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Health Insurance 101 with Industry Insider and Watchdog, C. Steven Tucker. This show focuses on Consumer-Driven Health Insurance products for Small Business owners, the self-employed, individuals who are paying high monthly premiums for employer sponsored group Health Insurance coverage or COBRA continuation coverage or for anyone interested in learning how to shop for the best Health Insurance at the lowest price. This show will be of special interest for those individuals who have recently lost their jobs and are confused about their COBRA benefits or for those who are looking for more affordable COBRA alternatives. Topics will range from COBRA subsidies, State Insurance Risk Pools, Health Savings Accounts, Guaranteed Issue Defined Benefit Health Insurance plans and many other interesting topics. Listeners will also learn how they can build retirement income using a "Medical IRA" attached to a Consumer Driven Health Insurance plan, what options they have if they have been declined Health Insurance coverage and are labeled as "uninsurable" and how they can obtain legitimate Health Insurance coverage for pre-existing medical conditions even after they have been declined.
Original Air Date: 5/5/2009 10:00 PM UTC
Date / Time: 5/3/2009 10:06 PM UTC
In today's fast paced world, business owners don't often have the time to thoroughly check out the companies they rely on to provide goods and services. In many cases, a determination of product/service quality can be made at the time goods are delivered or services are rendered.
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If goods or services do not meet expectations, there is often an immediate remedy available. For example, poor quality goods can be shipped back to the supplier and/or payment for services can be withheld until services are satisfactorily rendered.
Unfortunately, business owners do not always purchase items that are tangible items, in the sense that they can immediately determine the quality of the goods and/or services at the time of purchase. One example of such a purchase is health insurance. Since health insurance is not usually used immediately after purchase, the quality of care or the legitimacy of the policy may not even come into play until the business owner, or a family member, actually needs to have medical treatment.
This is one of the primary reasons that many companies, often appearing legitimate, can get away with selling bogus health insurance coverage to unsuspecting business owners.
In most cases, fraudulent health insurance policies are sold to business owners by telemarketers or "agents" through bogus Associations and Unions. In that, the buyer must join a professional and/or trade association or become a union member to qualify for health insurance.
In fact, in a study published by the U.S. General Accountability Office (GAO) in 2004, the GAO found that association schemes ranked at the top of the marketing methods followed by bogus health insurers. According to the report, "Employers and Individuals Are Vulnerable to Unauthorized or Bogus Entities Selling Coverage, between 2000 and 2002, the U.S. Department of Labor and state insurance regulators identified 144 unauthorized entities selling health insurance unlawfully.
These entities defrauded 15,000 employers and more than 200,000 policyholders out of $252 million."
However, it is important to mention that many individual and group health insurance products are endorsed by reputable Associations, such as the ARRP and the American Bar Association and, many reputable Unions, such as the AFLCIO and the Teamsters.
These organizations have long been recognized for bringing a common class of professionals or citizens together for other purposes that have very little to do with health insurance.
Membership commonly includes a wide range of other benefits in addition to discounted health insurance. Typically, the organizations have a governing organization, a constitution and bylaws, a set of officers, voting rights, regular membership meetings and a professional code of conduct.
Unfortunately, most individuals do not find out that they were making hefty monthly payments or premiums to fraudulent Associations or Unions until they have a severe condition that requires medical treatment. Usually, it isn't until after they receive treatment that they receive notice from their medical provider that the claim that was submitted to the insurance company was denied and that all the medical charges that were incurred are now their responsibility.
Often, the scheme starts when business owners are contacted by telephone or approached by someone who claims to represent a certain, official sounding, Association or Union. The business owner is then informed that if s/he becomes a member of the Association or joins the Union, s/he could qualify for a low cost group or individual health insurance plan. Typically the Association or Union is promoted to represent self-employed individuals and small business owners.
The low cost health insurance is usually presented as one of the many "perks" that the business owner can qualify for, in addition to many other "member" benefits, like discounts on other services, such as dental, eyeglasses, office supplies, hotels, rental cars, etc.
In many instances, these bogus companies involve licensed health insurance agents to sell their fraudulent health insurance products. Sometimes the "agents" know the products are fraudulent, other times, the "agent" also falls prey to the scheme.
