Small Business Health Insurance Tips & Advice

Health Insurance 101

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Sun, 19 Apr 2009 16:40:46 -0700

Health Insurance 101 with Industry Insider and Watchdog, C. Steven Tucker. This is a internet talk show that focuses on Consumer-Driven Health Insurance products for Small Business owners, the self-employed, individuals who are paying high monthly premiums for employer sponsored group Health Insurance coverage or COBRA continuation coverage or for anyone interested in learning how to shop for the best Health Insurance at the lowest price.

This show will be of special interest for those individuals who have recently lost their jobs and are confused about their COBRA benefits or for those who are looking for more affordable COBRA alternatives. Topics will range from COBRA subsidies, State Insurance Risk Pools, Health Savings Accounts, Guaranteed Issue Defined Benefit Health Insurance plans and many other interesting topics. Listeners will also learn how they can build retirement income using a "Medical IRA" attached to a Consumer Driven Health Insurance plan, what options they have if they have been declined Health Insurance coverage and are labeled as "uninsurable" and how they can obtain legitimate Health Insurance coverage for pre-existing medical conditions even after they have been declined.

Listeners, please tune in every Tuesday and Thursday at 6 PM EDT, 5 PM CDT, 4 PM MDT and 3 PM PDT for Health Insurance 101, with your Host, C. Steven Tucker, Health Insurance Industry Insider and Consumer Watchdog.

Steve has served as a Subject Matter Expert for the Wall Street Journal and Fortune Small Business Magazine. He is a strong advocate for HSA (Health Savings Account) qualified HDHP's and other consumer-driven Health Insurance products like HRA's (Health Reimbursement Accounts).

He has written numerous articles detailing how consumers can avoid Health Insurance scams and what questions they should ask their insurance agent BEFORE they buy a Health Insurance policy. Your Health Insurance policy is one of the most important purchases you will ever make, so take the time to become an informed Health Insurance consumer and tune in every Tuesday and Thursday for great topics and Health Insurance questions from our listeners.

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Wed, 07 Jan 2009 23:50:47 -0800

The acronym HSA is being tossed around quite a bit nowadays especially since the tax advantages of owning an HSA and a corresponding qualified HDHP (Deductible Health Plan) have 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 for the 2009, click here. For more information on the IRS H.S.A. COLA Adjustments click here.

HSA stands for Health Savings Account, more commonly referred to as a "Medical IRA". HSA qualified HDHP's are one of several relatively new Health Insurance concepts that fall under the heading of "Consumer Driven Health Insurance". 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!

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 here to see the list of allowable expenses and disallowed expenses on the HSA section of the IRS web site.

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 that 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 PHCS PPO network that most reputable carriers offer 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 account. 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 your 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 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).

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 here to review the Federal Government's HSA educational web site. To learn more about H.S.A.'s in a power point presentation format please click here.

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. If you are an employer interested in learning more about HSA's, click here.

Beginning in 2007 one company - American Community Mutual introduced a truly unique HSA qualified HDHP. It is called the "Next Generation" HSA qualified HDHP. 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 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.

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.

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Sun, 23 Nov 2008 00:16:10 -0800

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
Defined Benefit Health Insurance Plan

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.

5. A fifth alternative, recently advertised on the Fox News Channel is now available. It is a known as a "Defined Benefit Health Insurance Plan." These affordable policies can be purchased at any time and are issued on an individual basis regardless of health history, which means they can be a unique option for individuals that have been "declined" individual health insurance coverage.

However, these policies should be considered last, because coverage is limited and they are not designed to act as a comprehensive major medical plan. Although these policies offer limited benefits, they do offer an unlimited surgical benefit, therefore, they can be a financial lifesaver for anyone who is in need of surgical treatment for a pre-existing condition and might be exploring lower cost surgical options oversees. In addition, these plans also offer up to $1,000 a day for hospital coverage lasting up to 100 days. Outpatient doctor office visits & Labs.

