My Blog - News You Can Use
North Carolina Houe passes substitute legislation to establish health insurance risk exchange.
The House has passed a substitute version of legislation that would establish a health insurance exchange. Committee substitute #2 for H.B. 115 includes the following key provisions:
- 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.
LSM Insurance Associates named as Leader of the Pack!
In the March 2011 Agent Newsletter from Inclusive Health, NC High Risk Pool, Leslie S McMillan of Rolesville has been named as one of the top producers for Inclusive Health for January & February 2011. “We were also one of the top producers in 2010, and continue to be delighted to provide health insurance to residents of North Carolina that are declined by other medical insurers. There are significant numbers of individuals loosing their medical coverage because their COBRA is ending or because they have lost their job. When they apply for individual coverage they are often surprised and concerned that they have been declined or rated up. ”Inclusive Health offers them excellent options that would not be available if these high risk pools were not in place. ”
Is a High Deductible Health plan right for you?
What’s a deductible and how should you decide which deductible you should purchase. In a health insurance plan, a deductible is the amount that the subscriber must pay BEFORE the insurance carrier pays anything for certain expenses. With a PPO, which is a Preferred Provider plan, the deductible generally must be paid for expenses like In and Out Patient hospitalization and services like MRI’s, CAT and PET Scans. You are likely to have a PPO plan now if your plan offers co-pays when you go to the Dr. office.
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.
NAWBO/WBO Event on YouTube – Great Event – Join NAWBO!
Greater Raleigh-NAWBO Chapter & Women’s Business Center Event March 16th was a huge success. Thanks for all the vendors, members & guests that attended.
For more information about the Greater Raleigh Nawbo Chapter contact me.
LSM Insurance Associates will be at the Women’s Emplowerment Expo today!
On my way to the Women’s Empowerment Expo at the RBC Center, Raleigh. The event is from 11 am to 8 pm. I will be at the NC High Risk Pool’s Inclusive Health Care Booth. I’m looking forward to talking to folks that don’t know if they’re eligible for health insurance through either the state or federal high risk pool programs. You’d be amazed at how many people still don’t know these plans exist. Stop by the Inclusive Health booth if you attend for a quick hug!