Often, the schemes prey upon consumers who have been previously declined insurance coverage or suffer from a pre-existing condition. Since these consumers have very limited options to purchase private health insurance coverage, the benefits of an Association or Union membership that offers health insurance coverage for a "membership fee" or "union due" is enticing.
To the unsuspecting consumer that has a pre-existing medical condition or is paying high premiums for coverage, the "membership fee" or "union due" is a small price to pay for what they believe will be a quality health plan that provides "guaranteed" coverage with no "pre-existing condition exclusions" and no "waiting periods."
In many circumstances, the print materials that are left with the consumer are very well designed, however, the majority of the time, the language in the "health plan brochure," if there is one, is very unclear. The literature may name the entity that is authorized to act as the health plan administrator of the plan, but neglect to name the actual insurance company that is providing the health insurance coverage.
Unfortunately, it is often difficult for the consumer to separate the illegitimate companies selling official sounding health plans from the legitimate ones. Typically fraudulent health plans have many commonalities.
Here are 10 "Red Flags" that may indicate health insurance fraud:
So how can you protect yourself from falling victim to a fraudulent insurance scam? Make sure you contact your state's department of Insurance to determine if the health insurance company and the third-party administrator are licensed to do business in your state and make sure that the "agent" selling the plan is a "licensed health insurance agent." Additionally, make sure that health insurance company has been approved to sell the particular policy that is being offered. Since it may be difficult to tell if fraud is involved, always put off buying your health insurance policy until you have had the opportunity to perform your own due diligence.
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.
Date / Time: 5/3/2009 9:25 PM UTC
United Health Care now offers the "Continuity" plan. The "Continuity" plan is a concept enacted by the CEO of United Health Care & its subsidiary Golden Rule Insurance company. The concept is a brilliant one indeed because one of the greatest challenges to all health insurance brokers is the struggle to maintain "Guaranteed Insurability" for clients who have been diagnosed with a host of conditions such as Diabetes or Cancer. The onset of either one of these illnesses (and many more) will render one "uninsurable" on the individual major medical market. This can become a very serious problem if one looses their employer sponsored group coverage and can not either afford their State's risk pool coverage, or they do not live in a State that provides a State Insurance Risk Pool. * The "Continuity" plan resolves this problem by allowing insurable consumers to purchase any plan that United Health Care/Golden rule offers at only 20% of the normal required premium for that plan. Consumers can purchase this plan whilst they are covered by an employer sponsored group health insurance plan that offers them Guaranteed Insurability. Whilst the consumer is still insured by their employer sponsored group plan the United Health Care policy of their choice goes in to a "dormant" state. In other words, the policy remains in force as long as the insured pays only 20% of the required monthly premium for that product. * The moment that the consumer looses employer sponsored group coverage, or is faced with a hefty Cobra continuation premium. They can then elect to "awaken" the policy out of its "dormant" state and the policy will then begin to cover them on a Guaranteed Insurability basis without the need for underwriting. This means that if a consumer were to develop a major medical condition that would render them uninsurable on the individual major medical market whilst the "Continuity" plan was in its "dormant" state, their pre existing conditions would continue to be covered seamlessly from day one once the consumer elects to "awaken" their "Continuity" coverage. Once the policy is "awakened" the insured would now have to pay the entire monthly premium required to maintain that individual health insurance policy. But as anyone in the industry knows, individual policies often require a fraction of the premium that is required to maintain a Cobra continuation plan. * Once the insured has retained another employer sponsored group plan that provides Gauranteed Insurability (presumably by securing another employment position) then the policy goes back in to its "dormant" state and the premium is subsequently reduced to only 20% or the required monthly premium. Essentially this concept allows any consumer to "float" in and out of employer sponsored group coverage whilst also maintaining the all important "Guaranteed Insurability" clause so valuable to those who have been rendered "uninsurable" on the individual major medical market. For more about this brilliant concept click here.
To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.
Note: This policy may not be available in some states.
Date / Time: 5/3/2009 9:06 PM UTC
I have been a multi-state licensed health and life insurance broker for over a decade and one of the biggest challenges I have had to deal with throughout the years, has been trying to help individuals that have been labeled as "uninsurable."