Fortunately, these plans are HIPPA qualified, which means that all pre-existing conditions will be covered from day one, providing that the insured has "proof of credible coverage." Again, "credible coverage" is defined as health insurance coverage that has been in place for a minimum of 18 months prior to application, with no lapse in coverage for more than 63 days. To learn more about "Defined Benefit" health insurance plans, 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.

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.

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Sun, 23 Nov 2008 00:13:16 -0800

Universal Healthcare is primarily an ideology championed by the Democrats. However, contrary to popular belief, a nationalized health care system for all Americans, has never been on the agenda for President Obama. Read more about President Obama's healthcare policy here.

His agenda, instead, has always been to assist those who are rendered uninsurable and or are in need of assistance in obtaining health care coverage due to low income. Part of his plan is to expand the role of SCHIP and State Insurance Risk Pools so that those who are rendered "uninsurable" on the individual major medical market have "guaranteed insurability" through their respective State Insurance Risk Pools.

Although many states already have a State Insurance Risk Pools, some states, like Arizona do not. These states desperately need such Insurance Risk Pools and until recently, have not been able to adequately provide coverage to the "uninsurable" due to the lack of funding.

In fact, President Obama's plan is to provide more Federal funding to existing State Insurance Risk Pools to drive the premiums down. Thereby, making this option more affordable for those who cannot obtain "individual" health insurance coverage on the open market. To see if your state has an Insurance Risk Pool, click here:

In terms of Universal Healthcare for everyone in the United States, however, we must research how well "socialized medicine" has actually worked for other countries. Although proponents of a single payer system often bring up the point that it has worked flawlessly for other countries like France and Canada, the fact remains that many people living in these countries have a different perspective on how effectively their health care system is working.

For example, to see the faces and stories of Canadians who are at the mercy of Canada's Universal Healthcare system, please watch these short, but very informative video documentaries by Stewart Browning:

In fact, many Canadians hire high priced "health care brokers" to arrange medical procedures in the United States because of the terrible bureaucracy that controls health care in Canada. Quite often, we also hear the main stream media reporting on the number of uninsured in the United States.

Something that is rarely discussed, however, is who the uninsured really are. For the real facts on who make up the 47 million uninsured, please watch:

Uninsured in America

"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 a 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 do in other developed countries: For example, 56 percent of Americans benefit by 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. Currently, approximately 827,429 people are waiting for some type of procedure in Canada and nearly 1.8 million people are waiting for a hospital admission or outpatient treatment in England.

Source: Scott W. Atlas, 10 Surprising Facts About American Health Care, National Center for Policy Analysis, Brief Analysis No. 649, 3/24/09

Because of how the Single Payer System is designed, Canadian citizens have no where near the level of healthcare choices that American citizens do. As a matter of fact, until very recently (2005) it was not even possible for a Canadian citizen to pay for their own healthcare or to purchase a private health insurance policy that would "bump them up the long waiting list" to expedite their medical treatments.

Fortunately, because of a recent court ruling, some Canadian citizens have now been given the right to purchase their own private health insurance. However, access to care in Canada is still limited, and there are many hard battles yet to be fought.

Let's take a look at one brave doctor, Dr. Chaoulli, who took his client's case all the way to the Canadian Supreme Court and won. Dr. Chaoulli launched his legal challenge in the Canadian court system when his client, George Zeliotis, waited more than a year for hip-replacement surgery.

In this case, Canada's high court, who found for the Plaintiff, 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."

The Vancouver, British Columbia-based Fraser Institute which keeps track of Canadian waiting times for various medical procedures states in their 14th annual edition of "Waiting Your Turn: Hospital Waiting Lists in Canada (2006)," that, "the 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, to have an MRI you may be required a wait between 7 and 33 weeks! To have orthopedic surgery you may be required to wait 14 weeks before you can see a general practitioner to obtain a referral to the see the orthopedic surgeon and then another 24 weeks from the time you see the orthopedic surgeon to the time you actually have surgery.

So, before you jump on the Universal Healthcare bandwagon, please watch the aforementioned videos (all of them) and then spend some time reading through the real life horror stories of Canadian citizens who were left in the lurch by the Canadian healthcare system, which has been documented in a very well-researched article published in the Wall Street Journal titled "Too Old For Hip Surgery."

