First, add the deductible for each plan you are considering and then add the coinsurance amount you are required to pay AFTER the deductible.  80%/20% and 70%/30% are common IN NETWORK examples of coinsurance where the carrier pays the higher percentage and you pay the lower percentage UP TO a maximum out of pocket amount.

Cost of a PPO plan (The Reality)

You have a Preferred Provider Plan (PPO) where you go to the doctor and pay copay for doctor visits.  The individual deductible is $3,500 and the individual coinsurance maximum
for an individual is $3,000. You’re total cost if you are hospitalized, have outpatient surgery would be $6,500.   You then take your monthly premium and multiply it by 12 and add this to the $6,500.   Let’s say your monthly premium is $350/12 = $4,200.  So now you know that in a year when something major occurs, you will have major medical expenses of $10,700.  Please be aware that these costs explain what
occurs for an individual not a family.

Let’s compare  High Deductible Health Plan with a monthly premium of $300 and a deductible of $2,700 and 100% coinsurance.   This means that after $3,600 of premium and $2700 = $6,300 the carrier pays 100% of the cost for the remainder of the year.   Before you get to excited you need to understand that YOU are responsible for the 100% of all medical expenses including prescriptions under this High Deductible Health Plan up to the deductible before this plan starts to pay for anything other than wellness.    We like our co pays but here’s the good news.  When you set up a qualified High Deductible plan, the government allows you to open a Health Savings Account (HSA) through a bank or the insurer carrier.  IN 2012, you can put up to $3,100 for an individual and $6,250 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,100 for an individual and $7,250 for a family).    THE BEAUTY OF THIS IS THAT ANYTHING YOU PUT INTO THE HSA is 100% tax deductible from gross income.

Don’t confuse an HSA with a Flexible Benefit Plan where you lose your money at the end of the each year.  With an HSA, it’s your money and as it sits in your HSA, interest earnings accumulate tax-deferred similar to an Individual Retirement Account.  At any time you can use the funds in the account to actually pay providers for a wide variety of medical expenses.

Wellness visits are covered 100% by the HSA so if you are a generally healthy individual and fund your HSA account on a monthly basis with let’s say $100, by the end of the year you would have $1,200.  During the year you go to the doctor for a cold.  You get a bill from the doctor’s office is $300.   The charges are then discounted because this doctor has agreed to accept the insurer carrier’s negotiated fee and now the bill is $200.   You write a check or use a credit card tied to your HSA and your insurance deductible is reduced by the insurer by that same $200.   This process works for all medical & dental care whether hospitalization, prescriptions or doctors visits.    At the end of the year, $1,000 is still in the account and is available for a wide variety of qualified expenses. http://www.irs.gov/pub/irs-pdf/p969.pdf

Next year you put $150 a month into your HSA account and again have no expenses.  Now you have $2,800 in the account.  Remember your deductible is $2700, so by year 2 you now have the money to reimburse yourself if you have a major medical problem.  Since we paid $6300 ($2700 plus the premium), you actually saved money over the cost of the PPO plan because you get to take the tax deduction of the $2,700 off your
taxes.    If your a small business owner, it’s also possible that you can deduct your medical expenses from your taxes as well.

If you’re NOT planning on funding your HSA and are only purchasing the HSA because it is less expensive BE CAREFUL.   The HSA works best when you put the money aside to reimburse yourself otherwise that deductible is going to hurt!

Remember to set up the HSA immediately (even if you don’t think you will fund it) after you enroll in the High Deductible plan because if you have eligible claims before you set up the account they are NOT eligible to
be reimbursed.  You may decide to fund the HSA with only $200.  As long as you have the HSA set up, you can still write a check to the HSA after a big medical
expense account and deduct it from your gross earnings.

If you’re a conscientious saver, and your HSA builds up, amounts in your HSA can also be used to pay health insurance premiums when you’re between jobs, qualified long-term care premiums, Medicare premiums and out-of-pocket expenses and living expenses after age 65 (pay ordinary income taxes).

Of course, I am giving you a bird’s eye view on this and you need to consider moving to an HSA carefully.  To educate yourself, you can go to www.hsacenter.com which offers a great deal of valuable information.   You can also contact me if you have questions or are interested in purchasing a Qualified High Deductible plan.

The HSACenter.com website is presented as general information by United Healthcare’s Golden Rule Insurance Company.

Individuals with high cholesterol have a significantly increased risk of developing coronary artery disease & plaque buildup, and of having heart attacks so efforts to identify more kids is clearly important.  52 million Americans have high cholesterol, a leading cause of heart disease.   Right now in the US, 1 out of 3 kids are considered overweight or obese which increases the risk of developing the condition.  By doing this test earlier, doctors will be able to help families make lifestyle changes that can save lives.  I am glad that the American Heart Association is advocating this test and pray that pediatricians will take the recommendations to heart.

Ask yourself, could my spouse keep the house without my income?  Can my spouse take care of the kids AND work if I were to die?   What will happen to my kid’s dreams of college, weddings, etc?  In a nut shell, WILL MY DEATH MAKE DAY TO DAY LIFE THAT MUCH HARDER FOR MY FAMILY????   If you answer yes, then talk to someone about what the cost of life and health insurance might be.  You don’t have to get the most expensive policy, just something that will provide a financial security net.   Right now, life insurance rates are very competitive and even coverage of $100,000 can help get your family through that all too difficult 1^st year without you.  A high deductible health plan can be the difference in keeping your family from foreclosure if you have a life altering medical accident or illness.

