Health insurance began in the 1930s with the Blue Cross offering pre-paid hospitalization. With its success, physicians formed Blue Shield. Prior to that time, there was little demand for health insurance in the U.S. Insurance to cover lost wages because of illness was much more important than health insurance. Advances in health care as well as higher costs drove the need to develop health insurance.

After the success of Blue Cross and Blue Shield, commercial insurance companies began to offer group insurance. The plans offered were Major Medical Plans. Since that time, different types of plans have developed, offering consumers choices.

Major Medical

In Major Medical Insurance, the insured is responsible for paying a deductible before insurance pays benefits. Then, the insurance companies pay 80% of the medical bills and the insured would be responsible for the remaining 20%. The insured can choose to go to any doctor or hospital to receive services, pay the provider directly, and then be reimbursed 80% of the bill by the insurance company. The insured can sign a release requesting the insurance company pay the health provider directly and would then be responsible for paying the doctor or hospital the remaining 20%. When people speak about “traditional health insurance,” they are referring to Major Medical Health Insurance.

HMO

An HMO, Health Maintenance Organization, is a type of insurance plan that focuses on the long term care of its insured and is normally less expensive than a Major Medical Plan. Each patient has a Primary Care Physician, who is responsible for providing preventive care and coordinating care for the patient if additional specialists or hospitalization is necessary. This keeps costs down. In addition, limiting choices, such as choosing physicians only within a network and not covering services that are deemed unnecessary, controls costs. HMOs are considered “managed health care.”

PPO

A PPO, Preferred Provider Organization, is similar to an HMO as there is a network of physicians, but unlike an HMO in that an insured is not limited to network physicians and can see any doctor they choose. However, co-payments and deductibles will be less for in-network services. In addition, network physicians determine reasonable charges therefore, if an out-of-network physician charges more for services, the insurance company will still pay only 80% of the in-network charges. The insured will often pay higher fees for out-of-network services. Some people prefer the freedom to choose their own doctors and not be limited to a network.

POS

A POS, Point of Service, is considered to be a combination of a PPO and an HMO. The insured chooses a Primary Physician and all health care should start with the patient consulting this physician. This doctor authorizes a referral to a specialist, in or out of the network. (In HMOs, specialists must be within the network for the insured to be covered.) If a patient sees a specialist without a referral, the insurance company may choose not to pay for the services. A POS plan is also considered a managed health care plan, but the insured has more options than in a HMO.

Although employees do not often have a choice in what type of health plan they have, it is important to understand the differences. Some companies do offer several different plans to choose from and individuals and those that are self-employed need to be able to choose a plan that fits their needs as well as their budget.

- about.com -

Think that high cost gives you an excuse not to have health insurance? Think again! Unpaid medical bills are one of the biggest causes of bankruptcy. Not having health insurance isn’t an option.

But here’s how you can save money: consider switching to a Health Savings Account (HSA).

HSAs are great for people who don’t go to the doctor often. If you’re young, healthy, or have grown kids, then an HSA can be an excellent alternative to the usual, expensive health insurance plans of PPOs and HMOs. A typical HSA can save you hundreds of dollars a month while still providing you with quality health coverage.

How Much Can I Save?

Well, that depends on you and your needs. Here’s how much one listener saved:

“I just wanted to thank you for saving my daughter thousands of dollars on health insurance. Your Endorsed Local Provider [ELP] set her up with an HSA. She’s saving $350 a month on premiums for a family of four!”
—Bonnie in Florida

With the money you’ll save, you can pay off any debts or invest that amount toward your retirement.

Getting Started With an HSA

Many companies now offer HSA plans along with their traditional plans. If you’re company doesn’t, then talk with a health insurance ELP about setting up a private HSA for you or your family. Often times a private HSA can save you more than your company HSA.

Just remember that your individual health needs and the area in which you live can drastically affect your options. Before you make any change to your insurance coverage, it’s best to get the advice of a health insurance ELP.

