Insured Thoughts

In today’s economy everyone is looking for ways to cut expenses in an effort to balance their budget. Many are turning to their auto insurance policies, contacting their agents, and trying to find ways to lower their premiums. Unfortunately, some are canceling their policies altogether, or just maintaining the minimum insurance required by law. This can turn out to be a large gamble should an accident occur. There are other ways to possibly lower your premium, while still maintaining most of the coverage you have today.

Automobile insurance is required in almost every state so that anyone driving without insurance is breaking the law. Some of the ways you can lower your premium are as follows:

1. Be a safe drive. Safe drivers are eligible for the lowest rates available because you have a much lower risk of being involved in an auto accident.

2. Comparison shop for lower premiums for the same coverage you currently have on your existing policy. This can be done online, through an 800# for a particular company, or in person with an agent or broker.

3. Always inquire as to what discounts might be available. Some discounts are associated with membership in specific organizations. Others can be obtained for insuring multiple cars on one policy, or for safety and anti-theft features such as airbags, alarms, etc. Completion of a defensive driving course will always make you eligible for a reduction in premium, while many companies reward good students with a discount. Ask your insurance agent to review all available discounts with you and be sure all are applied to your premium.

4. Increasing deductibles on your collision and comprehensive portions of your policy will reduce your premium. Remember, however, that should an accident occur, you would be obliged to pay this new, larger amount. If you can afford the additional expense, this is a good opportunity to save money.

5. Verify that the mileage rating you are charged is accurate. If possible, reduce mileage to a lower classification and you can save even more.

6. Before purchasing a new automobile, check how much it will cost to insure. Some models of cars are rated much higher than others, so you want to be certain that you are purchasing one that will help lower your premiums.

The government stimulus package has been a great help in assisting many of the unemployed. A large majority of those who lost their jobs are now eligible for government assistance to pay 65% of their health insurance premiums, for up to nine months. This benefit is linked to COBRA (Consolidated Omnibus Budget Reduction Act of 1985), which allows people who have lost their jobs to continue health insurance coverage under their former employer’s plan, for up to 18 months but they must pay the full premium. Although COBRA was a well-intentioned bill, it did not address the issue that a person who has lost his job is most likely unable to afford COBRA, which can often cost as much as $1,200 per month for a family. In these current difficult economic times, our government has attempted to address this concern.

Federal stimulus funds are providing this premium benefit to all workers who were terminated from September 1, 2008 thru December 31, 2009. The employee may continue with the plan he has been carrying, or change to a less expensive plan, thereby lowering his portion of the premium. These subsidies may be reduced based on the employee’s income.

There is, however, one major problem, which is leaving many people without health insurance. The law stipulates that the company must be continuing to purchase health insurance for its’ remaining employees.The problem arises when the company has filed for bankruptcy and closed their doors completely. People who are being let go by organizations that are going out of business for good, are not able to receive any benefits from this new temporary ruling. They cannot continue their health insurance through COBRA, and they are not eligible for any of the stimulus funds provided to other unemployed workers. These people are in desperate need of assistance, yet are unable to receive it under these current guidelines. Others are eligible to receive the assistance temporarily but, if their former employer is currently closing their facilities, this benefit will disappear for them, too, as soon as they cancel their health insurance policy.

The cost of health care has risen so rapidly over the last few years that many people cannot afford to purchase coverage and, even those who have health insurance policies, can still not afford even their portion of the expense.

I remember many years ago when a friend told me about her cousin who was going to New Zealand to have a great deal of dental work done. This cousin had a good friend in New Zealand so she was able to stay at her friend’s home for a long visit while make regular dental appointments and having all of her dental needs met. This sounded very strange to me at the time, but it was all done in the interest of saving a great deal of money. I did not realize at that time just how much money could be saved by having medical and dental work performed outside the U.S. Today I have a much better understanding of how great the savings must have been to justify this decision.

I recently read about a man who was told by his doctor that he needed triple bypass surgery and that the cost would be $80,000. This father of a large family has lived his life always looking for the less expensive route. With many children to care for, his frugality is very understandable and necessary for survival. He searched the Internet and found a hospital that was willing to perform his surgery for $13,200. This was through a special arrangement with an online health service that contracts with certain hospitals to provide specific surgeries at much lower costs than traditional hospitals. This company also offers medical care abroad, but the surgery referenced above was being performed in the Midwest area of the United States. The majority of patients using these services do not have health insurance and must pay in advance for their procedures. Not only was this patient very happy about the money he saved, but also he was completely satisfied with the quality of care he received.