These videos and the WSJ article will at least give you some greater insight into what could happen when government is in total charge of controlling our healthcare and medical decisions.

If fact, if we think about it, What has our government done correctly to convince the American people that they should hand over our healthcare freedoms for them to control?

National Debt? Two Billion dollars of interest accruing every 2 hours.
Gas prices? 50% of every dollar at the pump goes to Washington, but, who does Washington point its fingers at when it discusses this problem?
Katrina? American citizens held hostage in an overcrowded stadium. Buses never utilized to drive people to safety. Promises of water and food which never arrived. Parts of New Orleans still a disaster zone.
Fannie Mae? Pseudo government entity that allows employees to still receive bonuses after its failure.
Social security? Robbed for other expenditures. Underfunded and likely to run out of money.
Medicaid? Robbed to pay for other expenditures. Underfunded and likely to run out of money.
$2 trillion "Porkulus Maximus" Bill? The Bill that Congress admits they didn't read, but signed anyway.
TARP? Billions of dollars unaccounted for because money was distributed with no oversight committee in place. Money that has a high probability of fraud. Portions still unaccounted for, even with an oversight committee.

"How will the government, once it tells 300 million people "go see the doctor pay everyone's medical bills?"

If you want to know what such a government endeavor will really cost the U.S. Tax Payer, please read the April 12, 2009 Wall Street Journal article entitled "The End of Private Health Insurance."

Real healthcare reform can be accomplished when the fraud and abuse is weeded out of our existing Federal and State entitlement programs via a legitimate needs assessment and when the quality and safety of healthcare is systematically improved.

Citizens must also do their part by becoming informed health insurance consumer and they must also learn how to become an advocate for themselves when important medical decisions are made. Additionally, American should carefully citizens the decision to trade health care choice for the temporary financial security that our government may promise.

In my opinion, we must continue to work diligently to improve our existing system and to keep the bulk of our nation's risk in the private health care sector where it belongs.

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Sun, 31 Aug 2008 22:37:08 -0700

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.

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Finally a legitimate Defined Benefit Health Insurance option for the uninsurable!

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Thu, 07 Aug 2008 17:37:58 -0700

I have been a multi-state licensed health and life insurance broker for over a decade and one of the biggest challenges I have had to deal with throughout the years, has been trying to help individuals that have been labeled as "uninsurable."

On the Individual Health Insurance market, insurance companies get to "pick and choose" who they offer individual health insurance coverage. This means that insurance companies tend to offer coverage to healthy individuals versus individuals with serious pre-existing medical conditions. In fact, since insurance companies are not obligated to offer anyone coverage on an individual health plan, quite often, individuals with serious pre-existing medical conations are often "declined coverage" altogether.

Once an individual is declined health insurance coverage, that "decline" ends up on their Medical Information Bureau Report (MIB), which other insurance companies have access to. This makes them very likely to be declined again in the future when they apply for health insurance coverage with a different carrier.

Quite often, individuals that have been declined coverage find themselves labeled as "uninsurable." This uninsurable status usually lasts for many years, and in some cases, may last for the rest of the individual's life.

Here is a list of just a few of the pre-existing medical conditions that likely render an applicant uninsurable for ten years or more are:

Heart Attack

Stroke

Diabetes (insulin or sugar pill dependant)

Cancer (Infiltrating Ductal Carcinoma only, Carcinoma in situ ok after excision)

Lupus

Multiple Sclerosis

Muscular Dystrophy

Degenerative Arthritis and....

Other serious pre-existing Conditions

On many occasions, I also run into individuals that have "less serious" pre-existing medical conditions. Quite often, many of the carriers I represent, classify certain conditions, like Hypertension (high blood pressure) or Hyperlipidimia (high cholesterol) as "rateable conditions." Rateable Conditions are medical conditions that are normally controlled with medication. However, most insurance carriers also consider obesity and smoking as "rateable conditions."