- daveramsey.com-

Surveys have found most of the 159 million Americans covered by employer health insurance plans spend less than 30 minutes picking a plan each fall. But is that enough time? Because of health care reform, experts say, most employees will be seeing big changes in their benefits this year. What to look for:

Plan for price hikes

The rising cost of medical care and new requirements of the reform bill are expected to increase employers’ health costs by about 9 percent next year. To compensate, experts say, firms will raise co-pays and deductibles, the amount paid out of pocket before coverage kicks in.

According to the consultancy Mercer Health & Benefits, about 20 percent of companies are also considering making employees with more dependents pay a larger share. For people who could be covered under a spouse’s plan, Barry Schilmeister, a partner with Mercer, suggests doing a fresh comparison to find out whether switching might mean more savings.

Is your doctor in?

Many doctors and hospitals are being “very aggressive” in their negotiations with insurers this year, says Dean Hatfield, national health practice leader for Sibson Consulting, so employees shouldn’t assume their current MD and hospital are still in their insurance network. Those who lose a favorite practitioner may want to opt for a plan with good out-of-network coverage. Another change to look out for: In 2011 the pretax flexible-spending accounts used to cover extra health expenses can no longer be used for over-the-counter drugs unless a doctor writes a special prescription.

Check for new benefits

Not all changes will hurt. Hatfield estimates as many as one in five employers will offer plans with incentives designed to keep employees healthy—like waived co-pays for the inhalers that help asthmatics keep their disease in check. Many employer health plans will be required by law to make other consumer-friendly changes as well, including reimbursing patients equally for emergency room care received at both in-network and out-of-network hospitals.

- smartmoney.com -

If you worked for an employer that offered health benefits, when you decide to retire early or lose your job, it becomes quickly apparent how valuable that benefit was. Generally, when an employer offers health insurance coverage, the premium costs are split between you and the employer. Whether it is $20 or $300 per paycheck, you’re generally only paying a portion of the total premium in a large group plan. So, what happens when you are no longer employed and eligible for these benefits?

Your Options for Coverage

When you terminate service with your employer, regardless of whether or not it is voluntary, you probably won’t be able to remain on the employer’s group plan unless the termination comes with some sort of severance package. Even then, the duration of coverage is typically limited to a few months.

Your first option, if you’re married, is to check with your spouse’s employer to see what type of health coverage is available. Typically the employer-sponsored group plans will be the most affordable, so that should be your first resource. If that isn’t an option, you should also check with any associations or professional organizations that you or your spouse may be a part of as they can sometimes offer group plans.

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), most employers are required to provide continuing coverage through their plan that can last for up to 18 months, or in some special cases, as long as 36 months. With COBRA you are required to pay the entire premium for the group policy plus any administrative costs.

For example, if you were paying a $50 premium for your health benefits bi-weekly, and your employer was paying the remaining $100 of the premium–under COBRA you would be required to pay around $150 every two weeks, or about $300 per month to continue that coverage.

Finally, if you aren’t eligible for COBRA or would like to explore other alternatives, you can explore individual health insurance policies. Unfortunately, individual policies can be expensive, and they may require a physical examination and may not cover preexisting conditions which would be covered by a group plan.

What to do When COBRA Expires

Fortunately, most of the time you would be eligible for COBRA and that could provide coverage for at least 18 months and possibly longer, but what happens when that runs out? Thanks to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), those who exhaust their COBRA benefits are eligible to receive an individual policy that covers themselves and dependents without the preexisting conditions restriction.

Of course, individual policies will likely cost more than a group policy, but you can at least obtain full coverage without worrying about preexisting conditions being denied. There are a lot of individual health insurance providers out there, so be sure to examine your options carefully before making a decision.

One thing to be aware of with HIPAA is that this continued coverage requires that you have continuous coverage with no significant gaps in coverage. For HIPAA specifically, the maximum gap allowed is 62 days. If you have a gap of 63 days or more of coverage, you would be ineligible.

