Welcome to MyMajorMedical.com's Blog site. We hope you enjoy our articles related to current news in the insurance industry.
March 26, 2010
Why Dental Insurance?
With dental insurance plans for you and your family, we can help make it easier to keep your smile healthy. From dental cleanings to root canals, it can be difficult to predict how much money you're going to spend for your dental care. Our individual dental insurance plans provide you with the coverage you need to promote good dental health.
With either of our dental plans, you can take advantage of:
- Preventive care is covered at 100% with NO deductible or waiting period.
- Access to an extensive dental network that today has over 73,000 dentists.
- Basic and Major Services have only a $50 calendar-year deductible per person, plus it is capped at 3 individuals per family - so if you have a family of 4, 5, 6 or even more you're only responsible for paying $150 in deductibles for the whole family!
- We pay 80% for Basic Services like cavity fillings and tooth extractions after the initial waiting period is exhausted and the deductible is met.
- We pay 50% on Major Services like root canals and bridges after the initial waiting period is exhausted and the deductible is met.
March 9, 2010
What drives insurance costs?
Insurance premiums reflect the cost of care
• Rising health insurance costs reflect increasing demand and the underlying costs of medical care, i.e., physician, hospital, pharmaceutical and diagnostic costs.
• The goal in pricing is to match expected medical cost increases with premiums, while helping patients hold down costs and access the most appropriate quality care.
Premium increases are driven by underlying medical costs. The government’s own data confirm that it is rising medical costs that drive US health spending.
• According to CBO and HHS data, fewer than 7 cents of every dollar of US health spending is on “administration and the net cost of private insurance.”
• Over the past five years, rising hospital, physician and drug costs accounted for 75 cents of every dollar increase in national health care costs. Health insurance plans accounted for just one-twentieth of the increase.
• For 2010, we are expecting net medical costs to increase by about 8% (+/-50bps).
• Sharply rising hospital costs are the main cause of these rising medical costs for consumers and employers. Inpatient costs are expected to rise by 11.5% to 12.5%.
• Two-thirds of our 2010 medical cost increases are expected to be from hospitals and doctors charging higher prices, compared to one-third due to increased treatment volumes.
• Prices of many branded and specialty drugs are rising sharply – in some cases by 20%-40%.
Many factors explain why US medical costs are rising, including
a) health care provider price inflation,
b) greater volumes of treatment, and
c) the rising burden of chronic disease
Massachusetts Attorney General Martha Coakley reported in January that higher prices are correlated to hospitals’ monopoly power or market leverage, rather than to their costs or quality.
A current report from the Center for Studying Health System Change found that, in California, growing physician and hospital market clout gives providers an upper hand in demanding higher reimbursement rates and is an underlying driver of increased premiums. The report, entitled “Unchecked Provider Clout in California Foreshadows Challenges to Health Reform,” published in the April issue of the journal Health Affairs, concludes, “the trends in California suggest an urgent need for policymakers to address the issue of growing provider market strength."
Treatment volumes are increasing:
HHS has just published data showing that over the past decade (to 2006/07):
• MRI/CT/PET scans tripled
• Hip replacements are up by a third
• Knee replacement surgeries shot up by 70%
• Kidney and liver transplantation rates are up by between 31-42%
• Statin usage is up nearly tenfold
Chronic disease and lifestyle-related health problems are driving demand:
Recent research from the United Health Foundation and experts at Emory University shows that on current trends, obesity will be contributing to more than a fifth of the nation’s healthcare costs by the end of the decade.
If we act as a nation – and if obesity levels can be held at their current rates – we could save almost $200 billion dollars – $820 for every adult in the country
Health insurers’ profits are low compared with other health care companies and overall businesses.
• Health plans’ net profits are less than a third of those for the health care sector as a whole (including pharma and hospitals).
• According to an August 2009 U.S. News & World Report, the profit margin for health insurance companies overall ranked 87th out of 215 industries.
March 8, 2010
Can I keep my health insurance if I change or lose my job?