If an individual with a "rateable condition," applies for health insurance coverage, the insurance company may offer the applicant coverage for a pre-existing conditions if the applicant coverage agrees to pay a higher monthly premium. These are premium increases are known as "Rate ups."

In general, insurance companies can "rate up" an applicant for a variety of reasons which are not necessarily limited to the applicant's pre-existing medical condition. For example, individuals who smoke or are more than 30 lbs overweight often receive a "rate-up" because their risk factors are higher.

Sometimes, insurance carriers will refuse to offer coverage to applicants that have more than two or more rateable conditions. For example, if the applicant has the two aforementioned conditions and is also over weight, the underwriting guidelines for that insurance carrier may classify the applicant as "uninsurable."

In fact, many carriers adopt a "3 strikes your out" underwriting process, which means that an applicant with three "rateable conditions," whether controlled or not, is automatically declined health insurance coverage.

So, what happens if you find yourself in this category, specifically:

What do you do if you are labeled uninsurable?

For many years, depending on the state you live in, you only had two options. They were 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 State Insurance Risk Pool (if your state is fortunate enough to have one). For example, in my 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 that those conditions are a covered expense on the ICHIP policy.

ICHIP and all insurance risk pools, are by no means entitlement programs because they are not 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.

These 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 an insurance risk pool in their state, their health insurance options are even more limited, especially if they are "uninsurable."

Fortunately, there is now another option that is available through American Medical & Life Insurance Company of New York, New York. This company is now offering a "Defined Benefit Health Insurance Policy" that will offer coverage to the "uninsurable" with only three restrictions.

They are as follows:

1.) Individuals may not be Medicare recipients.
2.) Individuals may not be receiving disability benefits.
3.) Individuals may not be receiving workers' compensation benefits.

There are no other underwriting requirements which means that regardless of someone's health history, they can obtain major medical health insurance coverage.

What exactly is covered by a Defined Benefit Health Insurance policy?

American Medical & Life Insurance Company has four different Defined Benefit Health Insurance Policies to choose from.

Below are a list of benefits on the best of the four different plan options. Remember, All benefits are provided on a "first dollar" basis, which means that you don't have to pay your deductible first to receive these benefits.

$1,000 per day covered for the first 100 days of hospital admission
$2,000 in additional coverage for the first day of hospital admission
$1,000 in additional coverage for the first 15 days of Intensive Care or Critical Care
Unlimited inpatient our outpatient Surgical Benefit provided on all plans
One Preventative Care Visit is covered per insured per calendar year with a $150 allowance for that visit
Up to 7 outpatient doctor office visits included with the with no co pay or deductible required
Mail order Generic & Brand name medications are discounted at up to 50%
Medically necessary diagnostic tests and x-rays performed in a doctor's office or outpatient facility (e.g. MRI, CAT Scan, EKG, Mammography) are covered up to $400 per visit with a 5 visit allowance per year
There is a 12 month waiting period for Pre Existing conditions. However, because the plan is HIPAA compliant this waiting period will be waived if you have a Certificate of Creditable coverage from another health insurance plan showing 18 months of prior coverage with no lapse of more than 63 days
$5,000 of Critical Illness coverage provided for Primary Insured & Spouse (optional on other 3 plans)
Nationwide P.P.O. network (www.multiplan.com)

Arguably, these benefits rival the "first dollar" benefits provided on most major medical health insurance policies on the market today. And, the most attractive part about this kind of health insurance policy is that the premium required is typically well below half the premium required for ICHIP and other state insurance risk pools.

Additionally, just like the state insurance risk pool coverage, a Defined Benefit Health Insurance policy is fully HIPAA compliant. This means that if you are coming off of an employer sponsored Cobra continuation plan and can produce a certificate of "creditable coverage" from this prior carrier showing that you had 18 months of prior coverage with no lapse of more than 63 days, your pre existing conditions will be covered immediately. This means that you will not be subject to 12 month waiting period for pre-existing conditions.

While a major medical health insurance policy is always the best way to insure yourself against the catastrophic illness and endless medical bills, a Defined Benefit health insurance policy is, most certainly, a cost effective way to protect yourself if you are rendered "uninsurable" on the individual health insurance market.