Early Retirement Coverage

If your termination of service from your employer is due to an early retirement, you’ll want to explore the possibility of early retiree benefits. Individuals are not eligible for Medicare until age 65, so if you retire at any point prior to turning 65, you’ll need to find coverage to bridge that gap.

Some employers offer assistance for early retirees where you are allowed to continue coverage through COBRA, and when that is exhausted, you can join their early retiree group plan until you reach Medicare eligibility. This type of coverage is not required by law and is only a possible benefit, so make sure you explore all of your options before deciding to take an early retirement.

- financialplan.about.com -

Far too many U.S. children and adults are going without vaccinations because their health insurance does not fully cover the immunizations they need, according to a recent report from the Institute of Medicine.

To address the problem, the report recommends that the nation’s private and public health plans be required by law to provide insurance coverage for child and adult vaccinations, and that the government reimburse insurers for the costs associated with such vaccinations. The report also calls for the federal government to provide vouchers so that uninsured children and adults can receive vaccinations from the providers of their choice.

If enacted, the changes would transition the U.S. vaccine system from one that buys vaccine supplies to one that ensures immunizations are administered, according to the report.

“Immunizations against common, dangerous diseases convey valuable health and societal benefits, but the higher price of newly developed vaccines and the outmoded system by which they are financed create significant financial burdens on health plans, consumers, health providers and vaccine makers,” said Frank Sloan, PhD, a Duke University economics professor and chair of the IoM committee that authored the report.

The United States has had a long involvement in financing vaccines, purchasing bulk supplies of polio and measles vaccines in the 1960s. In 1993, Congress created the Vaccines for Children program, which guarantees federally purchased vaccines to more than 10 million U.S. children. Government purchases of vaccines, costing $1 billion a year, account for more than half of U.S. vaccine sales.

While U.S. childhood immunization levels are currently at an all-time high, wide variations exist among states and urban areas, according to the Centers for Disease Control and Prevention, which requested the IoM report. Recent vaccine shortages have further focused the spotlight on the vulnerabilities of the vaccine system.

The report, “Financing Vaccines in the 21st Century: Assuring Access and Availability,” noted that 16 percent of children who are covered by private health insurance are in plans that exclude benefits for immunizations. Because such children are not officially uninsured, they don’t qualify for government-sponsored vaccine programs and therefore may be more likely not to receive immunizations.

State policies that require students to receive vaccinations before beginning school help ensure that children get immunizations, but vaccination requirements vary widely from state to state. In 2002, a CDC survey of school nurses in the District of Columbia found that 50 percent of students needed one or more vaccinations to meet school requirements.

About 105 million adults ages 18 to 64 who have private insurance are in plans that don’t cover immunizations. Combined with the 30 million adults younger than age 65 who are estimated to be uninsured, 75 percent of adults in that age group lack immunization coverage, the report concluded.

Although older adults require fewer vaccines than children, recommendations call for them to be vaccinated against high-risk diseases such as pneumonia, influenza and hepatitis. Most of the 36,000 Americans who die of the flu annually are older adults.

The amount of immunization coverage an American receives under her or his health insurance plan often varies by their type plan type, the report found. While health maintenance organizations frequently cover immunizations as a basic benefit, preferred provider organizations often have more limited immunization benefits.

The number of Americans who are covered by preferred provider organizations has increased in recent years, representing 52 percent of employer-based enrollment, meaning that more people may face barriers to immunization.

The high price of new vaccines also presents a roadblock to expanding immunization coverage, the report found. About 20 doses of vaccines targeting 11 diseases are recommended for U.S. children, costing the public sector about $400 and the private sector about $600.

When newer, more expensive vaccines such as pneumococcal conjugate — which provides protection against many serious infections — were added to the recommended list of child vaccines in recent years, expenditures for the Vaccines for Children program jumped, increasing from $500 million in 2000 to $1 billion in 2002. As new vaccines are developed, licensed and produced, continued cost increases will occur, the committee predicted.