Next year people on these so-called Advantage Plans will be forced to abide by new government rules intended to require stricter marketing standards and specific caps for out-of-pocket costs. These plans will also be required to explain in clear terms what they will cover and what will be excluded (most especially in the doughnut hole). The main purpose of these changes is to make choices easier for consumers by enabling them to compare options and costs in a friendlier environment.

Medicare and Medicaid Services recently listed requirements for insurers bidding to offer Advantage plans next year. Subsidies to such plans were cut by up to 5%.

Out of pocket costs are to be capped at $3,400 or less, or the government will investigate the reasons for exceeding this amount.

One of the drawbacks to these changes is that some of the plans will no longer exist next year. Medicare will assist those without plans to find similar plans that they can enroll in for the next year. Consumer advocates are welcoming these changes and believe that they will be beneficial to the insureds.

Insurance plans support the plans to increase consumer protection and improve comprehension, but they feel that the payment cuts are too steep and may cause some to drop from the plans completely. This would result in fewer choices for the insureds.

Millions of people take prescription medicine on a daily basis for a variety of ailments. Some take numerous pills each day in the hope of improving their health and extending their life. Many obtain these prescriptions through their health care plan and are often only required to make a co-payment to receive the drugs prescribed by their doctors. Of course, if you are taking numerous drugs, even the co-payments can add up to be a substantial amount of money.

Physicians are often influenced by drug company representatives to prescribe certain specific drugs for their patients. Pharmaceutical companies often provide many perks to doctors in exchange for their recommendations to patients. They are generally supplied with sample drugs to start the patient who then, of course, begins to purchase them directly. Many of these drugs are extremely expensive and health insurance companies often must absorb these costs that eventually result in higher premiums to the consumer.

It is a good idea for every consumer to question their physician about the availability of generic drugs for their specific condition. Many times generics can be easily substituted for the much more expensive “name” brands recommended. Brand new drugs often do not offer a generic substitute until they’ve been on the market for several years. Frequently, however, there is another drug that could be just as effective in dealing with a specific problem.

Consumers would do well to shop around for their drug purchases. Many do not care how much their medicines cost, as long as they are not paying the bill. This, of course, is the wrong attitude, and eventually they will be paying the bill in one form or another.

A friend of mine recently had a surprising experience regarding drug purchases. My friend had a high-deductible policy for many years and was required to purchase his own medications. When a group policy with much lower premiums became available, he changed his coverage as soon as possible. The new policy had a $10 co-payment, which sounded great to him. He contacted the new insurer to ask about coverage for his specific medications. He was told that each required a $10 co-pay for every 30-day supply purchased. There were two Because he had previously paid for these medications on his own, and had shopped diligently for the best possible price, my friend knew that this was costing him much more money. The medications generally cost $30 for a 6-month supply. He was now, under his new insurance policy, expected to pay $120 for the same prescriptions. A person, who had always received their medication through their insurance company, might never be aware of the possible savings that they are not receiving. Doctors almost always write prescriptions for one-month periods. You often have to specifically request that they write them differently. It definitely pays to survey local pharmacists regarding quantity discounts, etc., to be sure that you are getting the best deal available to you.

Unemployment is at an all time high and expected to continue rising. Companies are desperately seeking alternatives to layoffs but few are available. Some are arranging furloughs for their employees so that everyone shares the pain. This is actually a good alternative if it can be done successfully.

When a person does lose their job, there are certain steps that should be taken right away to keep them on track. Of course, the first reaction to the job loss is shock. After that comes sadness that it should have happened to you, then anger at fate and the bosses who made the decisions. All of these emotions are normal and should be worked through individually. Meanwhile, it is time to take action and react to the changes that have just taken place in your world.

The first thing that a person should do is file for unemployment compensation. If you have been laid off, you automatically qualify for benefits but you must complete the application. Many offer online and telephone applications. The amount of your benefit is determined by the state you live in and the amount of your previous salary. At best, it only replaces about 35% of your lost wages, but it does help. In some states, you are still eligible for unemployment even if you have received severance pay. It takes approximately three weeks before checks will begin to arrive, so filing immediately means you will receive funds earlier than if you wait.

