions such as, Multiple Sclerosis or Rheumatoid Arthritis that require expensive outpatient maintenance medications which are usually not available in Generic form.

9. Does your plan have any reduction in benefits for Organ Transplants and if so, what is the maximum your plan will pay if you need an organ transplant? For example, some plans only pay a $100,000 maximum benefit for organ transplants for a procedure that actually costs as much as $500K or more. In addition, this $100,000 maximum may also include the cost of expensive anti-rejection medications that have to be taken after a transplant. If this is the case, the insured will often have to pay for all anti-rejection medications (a.k.a. Immunosuppressants) out of pocket. Keep in mind that these medications are among the most expensive medications which individuals requiring an organ transplant will have to take for the rest of their life.

10. Do you have to pay a Separate Deductible or Access Fee for each hospital admission or for each emergency room visit? For example, some plans, like the Assurant Health's "CoreMed" plan have a separate $750 hospital admission fee that you pay for the first 3 days you are in the hospital. This fee is in addition to your plan deductible. Keep in mind that many plans have benefit "caps" or "access fees" for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. Benefit "caps" could be as little as $500 for each out-patient treatment, leaving you a bill for the remaining balance if the fee for that particular service exceeds $500. "Access fees" are also additional fees that you are required to pay per treatment. For example, for each outpatient chemotherapy treatment, you may be required to pay a $250 "access fee" per treatment. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000. Again, these fees would be charged in addition to your plan deductible.

Now that you have read the list of questions that I ask a prospective health insurance client, ask yourself:

How many questions you were able to answer?

If you were not able to answer all ten, don't be discouraged. That does not necessarily mean that you are not a smart consumer. I am sure you comparison shop for everything else. Maybe you were just extremely confused by all of the insurance terminology or you had a "bad" insurance agent who did not take the time to really explain the type of coverage you were purchasing.

So how would you know if you dealt with a "bad" insurance agent? Because a "great" insurance agent would have taken the time to help you really understand your insurance benefits and s/he would have answered all of your questions about your health plan purchase BEFORE you signed on the dotted line.

Remember, insurance agents are not different from any other professional. There are "great" insurance agents and brokers that care about clients and offer exceptional customer service, and then there are "bad" agents that avoid answering questions and typically don't return phone calls when clients leave messages about unpaid claims or skyrocketing health insurance premiums.

Q. How do you know if you have a "great" agent?

A. A "great" agent will recommend a health insurance plan based on all four variables; wants, needs, risk and cost. A "great" agent gives you enough information to weigh all of your options so you can make an informed purchasing decision. And, lastly, a "great" agent looks out for YOUR best interest and NOT the best interest of the insurance company.

Another way to tell whether or not you have a "great" or a "bad" insurance agent is to determine how many of the ten questions you were actually able to answer without looking at your health insurance policy.

If you were able to answer all ten questions, you have a "great" insurance agent.

If you were able to answer at least seven out of ten questions, you probably have a "good" insurance agent.

But, if you were only able to answer a few questions or less than seven out of the ten, you most likely have a "bad" insurance agent.

Always keep in mind that your health insurance purchase is just as important as purchasing a house or a car, if not more important. So don't be afraid to ask your insurance agent a lot of questions to make sure that you understand what your health plan does and, more importantly, does not cover.

If you don't feel comfortable with the type of coverage that your insurance agent suggests or if you think the price for the plan is too high, ask your agent if s/he can select a comparable plan so you can make a side by side comparison before you make a purchase.

And, always make sure that you read all of the "fine print" in your health plan brochure and please remember to take the time to read through your policy during your "10-day free look period."

Remember, if you don't understand something, or aren't quite sure what the asterisk (*) next to the benefit description really means in terms of coverage, call your insurance agent or contact the insurance company directly to ask for further clarification. Furthermore, make sure you take the time to perform your own research on the Internet.

For example, if you research Mega Life and Health and Midwest National Life insurance company, endorsed by the National Association for the Self Employed (NASE), you will find out that there have been multiple class action lawsuits brought against these companies since 1995. Many health insurance companies, especially the ones that have to pay huge insurance fines often change their name and target more unsuspecting consumers. In fact, today these companies are selling health insurance under the name "Health Markets."

So please perform your own due diligence and ask yourself, "Is this a company that I can trust to pay my health insurance claims?"

Additionally, find out if your agent is a "captive" insurance agent or an insurance "broker."

Why?

"Captive" insurance agents can only offer ONE insurance company's products. In contrast, an "Independent" agent or insurance "Broker" can offer you a variety of different insurance plans from many different quality carriers.

Over the years, I have developed strong and trusting relationships with my clients and I am constantly developing new clients through existing client referrals. This is partly because of my level of insurance expertise and primarily due to the level of personal service that I provide.

Because personal service is extremely critical to building long-term client relationships, this is the main reason that I caution people to be very careful when using online quoting engines and online applications to buy health insurance on the Internet.

Again, in my professional opinion, there are too many variables to consider when shopping for health insurance. Therefore, I am a firm believer that a health insurance purchase requires the level of expertise and personal attention that only an insurance professional can provide. And, since it does not cost a penny more to purchase your health insurance through an independent agent or broker, my advice to you would be to use Ebay and Amazon for your less important purchases and to use a knowledgeable, ethical and reputable independent agent or broker for one of the most important purchases you will ever make....your health insurance policy.

Lastly, if you have any concerns about an insurance company, contact your state's Department of Insurance BEFORE you buy your policy. Your state's Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policyholders.

Also, if you suspect that your agent is trying to sell you a fraudulent insurance policy, for example, you have to become a member of a union to qualify for coverage, or s/he isn't being honest with you, your state's Department of Insurance can also check to see if your agent is licensed and whether or not there has ever been any disciplinary action previously taken against that agent.

In closing, I hope I have given you enough information so you can become an INFORMED insurance consumer and you can understand "Why The Best Policy Is A Great Agent." Whatever decision you make in regards to your health insurance, please always remember to heed the following words of wisdom.

"If it sounds too good to be true, it probably is!" ..........and
"If you only buy on price, you get what you pay for!"