7 posts tagged “c. steven tucker”

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.

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!

To illustrate how Bill's idea works in the real world. We will use a real world example. Tony & his wife are currently paying $1,134 a month for Cobra continuation coverage from a previous group plan. In comparison, the monthly premium for an HSA qualified HDHP (High Deductible Health Plan) which covers each insured family member up to $5 million dollars is less than half of the premium that they are paying now ($481.64 monthly to be exact). This is a yearly savings of $7,828.32 or a monthly savings of $652.36. This is a significant difference.

However the insured has to give up all of their outpatient co pays. Is this worth it? This was the question posed to Senator Bill Archer (R) when he approached Congress back in the late 1990's. His answer to Congress was simply "make it worth it".

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

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

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

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

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:

• Short Course in Brain Surgery
• Two Women
• The Lemon
• Dead Meat
• Socialized Healthcare

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.

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.

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:

1. The "agent" is not a licensed insurance agent but an "enrollment" or "membership" coordinator.
2. 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.
3. The official sounding "Association or Union" is one that you have never heard of before.
4. 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.
5. 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.
6. The plan offers "guaranteed" insurance coverage with no exclusions for "pre-existing conditions" and no "waiting periods."
7. The plan is significantly cheaper in price than other health insurance plans.
8. 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.
9. 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.
10. 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.

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.

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

Comments, such as:

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

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

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

A. YES. Become an INFORMED insurance consumer!

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

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

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

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

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

A. They almost always do not know the answers!

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

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

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

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

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

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

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

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

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

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

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

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

How many questions you were able to answer?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why?

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

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

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

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

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

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

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

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

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.