If you are able to find a job, consider taking it even if it is not necessarily what you want to do. It will help you survive theses tough economic times and frequently there is an advantage to already being an employee of a company, as many promote from within.

Consider getting retrained to work in an area where there is greater demand for employees. Local community colleges offer many programs if you can afford them or qualify for assistance. Goodwill Industries offers training services at no cost for people who have been unemployed long-term, are disabled or lack education. If you are over 55, AARP has numerous programs they are offering if you meet certain income requirements. They will evaluate your interest and skills and provide free training in areas of interest.

Rather than allow your resume’ to show time gaps of unemployment, volunteer and use that information to show your activities during the gap periods of time. If you can find something that relates to your former or future fields, that would be best, but anything will look better than nothing. Also consider classes that relate to your profession and list them in the education section.

In an attempt to assist the unemployed with health insurance, the federal government introduced the Consolidated Omnibus Budget Reduction Act of 1985, also known as COBRA. With all of the best intentions, this bill was passed to insure that the unemployed could maintain continuous health insurance coverage. What it did not take into consideration was that the majority of people who are losing their jobs cannot afford COBRA.

The average cost of a COBRA policy for a family today is $1,069 per month. For an individual, the premium would be between $334 and $444 per month. These costs are astronomical for someone who has just filed for unemployment insurance and is trying to imagine how they will survive. If, however, you have a pre-existing condition, the best thing you can do is to continue your COBRA anyway possible. If you and your family are very healthy, you may well be able to shop around for a more cost-effective policy. You are allowed a 60-day period of time to decide to accept or reject COBRA. Be sure to use this time wisely by investigating other policies that may be available to you. If one member of the family is ill and the others are healthy, consider keeping the sick person on COBRA and finding new policies for the healthy family members at a much lower rate.

Low income families may be eligible for Medicaid or, in Virginia, FAMIS (Virignia’s Family Access to Medical Insurance Security plan for children. It might well pay to shop around and visit insurance provider websites but, before making a final decision, sit down with an insurance professional to be certain that you are buying the policy that is right for you and your family. An agent can explain the whole plan to you in detail so you can understand exactly what you are purchasing for your money and what type of coverage you can expect.

There was a time when employers automatically furnished their employees with a comprehensive health insurance plan at little or no cost to the employees. Things have changed drastically in the past decade and there are many fewer options available to people today. Some employers still offer health insurance plans but supplement only a portion of the cost, if at all. Some have changed the plans offered to high deductible plans in order to keep the costs down. These plans are more affordable as long as you don’t become extremely ill or hospitalized. If you do, they can be very expensive.

If you do have a high deductible health insurance plan, you should be eligible to open a Health Savings Account (HSA) to accompany it. HSA’s allow the insured to deposit money before taxes to be used to help pay the deductibles and non-covered expenses. Unlike Flexible Spending Accounts, money deposited in these accounts does not have to be spent within a specific period of time. Funds may be used to pay for medications, doctor and hospital deductibles, uncovered doctor visits, dental expenses, eyeglasses and eye exams, etc. There are checks and debit cards associated with the account so you have a variety of ways to pay bills. These funds may stay in the account until such time as needed.

Recently a friend had unanticipated surgery which resulted in numerous different billings for the 20% costs not covered by the current policy. Since these bills came in the mail and offered credit card options, he chose to provide his account number so that the amount due could be debited from the account. This all worked well until one payment was discovered missing. There was no explanation for this missing payment, but it did bring to light the problem of paying with a debit card. A debit card payment cannot be put on “hold”. You cannot issue a “stop payment” order on a debit card as you can with a check. If duplicate payments are put through the account, the insured will have to settle it with the billing department and arrange to have a payment returned. Although this may work well with some businesses, there are others who would not promptly return the duplicate payment. After hearing this story, I have determined to pay with my debit card in person but use only checks when mailing in payments.

If you are one of the many people who have high-deductible health insurance plans, be sure to investigate the availability of combining it with a health savings account. This could be very beneficial to you and your family but do beware of paying with a debit card when mailing in a payment.