If you change employers, you have the right to carry your group health insurance coverage with you to a new job for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
It will cost more since your employer will not be paying part of your premium. If you need COBRA benefits, you must fill out the appropriate forms within 60 days of leaving your job. If you do not act within that time, you may be denied coverage.
Health insurance under COBRA is available if you are in the following situations:
- You leave a company and become unemployed or self-employed for up to 18 months.
- You are a widow or widower or child of an employee who dies while working for the same company for three years or more.
- You are the divorced spouse or child of an employee who has left the company he or she was employed at for at least three years.
- You are the child of an employee who left a job and have not yet reached age 23.
March 4, 2010
Healthcare Reform Update
The proposal President Obama released on Feb. 22 calls for the establishment of a new Health Insurance Rate Authority. This agency will provide federal oversight of proposed health insurance rate increases. If the new federal agency determines that a rate increase is “unreasonable and unjustified,” it can require health insurers to “lower premiums, provide rebates, or take other actions to make premiums affordable.”
We are concerned that the new agency creates a one-size-fits-all approach to rates and ignores unique cost drivers in each state’s insurance market. Because state regulators will not have control, plans may not have adequate funds to pay claims. Once that happens the government will take control of our complete healthcare system and then we will have government run healthcare.
March 3, 2010
How do I choose a health plan?
Whether your employer gives you a choice of plans or you need to purchase your own coverage, it is crucial that you understand your health insurance choices and pick the insurance that is best for you and your family.
Here are some questions you should ask yourself when choosing a health insurance plan:
How affordable is the cost of care?
- What will my monthly premium be and can I afford it?
- Should I try to insure most of my medical expenses or just the large ones?
- What deductibles will I have to pay out-of-pocket before insurance starts to pay my medical expenses?
- After I have met my deductible, what percentage of my medical expenses are reimbursed?
- How much less will I be reimbursed if I use doctors outside the insurance company’s network?
Does the insurance plan cover the services I am likely to use?
- Are the doctors, hospitals, laboratories and other medical providers that I use in the insurance company’s provider network?
- If I want to use a doctor outside the network, will the plan still pay?
- How easily can I change primary-care physicians if I want to?
- Do I need to get permission before I see a medical specialist?
- What are the procedures for getting care and being reimbursed in an emergency situation, both at home or out of town?
- If I have a preexisting medical condition, will the plan cover it and if so when will it be covered?
- Are my medical expenses covered in and out of the hospital?
- Are the prescription medicines that I use covered by the plan?
- Does the plan reimburse alternative medical therapies such as chiropractic treatment?
- Does the plan cover maternity charges?
March 2, 2010
What are the primary types of life insurance?
There are two primary types of life insurance—term and whole life. Whole life is sometimes called permanent life insurance, and it encompasses several subcategories, including traditional whole life, universal life, variable life and variable universal life.
Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.
There are two basic types of term life insurance policies—level term and decreasing term.
- Level term means that the death benefit stays the same throughout the duration of the policy. This is the most popular form of term life insurance. It can be purchased with a guaranteed level premium for the duration of the policy.
- Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term. This is usually purchased to cover a declining liability such as a mortgage or other type of loan.
Whole life or permanent insurance pays a death benefit whenever you die—even if you live to 100! There are three major types of whole life or permanent life insurance—traditional whole life, universal life, and variable universal life, and there are variations within each type.
In the case of traditional whole life, both the death benefit and the premium are designed to stay the same (level) throughout the life of the policy. The cost per $1,000 of benefit increases as the insured person ages, and it obviously gets very high when the insured lives to 80 and beyond. The insurance company could charge a premium that increases each year, but that would make it very hard for most people to afford life insurance at advanced ages. So the company keeps the premium level by charging a premium that, in the early years, is higher than what’s needed to meet their obligations and then using it to supplement the level premium to help pay the cost of life insurance at an older age.
By law, when these “overpayments” reach a certain amount, they must be available to the policyholder as actual cash value if he or she decides not to continue with the original plan. The cash value is an alternative, not an additional, benefit under the policy.
In the 1970s and 1980s, life insurance companies introduced two variations of the traditional whole life product—universal life insurance and variable universal life insurance.
