Tag Archives | health insurance brokers

SHORT TERM MEDICAL COVERAGE – A BRIDGE UNTIL OPEN ENROLLMENT

Has your individual health insurance policy recently been cancelled?

Are you between jobs, and need coverage for a few weeks or months?

Are you a college student in need of coverage until classes begin?

THE ANSWER TO ALL THESE QUESTIONS IS SHORT TERM MEDICAL COVERAGE.

  • Short term medical is a limited form of health insurance designed to bridge you to permanent individual or employer based group coverage.
  • Short term medical insurance is designed to protect your assets by paying for catastrophic hospital medical costs.
  • The coverage will only pay for your inpatient hospital, ER, or Urgent Care medical services.
  • Some policies may include some form of office visit co-payments before or after the deductible.
  • Drug coverage is usually limited to inpatient hospital; however, some carriers may include a drug discount card.
  • Pre-existing conditions diagnosed during 12 months prior to enrollment are normally excluded. In addition, carriers may also decline enrollment if a major illness has occurred within the last 5 years.
  • The coverage is sold on a month to month basis, up to a maximum of 6 months. Some carriers may allow the policy to roll over for additional days or months.
  • You may tailor the coverage to the actual number of days needed until the effective date of permanent insurance.
  • You may select policy maximums that range from $750,000 to $2,000,000 per person.
  • You may select a deductible from $500 to $7500; co-insurance (the amount you pay after deductible) of 20% or 50% making your total out of pocket costs (your maximum financial risk) $1,500 to $10,000, including deductible.
  • You have a choice of having an effective date the day after enrollment or up to 30 days in the future.
  • You may pay on a monthly basis or the total premium up front for the actual number of days of the policy.
  • The premiums may only be paid by credit card.
  • You may enroll directly online, and after approval the carrier will automatically download your ID card(s) and Certificate of Coverage.

If you have questions, contact me directly at (626) 797-4618 or email me at john@healthinsbrokers.com

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Health premiums could rise 17 pct for young adults

CARLA K. JOHNSON (AP)

CHICAGO — Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans — a shift expected to raise insurance premiums for young people when the plan takes full effect.

Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press. The analysis did not factor in tax credits to help offset the increase.

The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.

Consider 24-year-old Nils Higdon. The self-employed percussionist and part-time teacher in Chicago pays $140 each month for health insurance. But he’s healthy and so far hasn’t needed it.

The law relies on Higdon and other young adults to shoulder more of the financial load in new health insurance risk pools. So under the new system, Higdon could expect to pay $300 to $500 a year more. Depending on his income, he might also qualify for tax credits.

At issue is the insurance industry’s practice of charging more for older customers, who are the costliest to insure. The new law restricts how much insurers can raise premium costs based on age alone.

Insurers typically charge six or seven times as much to older customers as to younger ones in states with no restrictions. The new law limits the ratio to 3-to-1, meaning a 50-year-old could be charged only three times as much as a 20-year-old.

The rest will be shouldered by young people in the form of higher premiums.

Higdon wonders how his peers, already scrambling to start careers during a recession, will react to paying more so older people can get cheaper coverage.

“I suppose it all depends on how much more people in my situation, who are already struggling for coverage, are expected to pay,” Higdon says. He’d prefer a single-payer health care system and calls age-based premiums part of the “broken morality” of for-profit health care.

To be sure, there are benefits that balance some of the downsides for young people:

_ In roughly six months, many young adults up to age 26 should be eligible for coverage under their parents’ insurance — if their parents have insurance that provides dependent coverage.

_ Tax credits will be available for individuals making up to four times the federal poverty level, $43,320 for a single person. The credits will vary based on income and premiums costs.

_ Low-income singles without children will be covered for the first time by Medicaid, which some estimate will insure 9 million more young adults.

But on average, people younger than 35 who are buying their own insurance on the individual market would pay $42 a month more, according to an analysis by Rand Health, a research division of the nonpartisan Rand Corp.

The analysis, conducted for The Associated Press, examined the effect of the law’s limits on age-based pricing, not other ways the legislation might affect premiums, said Elizabeth McGlynn of Rand Health.

Jim O’Connor, an actuary with the independent consulting firm Milliman Inc., came up with similar estimates of 10 to 30 percent increases for young males, averaging about 15 percent.

“Young males will be hit the hardest,” O’Connor says, because they have lower health care costs than young females and older people who go to doctors more often and use more medical services.

Predicting exactly how much any individual’s insurance premium would rise or fall is impossible, experts say, because so much is changing at once. But it is possible to isolate the effect of the law’s limits on age-based pricing.

Some groups predict even higher increases in premiums for younger individuals — as much as 50 percent, says Landon Gibbs of ShoutAmerica, a Tennessee-based nonprofit aimed at mobilizing young people on health care issues, particularly rising costs.

Gibbs, 27, a former White House aide under President George W. Bush, founded the bipartisan group with former hospital chain executive Clayton McWhorter, now chairman of a private equity firm. McWhorter finances the organization. The group did not oppose health care reform, but stressed issues like how health care inflation threatens the future of Medicare.