On the Individual Health Insurance market, insurance companies get to "pick and choose" who they offer individual health insurance coverage. This means that insurance companies tend to offer coverage to healthy individuals versus individuals with serious pre-existing medical conditions. In fact, since insurance companies are not obligated to offer anyone coverage on an individual health plan, quite often, individuals with serious pre-existing medical conditions are often "declined coverage" altogether.
Once an individual is declined health insurance coverage, that "decline" ends up on their Medical Information Bureau Report (MIB), which other insurance companies have access to. This makes them very likely to be declined again in the future when they apply for health insurance coverage with a different carrier.
Quite often, individuals that have been declined coverage find themselves labeled as "uninsurable." This uninsurable status usually lasts for many years, and in some cases, may last for the rest of the individual's life.
Here is a list of just a few of the pre-existing medical conditions that likely render an applicant uninsurable for ten years or more are:
Heart Attack
What exactly is covered by a Defined Benefit Health Insurance policy?
American Medical & Life Insurance Company has four different Defined Benefit Health Insurance Policies to choose from.
Below are a list of benefits on the best of the four different plan options. Remember, All benefits are provided on a "first dollar" basis, which means that you don't have to pay your deductible first to receive these benefits.
---$1,000 per day covered for the first 100 days of hospital admission
Without a Major Medical or Defined Benefit health insurance policy, an individual can experience catastrophic medical bills with these types of "health plans." If the average P.P.O. discount on medical procedures performed within a P.P.O. network is between 25% & 40%, a 40% discount on a $100 doctor office visit is a good deal because the visit will only cost the discount card holder $60. However, if the medical bill is $100,000 and the discount card holder has to pay 60% of the bill, the $89 a month "discount health plan" is anything but a good deal. (60% of 100K = $60,000....Yikes!)
For more information on the Guarantee Issue Defined Benefit Health Insurance Plan, other Major Medical Plans and tips on how you can tell if a discount plan is actually "health insurance," please visit our web site @ www.smallbusinessinsuranceservices.com * If you have been classified as "uninsurable" and you want to check out rates and apply online for the aforementioned Defined Benefit Health Insurance plan offered through the Association for Independent Managers (AIM) click this link: aimhealthplans.com * Plans are underwritten by American Medical and Life insurance Company of New York, New York and are available in all 50 states.
Date / Time: 5/3/2009 9:04 PM UTC
Date / Time: 4/30/2009 11:09 PM UTC
If you are not familiar with the new "American Recovery and Reinvestment Act Of 2009" then you need to learn more at the U.S. Department of Labor web site. In a nutshell, this new Federal Act entitles you to a 65% reduction in your monthly COBRA continuation premium if you lost your job after September 1st, 2008. Granted it only lasts for 9 months, but it is most certainly going to help millions of American's who have lost their employer sponsored group health insurance coverage.
However, there are "strings attached," for those who earn more than $125,000 or $250,000 for married couples filing a joint federal income tax return, in that, if your income meets or exceeds these amounts, you may have to repay all or part of the premium reduction. Therefore, if you are in a higher income bracket, you may wish to consider waiving your right to the premium reduction as it may increase your income tax liability for the year. For more information on how higher income earners are affected by this Act, please refer to the March 25, 2009 Issue of Forbes Magazine.
But, what if you decide to elect COBRA? The question then becomes, "What do you do after the 9 month COBRA subsidy expires or when your COBRA runs out altogether?" Luckily, there are several lower cost alternatives to paying high priced COBRA continuation premiums. And, depending on what state you live in, there may be other health insurance options that you can select when your 9 month subsidy expires or when COBRA finally runs out at the end of 18 months. They are as follows:
State Continuation of Coverage
Individual Health Insurance Policy
Small Group Health Insurance Plan
State Risk Pool Coverage
Defined Benefit Health Insurance Plan
Let's take a look at these alternative plans:
1. The first option is "State Continuation of Coverage." Many States offer State Continuation of Coverage. While State Continuation of Coverage does not follow Cobra continuation laws, it does allow you to continue your employer sponsored group coverage for up to 9 months even if your former employer employed less than 20 employees. This law does not apply to self-funded plans, so make sure to check with your State's Department of Insurance to see if your State mandates State Continuation of Coverage.