While vaccines provide a savings in health care costs in the long run by preventing disease, health agencies have to shoulder the short-term costs of buying and delivering vaccines, the report noted.

- www.medscape.com -

This question would be much easier to answer if our health insurance marketplace were not so complex. Unfortunately, the average health insurance premium depends on a variety of factors:

• Insurance type: There are several different types of health insurance, including job-based coverage, individual policies, and government-funded plans like Medicare. The premium costs associated with each type of insurance varies.

• State: Many job-based plans, and all individual policies, are regulated at the state level. This means that each individual state has its own rules governing insurance policies bought and sold within that state. These rules can have a significant effect on premium rates.
• Age: In most states, insurers selling individual policies can vary premiums according to the age of the insured.
• Benefits: People often have a choice about what benefits they would like in their insurance plan. For example, many jobs allow employees to select from two or more job-based health plans. Insurance companies selling individual policies may have a wide array of plans available, including HSAs or high-deductible plans, as well as more comprehensive options. Medicare Part D allows seniors to choose from hundreds of prescription drug plan options. These options vary in price.

• Health Status: Job-based health plans cost the same for every employee on the plan, regardless of their health status. However, in most states, insurers can charge higher premiums for individual coverage (or deny coverage outright) if the applicant has a preexisting medical condition.

Most people looking into the average cost of health insurance are seeking an individual policy. The Association of Health Insurance Plans, an insurance trade group, conducts a survey of individual policies each year. In December 2007, they issued a report with information about average premiums sorted by age, as well as average premiums by state.

If you look at the charts on pages 7 and 8 of this report, you will see how much the average premiums vary. However, you can apply this information to your personal situation to get a “ballpark” figure. Please note that these figures ONLY apply to individual policies and do not take into account the benefits associated with the policies. This is an average, which means that some plans may cost a lot more, and some may cost a lot less.

The federal government tracks average spending on health insurance for people with job-based coverage. The most recent figures are from 2005, and indicate that the average individual’s job-based premiums were $3,991 that year, while families spent an average of $10,728.

- healthinsurance.about.com -

When you retire, it’s still important to think about your family’s needs and protecting those assets that you intend to pass along after your death. There are several types of insurance you can consider.

Health insurance

Health insurance typically reimburses you for health and dental expenses not covered by the provincial healthcare plan. Just as with life insurance, the younger you are when you apply for your health insurance policy, the lower your premiums are likely to be.

A good policy covers the costs of prescription medications, medical supplies, vision care and medical coverage if you are travelling. It will also cover extended hospital stays and special home care.

Critical illness insurance

Critical illness insurance can give you extra resources when a medical diagnosis takes you by surprise. It pays a tax-free cash lump sum if you are diagnosed with a condition covered by the policy. Typically, serious conditions such as cancers, heart attack, stroke or coronary bypass are covered.

You are free to use the cash any way you want: to pay for treatments, equipment and expenses or to spend it otherwise, such as for a family vacation.

Long-term care insurance

Long-term care (LTC) insurance can be there to help when you are unable to care for yourself. It provides money for stays in nursing homes and chronic care facilities, or for the services of an in-home caregiver. Longer life expectancies, lower investment returns and the rising costs of nursing care that could devour your retirement savings make LTC insurance worth considering.

Know your needs

Life insurance can be used to

• cover many of the expenses that will arise when you die
• protect your assets for your heirs
• continue income for the people who depend on it
• cover debts, funeral costs, legal and executor fees
• pay any income taxes you owe at death
• help grandchildren, especially for their education
• provide support for charities that you care about

The cost of life insurance depends on your age, medical history and living habits. You can significantly lower the cost by starting a policy when you’re young, by living a healthy lifestyle and by staying healthy. All insurance companies ask questions about your medical history, including whether or not you smoke, and it’s common for them to require medical tests to verify your health.

Buying insurance is like buying anything: you want the best value for your money.

- www.vancity.com -