March 1, 2010
How much life insurance do I need?
In most cases, if you have no dependents and have enough money to pay your final expenses, you don’t need any life insurance.
If you want to create an inheritance or make a charitable contribution, buy enough life insurance to achieve those goals.
If you have dependents, buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur to replace services you provide (for a simple example, if you do your own taxes, the survivors might have to hire a professional tax preparer). Also, your family might need extra money to make some changes after you die. For example, they may want to relocate, or your spouse may need to go back to school to be in a better position to help support the family. You should consider buying enough life insurance to at least replace 12 to 15 years of income. Maybe more if your children are very young.
You should also plan to replace “hidden income” that would be lost at death. Hidden income is income that you receive through your employment but that isn’t part of your gross wages. This is an often-overlooked insurance need: the cost of replacing just your health insurance and retirement contributions could be the equivalent of $2,000 per month or more.
Of course, you should also plan for expenses that arise at death. These include the funeral costs, taxes and administrative costs associated with “winding up” an estate and passing property to heirs. At a minimum, plan for $20,000 to clean up the loose ends.
February 25, 2010
What is a Medicare Advantage Plan?
In the past, Medicare beneficiaries always had the option of Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). In January 2006, beneficiaries had the opportunity to add Part D (Prescription Drug Coverage) with a separate premium. Many have wondered where and what is Medicare Part C. Medicare Part C Plans combine Medicare Parts A, B and D into one plan with no separate premium for Part D. These plans are known as Medicare Advantage Plans. You now have the option of enrolling in a Medicare Part C Plan. These plans allow beneficiaries to enroll in a plan that fits their needs and ensures great coverage for a great price.
When enrolled in a Medicare Advantage plan, members are still covered by Medicare, but they are getting health care and prescription drug coverage through one plan. There is no separate premium for Part D drug coverage.
How will a Part C Medicare Advantage Plan benefit me compared to Original Medicare?
When you choose a Medicare Advantage Plan, you normally get:
1) More benefits than Original Medicare
2) Low monthly plan premiums
3) No deductibles on most plans
4) Prescription drug savings
5) No separate premium for Part D Prescription drug coverage
6) Plan extras
7) Predictable costs that are easy to budget
8) No need for Medicare Supplement Policies
9) Worldwide coverage for emergencies
10) More for your health care dollar
February 24, 2010
Why are healthcare costs rising?
Health insurance companies base their premium rates on the amount of claims they've paid in the past and what they expect future claims to cost. When insurers pay out more in claims than they receive in premiums, and when future services are predicted to cost more, premiums must go up to cover these costs.
Many factors contribute to the rising cost of healthcare. Some of the factors are things that consumers, healthcare providers (doctors, hospitals and other healthcare professionals) and health insurance companies can work together to control.
Other factors are beyond anyone's control. For example, no one can control the fact that our population is getting older. And people tend to have more medical needs as they grow older. When you multiply the higher cost of each service by a greater demand for more services, you have an equation for higher costs.
Here are some of the factors that contribute to the cost of healthcare:
- Advances in medical technology - State-of-the-art technology gives us wonderful results. But it comes with a huge price tag.
- Prescription drug advertising - As you have probably noticed, drug companies are spending millions each year on direct advertising to the general public.
- Government mandates and regulations - Federal or state requirements add $10 billion per year to health insurance premiums.
- Treatment for the uninsured and underinsured – This causes overall insurance premiums to rise for those who do have coverage. More than 40 million Americans do not have health insurance, including about 700,000 Louisianians.
- Litigation, class-action lawsuits and malpractice insurance - These costs add $5 billion to premiums overall.
- Overuse of emergency rooms for routine care - The emergency room is, hands down, the most expensive place to receive medical treatment.
- Fraudulent medical billing and insurance abuse – Fraud costs Louisianians as much as $1 million per day.
- Cost shifting – This cccurs when doctors and hospitals need to cover the cost of treating patients who can’t pay their bills. They shift that cost to patients who can pay or have insurance.