Going to the Internet may seem like a good idea but I’m biased and think that they just cherry pick.  Plus, what kind of service can you and your family expect if you have questions after the purchase?     By going to a licensed agent or broker you’ll be working
with a professional, be given a better understanding of the products available, and a more realistic expectation of what to expect during the underwriting process.    We brokers are dedicated to helping you protect the people you love from financial disaster!  Because in the end, that’s what insurance is… providing financial security to the people YOU LOVE.

Having watched family and friends deal with this horrible disease, I’ve done some research to understand what’s available to help families better protect themselves.  It’s time to recognize that cancer creates all kinds of issues for you, your spouse and your family.  Ask someone who’s been through it if they either had a plan like this or wish they did   Better my telling you this about this now then your discovering that this kind of policy exists after it’s too late.

Our firm offers two different product approaches.  The 1st is a plan that provides a flat $20,000 – $60,000 to you, your spouse, or your kids when DIAGNOISED with cancer.  This coverage  is totally separate from your health and life coverage and the cash is paid directly to YOU.  A 40 Yr old man can purchase a policy for $50,000 for $38 a month while a 50 year old women can obtain the same amount for $53.00 a month. Obviously, it make sense to purchase a plan like this when your younger as the premiums don’t increase as you age.

The 2nd plan option pays different amounts based on the kind of cancer you are diagnosed with and pays you as you utilize inpatient and outpatient medical services or prescriptions, etc.    With this 2nd plan, when you maintain the policy for 20 years the company will refund all your premiums less any claims.   Individuals 30 to 75 are eligible to purchase this plan.

These plans can be purchased individually or can be offered as a benefit through your employer.  Send me your comments or an email if you have more questions about these products or any other ?

• The exchange authority would operate as a nonprofit entity governed by a 12-member Board of Directors that includes a health insurer representative;
• A health insurance market would continue to exist outside the exchange;
• The exchange would operate as a mostly hands-off farmers market, not as an “active purchaser” selectively contracting with carriers);
• Eligibility would be limited to employers with no more than 50 employees, including employer groups-of-one. 

If you have purchased a High Deductible Health Plan (HDHP) the plan design has a deductible of anywhere from $3,000 to $10,000. With a High Deductible Health Plan you are required to pay 100% of the deductible expenses BEFORE any medical expenses are paid by the insurer. (Preventative care is generally covered at 100%). The rationale for selecting a HDHP is that the monthly premiums are generally lower than a PPO plan. (This may not be the case if you are over age 50 and have a low deductible with your HDHP.) It is important when you purchase a HDHP, you make sure that your plan is a qualified HDHP so that you can implement a Health Savings Account. With a HSA, you can put away a pre-determined amount of dollars away to “reimburse” yourself for qualified medical expenses. This fund is different that a Flexible Savings Account or FSA because you don’t lose any funds you don’t lose. The HSA funds that you set aside continue will grow with a low interest rate and can be rolled over to gradually pay your entire high deductible. Of course, it is important to put your funds into the HSA so that if you have a large expense you have the funds to reimburse yourself.

Due to the cost of health insurance a number of people are purchasing HDHP’s as a way to lower their monthly health premiums which in the short run is a good idea. However, I recommend that you do try to set aside the funds to cover at least some of the higher deductible should you require a significant amount of medical care.

The 2011 IRS Limits for amounts that can put into an HSA are $3,050 for an individual and $6,150 for a family. Individuals over age 55 can add an additional $1,000 each year. I do recommend that even if you can’t fund the total amount, that you set up the HSA if you purchase a HDHP. You have until the end of the year to fund the account for expenses incurred during the year. If cannot reimburse yourself for expenses incurred before you set up the account. Your bank or credit union offer HSA accounts that can be debited on a regularly basis and generally have low if no monthly fees.

A 40 year old man can purchase a HSA with a $5,000 deductible for around $100 a month and a $2,700 HSA would cost $162.00. When looking at this cost ask yourself if it makes sense to spend an additional $62 a month or $744 to lower your potential out of pocket costs by $2,300. Of course, you now have to deduct the $744 so your total savings for the lower deductible is really $1,556. You need to decide whether you can afford the extra premium or would rather pocket that savings for the additional exposure. In either case, the biggest point to consider is that in either case, you’re protected against catastrophic a medical expense which is really the point of purchasing health insurance coverage in the first place. If you have a family, you need to consider how you’re currently using medical care. Most folks with young children don’t like HSA’s because they want to be able to take the kids to the pedestrian when they need to go.

Important note: If you do not plan to fund an HSA, you might just want to purchase a High Deductible plan that is not tax qualified. Several carriers offer plans with $7,500 or $10,000 Deductibles. I generally recommend these plans to males without dependents as a way to cap catastrophic expenses. Men don’t go to the doctor on a regular basis so they don’t appreciate a PPO plan nor want to pay for them, so the benefit of a plan like this is that they would have catastrophic protection in the event of an accident or illness that caps their out of pocket cost costs. Since medical expenses are the #1 reason for bankruptcy in the US, this might be the best solution for someone that doesn’t think they will EVER get sick or someone that just wants to make sure their financial situation is not jeopardized by a large medical claim.

To learn more about HDHP’s and HSA’s go to the IRS’s website and enter these terms into the search section.

For more information about the Greater Raleigh Nawbo Chapter contact me.