2. The second option, an "Individual Health Insurance Policy" is typically the best and most affordable alternative for relatively healthy individuals. An individual health plan can be purchased at any time and is a great way to maintain many of the same kinds of benefits that you had through your former employer's sponsored group health plan.
However, an Individual Health Insurance policy has to be "underwritten" before it is issued. During the "underwriting" process, the insurance company scrutinizes the applicant's health history to determine if it will extend an offer for insurance coverage. This process allows the insurance company to "decline" coverage to applicants with serious pre-existing or chronic medical conditions or to modify the coverage it extends to the applicant.
Today, the "Individual" health insurance market has become quite competitive; therefore, many insurance carriers are willing to offer health insurance coverage to individuals with certain controlled pre-existing medical conditions, like high blood pressure or high cholesterol.
Other times, the insurance company will offer the applicant coverage, but will refuse to cover a specific body part or pre-existing condition. In these cases, the insurance company issues what is known as an "exclusion rider." An exclusion rider is a way for the insurance company to exclude coverage for a specific body part or a specific medical condition (e.g. right knee, uterine fibroids). Exclusion riders can be permanent (body part or condition excluded coverage for the life of policy) or temporary, (body part or condition excluded coverage for a specific period of time.)
Often, if an exclusion rider is placed on a body part and the insured receives no further treatment on that body part or if the rider is in place to exclude a pre-existing medical condition and the insured's condition completely resolves, the policyholder can request that the insurance company remove the exclusion rider from the policy. Typically, requests to remove a rider can be made after one or two years. Ultimately, the insurance company will makes the final decision on whether the exclusion rider will be removed.
An HSA qualified HDHP (Health Savings Account qualified High Deductible Health Plan) may offer a more affordable consumer-driven healthcare option to individuals that are searching for a health plan with very low monthly premiums. Typically, these plans offer policyholders greater flexibility and control in where their health care dollars are spent. Plans often come with a fixed aggregate family deductible, which mean that a separate deductible does not have to be met for each family member on the plan.
In addition to the significant cost savings, policyholders can fund their Health Savings Account (HSA) to pay for routine medical expenses or alternative medical therapies, like acupuncture. Any money in the HSA that is not used for medical expenses can be rolled over to the next year and excess funds can be transferred to a tax deductible, tax deferred, interest bearing account, commonly referred to as a "Medical IRA." These types of health plans can offer tremendous tax advantages to policyholders. Not only can policyholders save money on their health insurance premiums, but they also can use this savings to build a nest egg for retirement. Many HSA administrators now offer thousands of no load mutual funds to transfer your HSA funds into so you can potentially earn an even higher rate of interest.
For more information on HSA qualified HDHPs, click here.
3. The third option is a "Small Group Health Insurance Plan." This type of plan can be purchased immediately and might just be what the doctor ordered for those individuals that that have been "declined" coverage for an "Individual" health plan. It might also be another option for individuals who are looking for coverage without an "exclusion rider" on a pre-existing medical condition because group health insurance provides "guaranteed insurability," which means that all applicants and their families will receive health insurance coverage for all pre-existing medical conditions.
Because recent layoffs and a tough job market have created opportunities for many professionals thinking about starting their own business, here are a few things to keep in mind when considering group health insurance coverage. Typically, a company must have a minimum of two employees. Insurance companies typically allow husband and wife to enroll separately so the two-employee minimum can be met. The company must have a Federal Tax ID number, which means that sole proprietors, will have to incorporate, unless they have an existing business with a Federal Tax ID. To qualify for a small group plan, at least two of the employees on the plan must work a minimum of 30 hours per week and must receive a wage for the 30 hours worked.
On a Small Group Health Insurance plan, a large portion of the monthly premiums are determined by the health status of those individuals participating in the plan. Even if only one individual has a serious medical condition, that individual's condition is likely to adversely affect everyone's health insurance premiums. This means that even healthy group participants will pay a higher monthly premium. It may also mean that premiums can increase dramatically (up to 300% higher or more depending on your State) if someone covered on the group plan develops a serious condition or if an individual with a serious medical condition is hired at a later date.
This is important to keep in mind if your business is likely to grow, as your insurance contract may require you to offer new employees health insurance benefits and also require the corporation to pay a portion of your employees health insurance premiums.