- Unhealthy and unsafe lifestyle choices - Many serious illnesses, ranging from heart disease to diabetes to some cancers, are linked directly to poor diet and lack of exercise. Smoking, alcohol abuse, driving while intoxicated and lack of seatbelt use all contribute to accidents and illnesses that drive up the cost of healthcare.
As you can see, there are many factors that contribute to the cost of healthcare. Together, these factors ultimately drive up the premiums you pay for health insurance. Getting the cost of healthcare under control is not an easy task. It will take the efforts of healthcare providers, health insurance companies, lawmakers and consumers to have an impact.
February 23, 2010
Create your own healthcare reform with an HSA insurance plan!!!
What is an HSA plan?
A Health Savings Account (HSA) combines high deductible health insurance with a tax-favored savings account. Money in the savings account helps pay the deductible and other out of pocket medical expenses. Once the deductible is met, the insurance company starts paying. Any money left in your savings account earns interest and is yours to keep. This is not a "use it or lose it" account.
A Health Savings Account is:
- Tax-deductible - Contributions to the HSA are 100% deductible (up to the legal limit) - just like an IRA.
- Tax-free - Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed.
- Tax-deferred - Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free.
- HSA money is yours to keep - Unlike a Flexible Spending Account, unused money in your HSA isn't forfeited at the end of the year; it continues to grow, tax-deferred.
Why High Deductible Health Insurance?
To get the benefits of an HSA, the law requires that the savings account be combined with high deductible health insurance. High deductible health insurance costs less than traditional lower deductible coverage with expensive copays because the insurance company doesn't have to process and pay claims for routine, low-dollar medical care.
How does an HSA plan work?
An HSA works in conjunction with high deductible health insurance.
Your HSA money can be used to help pay the health insurance deductible and qualified medical expenses not covered by the health insurance, including dental and vision.
Any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate plus 10% tax penalty if you're under 65.
If you meet the deductible with covered expenses, your health insurance policy pays remaining covered expenses in accordance with the terms and conditions of your particular plan.
What are the benefits of an HSA?
High Deductible Health Plan:
- Costs less than more traditional co-pay plans without sacrificing coverage
- Gives you more control over your healthcare
- Used to meet your deductible
- Deposits are tax deductible from your gross income
- Interest earned is tax deferred
- NEVER taxed when used for qualified medical expenses
- Funds roll over year after year -- no "use it or lose it"
- Portable, also goes with you
Other Uses for Your HSA:
- Health premiums when you're between jobs
- Qualified long-term care premiums
- Health premiums after age 65 (but NOT Medicare supplements)
- Living expenses -- after age 65 -- pay ordinary income taxes
February 22, 2010
A Surprising Answer - Who Sets the Prices for our Healthcare?
When asked who is responsible for the high cost of our healthcare, many may answer, "The insurance companies." However, who sets the prices for a tonsillectomy, a 2-day hospital stay, or a 30-day supply of blood pressure medicine? The answer is:
- and Pharmaceutical Companies.
The medical community sets our healthcare prices, from the fees for a doctor's visit or surgery, to the cost of every prescription and non-prescription drug in your medicine cabinet.
Insurance companies do not set the prices charged by doctors, hospitals and drug companies anymore than your auto insurance carrier sets the price of your car. Rather, the insurance industry works tirelessly and directly, through on-going negotiations with healthcare providers, in a constant effort to prevent healthcare costs from rising even more.
Frivolous lawsuits contribute to the enormous fees charged by doctors and hospitals, as well as the exorbitant prices of pharmaceuticals. Tort reform will help reduce the inflated fees that the medical community charges for their services and products.
Until government retools its strategy to reduce healthcare costs by focusing on who actually sets the prices for our healthcare and the reason those costs are so high, the problem will remain unsolved and costs will continue to skyrocket.
The American people have rejected the takeover of our insurance industry by the government, and for good reason. Insurance companies are not the problem. Your insurance premium is in direct relation to the price charged for healthcare services you receive. Insurance companies do not set the price of healthcare procedures. Future efforts must focus on those who do establish these prices.