Without a doubt, this is the finest Defined Benefit health insurance policy on the market today. Especially since many of the offers that target the uninsurable only consist of discounts on medical services. Although clever advertising is often used, discount plans, like "Care Entree" or "Ameriplan" which promise an entire family health coverage for $89 a month DO NOT health insurance!

This "health coverage" referred only a discount and it is so inexpensive because it provides nothing more than P.P.O. repricing which is the same reduced rate insurance companies often negotiate for medical services. Although not necessarily a bad thing for someone who has NO OTHER OPTION, a discount health plan should NEVER be confuses with Health Insurance Coverage.

Without a Major Medical or Defined Benefit health insurance policy, an individual can experience catastrophic medical bills with these types of "health plans." If the average P.P.O. discount on medical procedures performed within a P.P.O. network is between 25% & 40%, a 40% discount on a $100 doctor office visit is a good deal because the visit will only cost the discount card holder $60. However, if the medical bill is $100,000 and the discount card holder has to pay 60% of the bill, the $89 a month "discount health plan" is anything but a good deal. (60% of 100K = $60,000....Yikes!)

For more information on the Guarantee Issue Defined Benefit Health Insurance Plan, other Major Medical Plans and tips on how you can tell if a discount plan is actually "health insurance," please visit our web site @ www.smallbusinessinsuranceservices.com

If you have been classified as "uninsurable" and you want to check out rates and apply online for the aforementioned Defined Benefit Health Insurance plan offered through the Association for Independent Managers (AIM) click this link: aimhealthplans.com

Plans are underwritten by American Medical and Life insurance Company of New York, New York and are available in all 50 states.

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.

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Fri, 25 Jul 2008 10:51:03 -0700

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

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" and sadly the "Little Guy" has no recourse. But this is not the case today! After many years of repeated violations of insurance conduct laws the NAIC- (National Association of Insurance Commissioners) has levied one of the largest market conduct fines in insurance history against Mega Life & Health insurance company, Midwest National Life insurance company, a.k.a. Health Markets, a.ka. NASE - National Association for Affordable Services, formerly known as U.I.C.I. The fine is 20 Million Dollars and in my informed opinion, it is not nearly enough and it has come much to late!

Health Markets has been slinging their garbage for many years across the country to many thousands of innocent consumers who had no idea the extreme limitations included with the so called insurance coverage provided by Mega & Midwest. They have consistently offered "schedule plans" which pay out an average of only $100,000 per illness (even though the policy is sold as a plan that covers you to One Million or Two Million lifetime). Their coverage traditionally also has no "stop loss number". This has lead to many innocent consumers suffering catastrophic financial losses.

The lack of a "stop loss number" is a very dangerous policy design. To further explain. The term 80/20 is often used when describing how a health insurance policy works. The typical major medical health insurance policy has an 80/20 of $10,000 "co-insurance" percentage split. This quite simply means that after you have satisfied your calendar year deductible the insurance company will pay 80% ($8,000) and the insured will pay 20% ($2,000) of the first $10,000 in medical bills that you incur. This first $10,000 is known as the "stop loss number". After this brief sharing arrangement is over the insurance company pays 100% up to $5 Million per insured for the rest of that calendar year for in network treatment. Everything starts over again on the first of each subsequent year. This greatly reduces the risk to the insured and it is a standard policy design feature included with most legitimate health insurance policies.

In stark contrast, in the case of the "schedule plans" offered through the two aforementioned companies, the terms "co-insurance" and "stop loss" are very rarely if ever discussed with a prospective insured. This is because they have a direct effect on how much the insured will pay in the event of a worse case scenario. Worse yet, Mega & Midwest have traditionally been offering their policies with No Stop Loss Number. This means that if the bill is One Million Dollars, the consumer would pay 20% of that amount ($200,000) before the insurance company would pay 100%. However, with the $100,000 maximum pay out per illness clause included with their insurance contract, Mega & Midwest would still only be responsible for $100,000 regardless of the size of the bill! What a sweet deal for Mega & Midwest. Arguably the worse part about the coverage they offer is the fact that it costs the same or more than a major medical policy without all of the dangerous limitations included with their schedule plans.