The main advantage of a Small Group Health Insurance Plan is that it provides seamless continuation of coverage for those individuals who have pre-existing conditions such as Diabetes or Cancer providing that they have a minimum of 18 months of prior continuous health insurance coverage with no lapse in coverage of more than 63 days.
4. The forth option is a "State Insurance Risk Pool." This option is primarily for individuals who have serious medical conditions and who have been "declined" individual health insurance coverage. Many states, but not all, provide individuals with pre-existing conditions the opportunity to obtain seamless continuation of health insurance coverage after their COBRA continuation expires, or if they lost their employer sponsored group coverage due to a policy cancellation and they were unable to obtain an individual health insurance policy on the open market because of their pre-existing conditions.
State Insurance Risk Pools often offer immediate coverage to individuals that would normally render someone "uninsurable" on the individual health insurance market. To qualify for a State Insurance Risk Pool, applicants have to show "proof of credible coverage" for a minimum of 18 months prior to application, with no lapse in coverage of more than 63 days. Although Risk Pool coverage is also available to those who have been "declined" coverage on an Individual Health Insurance policy, there is usually a 6 or 12 months waiting period before preexisting conditions will be covered if the applicant fails to show "proof of credible coverage." To find if your state has a State High Risk Insurance Pool, click here.
5. A fifth alternative, recently advertised on the Fox News Channel is now available. It is a known as a "Defined Benefit Health Insurance Plan." These affordable policies can be purchased at any time and are issued on an individual basis regardless of health history, which means they can be a unique option for individuals that have been "declined" individual health insurance coverage.
However, these policies should be considered last, because coverage is limited and they are not designed to act as a comprehensive major medical plan. Although these policies offer limited benefits, they do offer an unlimited surgical benefit, therefore, they can be a financial lifesaver for anyone who is in need of surgical treatment for a pre-existing condition and might be exploring lower cost surgical options oversees. In addition, these plans also offer up to $1,000 a day for hospital coverage lasting up to 100 days. Outpatient doctor office visits & Labs.
Fortunately, these plans are HIPPA qualified, which means that all pre-existing conditions will be covered from day one, providing that the insured has "proof of credible coverage." Again, "credible coverage" is defined as health insurance coverage that has been in place for a minimum of 18 months prior to application, with no lapse in coverage for more than 63 days. To learn more about "Defined Benefit" health insurance plans, click here.
In all cases, Individuals should keep in mind when deciding whether to continue their health insurance coverage under COBRA that they will continue to pay for a health plan that was designed and purchased by someone else; specifically, their former employer. In addition, great portions of the COBRA premiums they pay are dependant, and will continue to be dependant, on the health status of their former employer's group.
Since the majority of employer sponsored group health plans have a low deductible, monthly COBRA premiums will be significantly higher. Therefore, it is prudent for anyone considering COBRA continuation coverage to explore all of their health insurance options, especially an "Individual" Health Insurance Policy.
This is especially true if one is healthy and rarely goes to the doctor and continues a their employer sponsored group health plan that offers a $20 Copay for doctors visits and a $15 Copay for prescription medications. If these are benefits that the individual is not likely to use, they might want to think twice before selecting COBRA continuation coverage.
In fact, healthy individuals can usually reduce their COBRA premiums as much as 50% or more by purchasing an Individual Health Insurance policy with a higher deductible. Furthermore, families can experience dramatic savings and have more control over their health care expenses by purchasing an HSA qualified HDHP.
Regardless of the decision, it is important for consumers to explore all of their healthcare options prior to making a purchasing decision. Taking the time to perform your own due diligence before making a health insurance selection may not only save you money, but it may save your life.
Original Air Date: 4/30/2009 10:00 PM UTC
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C. Steven Tucker is a multi-state licensed health insurance broker, insurance industry insider, watchdog and health insurance consumer advocate. He is President of Small Business Insurance Services, Inc. a brokerage company that has been helping small business owners and the self-employed find affordable, quality individual and small group health insurance coverage for 15 years.
Contact Info: C. Steven can be reached toll-free at 866-724-7123 or on his cell at 630-674-1551, via email at steve@sbisvcs.com or through his web site at www.smallbusinessinsuranceservices.com