“We don’t want to make this a generational war, but we want to make sure young adults are informed,” Gibbs says.

Young people who supported Barack Obama in 2008 may come to resent how health care reform will affect them, Gibbs and others say. Recent polls show support among young voters eroding since they helped elect Obama president.

Jim Schreiber, 24, was once an Obama supporter but now isn’t so sure. The Chicagoan works in a law firm and has his own tea importing business.

He pays $120 a month for health insurance, “probably pure profit for my insurance company,” he says. Without a powerhouse lobbying group, like AARP for older adults, young adults’ voices have been muted, he says. He’s been discouraged by the health care debate.

“It has made me disillusioned with the Democrats,” he said.

Ari Matusiak, 33, a Georgetown University law student, founded Young Invincibles with other Obama campaign volunteers to rally youth support for health care overhaul.

Age rating fails as a wedge issue because the pluses of the new law outweigh the minuses for young adults, Matusiak says.

“And we’re not going to be 26, 27, 33 forever,” Matusiak says. “Guess what? We’re going to be in a different demographic soon enough.”

Nationally representative surveys for the Kaiser Family Foundation have consistently found that young adults are more likely than senior citizens to say they would be willing to pay more so that more Americans could be insured. But whether that generosity will endure isn’t clear.

“The government approach of — we’ll just make someone get health care and pay for someone else — definitely NOT what I want,” says Melissa Kaupke, 28, who is uninsured and works from her Nashville home.

In Chicago, Higdon says he supports the principles of the health care overhaul, even if it means he will pay more as a young man to smooth out premium costs for everyone.

“Hopefully I’ll be old someday, barring some catastrophic event. And the likelihood of me being old is less if I don’t have a good health plan.”

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Sebelius, WellPoint Continue Battle Over California Rates

Published 2/12/2010

WellPoint Inc. (NYSE:WLP) says the cost of providing individual health insurance in California is soaring, but a federal regulator says the company should be using its national profits to hold down premium increases.

Anthem Blue Cross of California, a unit of WellPoint, Indianapolis, recently announced that it would be increasing premiums for some California individual health insurance customers by as much as 39%. The increases are set to take effect March 1.

California Insurance Commissioner Steve Poizner asked Anthem to postpone the increase, to give an independent actuary time to verify whether the increase is justified.

Kathleen Sebelius, the U.S. secretary of Health and Human Services and former Kansas insurance commissioner, wrote to ask Anthem Blue Cross executives for an explanation of the increase, and she suggested that the proposed increase shows why the United States health reform.

Now WellPoint and Sebelius have fired off new letters.

Brian Sassi, president of the consumer business unit at WellPoint, writes to Sebelius that WellPoint’s profit margins in California are a little lower the profit margins of competitors in the state.

Anthem earned $12.62 per member per month in 2008, compared with an average of $1.845 per member per month at one nonprofit competitor and $13.22 per member per month at another.

Only about 10% of Anthem’s health insurance customers in California are individual health insurance policyholders, and the proposed 39% increase that is getting most of the media attention affects a relatively small percentage of individual policyholders who insist on sticking with their current policies and will be changing age categories, Sassi writes.

“The rate changes excluding the impact of age-category changes range from a 20.4% decrease to a 34.9% increase,” Sassi writes.

Many individual insurance policyholders can reduce the effects of the proposed premiums increases by changing products, Sassi adds.

WellPoint welcomes the California Department of Insurance review of the rate increases and believes it can show why the increases are actuarially sound and necessary, Sassi writes.

“Rate increases reflect the increasing underlying medical costs in the delivery system, which are unsustainable,” Sassi writes.

Overall health insurance rates are increasing because of factors such as increases in provider prices and the aging of the population, but other factors are accounting for the rapid increases in the California individual health insurance market, Sassi writes.

When the economy is bad, only the sickest individuals choose to keep paying for individual health coverage, and that means the insureds remaining in the pool use more services, Sassi writes.

Meanwhile, Sassi writes, the healthier insureds who are keeping their coverage are migrating toward the cheaper, higher deductible policies, and that makes the risk profile of the insureds who are sticking with the lower-deductible policies look even worse.

“Other individual market health insurers are facing the same dynamics and are being forced to take similar actions,” Sassi warns.

To prevent antiselection in the individual health insurance market, WellPoint believes that Congress must require all Americans to have some kind of health coverage, provide subsidies for people who have serious trouble paying for coverage, and impose significant penalties on individuals who go without coverage, Sassi writes.

Sebelius does not discuss the state of the California insurance health insurance market in her reply, but she notes that WellPoint as a whole reported $2.7 billion in net income for the fourth quarter of 2009.

“It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options: pay more for coverage, cut back on benefits or join the ranks of the uninsured,” Sebelius writes. “High health care costs alone cannot account for a premium increase that is 10 times higher than national health spending growth.”

The Anthem decision to raise rates demonstrates the need for reforming the health insurance system, Sebelius writes.

“Reform will end the worst insurance company practices and put doctors and patients — not insurance companies — in charge of medical decisions,” Sebelius writes. “If we fail to implement reform, insurance companies will continue to prosper while families will continue to struggle

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