Would you buy a policy like that if it was fully explained to you? Most definately not, and the NAIC apparently agrees. This is the primary reason why after a 3 year 29 state investigation, Health Markets has finally had to face up to all the fraud they have been responsible for. On May 29th, 2008 they were hit with a $20 Million fine. Furthermore, a scathing "Market Conduct" report has been written as well. To read all about it visit: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/RSA05292008Final.pdf
Market Conduct Report: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/MegaReportFinal.pdf

If you or a loved one have fallen victim to this organization and have purchased one of their "insurance products" please do not hesitate to contact me via the contact us page of our web site @ www.smallbusinessinsuranceservices.com for a complete review of your situation and an immediate replacement of your coverage. The risk to you and your loved ones is much to great if you remain "insured" by any of the policies offered by this organization. You can also contact me directly toll free (866) 724 7123 or via email: steve@sbisvcs.com

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More about tax deferred health savings accounts

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Wed, 01 Aug 2007 22:12:01 -0700

The acronym "H.S.A" is being tossed around quite a bit nowadays especially since the tax advantages of owning an H.S.A. and a corresponding qualified H.D.H.P (High Deductible Health Plan) have been significantly increased under the 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 in H.S.A. law for the year 2007 please Click here: http://www.treas.gov/press/releases/hp209.htm

H.S.A. stands for Health Savings Account. Health Savings Accounts are a unique way to attractively manage your health insurance costs. They were originally named M.S.A'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 H.S.A. qualified H.D.H.P. (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 when he approached Congress back in the 1990's. His answer to Congress was quite 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 H.S.A.'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 (H.D.H.P.) with a yearly family deductible between $2,200 per family (not per person) or as high as $5,650 per family we will call that an H.S.A. qualified health insurance plan (H.D.H.P.) 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 H.S.A. qualified health insurance plan (H.D.H.P.) the option to open a tax favored H.S.A. (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 H.S.A. an amount equal to the size of your chosen plan deductible. So if a family chooses an H.D.H.P. with a $5,650 yearly family deductible then that family can deposit an amount equal to that number each year and an additional $800 a year (in 2007) for each insured who is over the age of 55 (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 $6,450 and they can take a 100% tax deduction for that contribution similar to an I.R.A.

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 I.R.S. will allow them to pull out that money that they put into their optional tax deductible, tax deferred H.S.A. savings account to pay for those expenses. When they use their H.S.A. money to pay for those expenses the I.R.S. will allow them to write those expenses off at a 100% tax deduction. The list that the I.R.S. allows them to spend their H.S.A. 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 H.S.A. section of the I.R.S. web site here: http://www.irs.gov/publications/p502/index.html

Arguably the most attractive tax advantage to owning an H.S.A. is the fact that the money left over in the H.S.A. 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! To learn more about H.S.A.'s and the recent federal legislation that has made them even more attractive to people over the age of 55 click here: http://www.treas.gov/offices/public-affairs/hsa/about.shtml to read all about them on the Federal Governments H.S.A. educational web site.

If you are an employer and are considering H.S.A. 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 percent in some cases relative to other forms of insurance. For more details about the advantages to the employer please click here: Click here: U.S. Treasury - HSA Frequently Asked Questions

Please "Contact Us" with questions about H.S.A.'s. If you have a C.P.A. or tax advisor please feel free to ask he or she about the advantages of owning an H.S.A. as well. You can run your own quotes and learn even more about H.S.A. qualified H.D.H.P.'s via our web site here: http://www.smallbusinessinsuranceservices.com/HSA%20&%20HDHP.html

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10 Questions You Should Ask Your Health Insurance Agent

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Thu, 19 Apr 2007 12:42:30 -0700

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 to 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!"

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

nobody@vox.com(www.smallbusinessinsuranceservices.com) — Wed, 18 Apr 2007 21:06:37 -0700

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.

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