Health Insurance Blog

Health Savings Accounts, more commonly known as HSA, were launched by the government in the 4Q of 2003. Initially the effectiveness of these health insurance vehicles was questioned, due to the slow adoption rate by Americans, but now five years later HSAs have proven to be a great way to save money if you understand them and utilize them properly.

With an HSA (paired with a high-deductible health plan) you can save as much as 50% in monthly health insurance premiums.  Your deductibles will indeed be higher should you need to utilize health care but if you properly fund the Health Savings Account, using the money you saved by paying lower premiums this money can be applied towards covering the higher deductible.

Health Savings Accounts have tax advantages as well.  All of your contributions to your HSA — that’s right 100% — are tax free.  In addition the interest that accumulates on the money that you maintain is 100% tax free.  Furthermore, withdrawals from your HSA are 100% tax-free when used for qualified medical expenses.

In years where your health care utilization is low or non-existent, not only will you have saved up to 50% on your premiums, but the money that you used to fund the HSA was not taxed as income, and it has grown tax free in an interest bearing account.

At age 65, you can withdrawal the money from your HSA for any reason, and be taxed at the ordinary income rate.

As you can see by the above, there are many economic reasons why a health savings account is a good health care solution for your family, particularly if you and your family are generally healthy.

Health insurance companies are legally obligated to offer high-deductible health plans that that are eligible to be paired with an HSA, but the reality is, if they encourage their customers to opt for health plans with a higher deductible and lower premiums, they will cut into their profits.   Subsequently, health insurance companies do not always promote their HSA options as vigorously as other health insurance options.

If an HSA seems like the right health care choice for your needs, you can compare rates here at healthinsurancesort.com.  Alternatively, if you plan to shop for your health plan from a agent or broker, be sure to ask about what HSAs are available.

Last week, Blue Cross and Blue Shield of Arizona (BCBSAZ) announced the launch of 5 new Arizona individual health insurance plans .  The new plans deliver a wide range of co-insurance and deductible levels and can save customers as much as 40% from previous health insurance options.

The new individual health insurance plans offered by BCBSAZ are:

BlueOptimum - A PPO that features co-pays for many services and the broadest level of health coverage among the new plans introduced last week.

BlueValue - A PPO that features a mix of co-pay and co-insurance with lower monthly premiums than Blue Optimum.

BlueEssential - An ultra affordable PPO with basic coverage and a $1,000 cap on preventive care.

BluePortfolio - A high deductible health plan (PPO) that can be paired with a Health Savings Account (HSA).

BlueSecure and BlueSecure Plus -HMO plans.

A social networking site was recently launched that targets health care professionals called affordablehealthinsurance.net.  The community provides an forum where members can exchange ideas, and solutions to achieve affordable health insurance for all Americans and to cure the country’s ailing health care system.

The site is free to join, and it provides similar functions to other social networking sites such as linkedin or facebook.

It will be interesting to see if affordablehealthinsurance.net is able to establish a core group of users that will be substantial enough to sustain this site as a vibrant community.

Hartfordbusiness.com reports that on October 1 a new law will go into effect in Connecticut that regulates health discount plans.  Since April, the state department of insurance has received dozens of complaints about health discount plans, many times when people buy mistakenly thinking that they are buying health insurance.

Health discount plans provide discounts on medical bills (as much as 40% for some services while in some cases the discounts can be less than 25%)  from certain health care providers, however they do not reimburse providers on behalf of consumers the way health insurance plans do.

The new law requires that each health discount plan disclose to the state its contracts with marketers.  Plans have already been required to be licensed with the state in order to sell their plans in CT.

There has been controversy surrounding health discount plans in many states

Minnesota – 12 companies were ordered to cease operations in 2005, after using misleading advertising to trick customers into believing they were buying health insurance.

Montana — Prudent Choice was fined $150,000 and ordered to reimburse Montana residents who bought fraudulent health discount cards.

New York, South Dakota, Maryland and Florida have had similar problems with rogue marketers and their misleading sales tactics.

Over time many states will likely follow Connecticut’s lead and enact some type of legislation to protect health care consumers from aggressive sales tactics related to these plans.

If you are not precluded from purchasing a true health insurance plan due to preexisting health conditions,  you should opt for a major medical health plan, as opposed to a health discount plan.  There are many affordable health insurance options, that will provide protection as opposed to simply discounts.

UnitedHealthCare has launched a health plan in Texas designed specifically to help enhance the well-being of Spanish speaking Hispanics and their families.

The plan called PlanBien, includes culturally relevant information and programs tailored to meet the health care needs of Hispanics such as:

1.  Specialized educational materials printed in Spanish.

2.  Bilingual photo stories depicting how a family discusses common health concerns;

3.  Trained and certified bilingual customer service representatives available to answer questions and locate Spanish-speaking doctors for particiapnts

4. A bilingual provider directory that lists physician offices with Spanish-speaking doctors, and more.

PlanBien is currently  available to small and medium-sized businesses in select markets in Texas, including San Antonio, Austin, and Houston, as well as labor organizations and public-sector entities.  PlanBien is currently not offered as part of an individual health insurance plan, but possibly will be in the future.

For more information about individual health insurance in Texas.

More information about Latino Health Solutions, visit UnitedHealthcare’s bilingual Web site, www.uhclatino.com.

Senator Barack Obama has not released specific details about his health care reform plan, although he has stated that universal health care is his ultimate goal.

The Commonwealth Fund has released a detailed plan which they claim is very similar to Obama’s plan. and it can be inferred that the it can be used to fill in the blanks for the missing pieces within Obama’s Plan.

One of those “blanks” that the Commonwealth Fund has outlined is a “Play-or-Pay mandate” on employers,  I.e. companies that do not provide employer-sponsored health coverage to their employees will be penalized with taxes.   The National Center for Policy Analysis (NCPA) estimates that this would amount to an additional 7% payroll tax.

John Goodman, the President of the NCPA says

During the Democratic primary, Sen. Obama criticized Sen. Clinton’s proposal to mandate health coverage by asserting she would try to force people to buy something they cannot afford and then tax them when they don’t buy it leaving them worse off than they were.  Exactly the same criticism applies to Obama’s pay-or-play mandate.

Goodman went on to say that

A tax on labor (or mandated labor benefits) makes employment more expensive.  It encourages employers to hire fewer workers, adopt labor-saving technology, employ part-time workers, and outsource labor.

There are many unknowns in how this plan for health care reform would actually play out,  but many experts and think tanks, such as NCPA, believe that the costs will be much higher than Sen. Obama’s advisers predict, and achieving universal health care will be more difficult to achieve.

To read a more comprehensive and nonpartisan break-down of the Obama health plan, visit http://www.ncpa.org/pub/ba/ba628/.

The above commentary is the opinion of the NCPA, there are likely many other think tanks that are firm suppporters of Obama’s plan.  In the coming weeks, we will summarize and present the opinion of other organizations that have contrary views.

According to John Goodman, from the National Center for Policy Analysis (NCPA), McCain’s health care reform is the more fundamentally sound of the two candidates plans ~~ Senator Obama’s health care plan will be profiled next in the 2nd part of this two part series.

Currently taxes are used to encourage the purchase of private health insurance, Obama’s plan would largely keep this intact while McCain’s plan would revamp it and put in place a systemt that would be fairer and more efficient in insuring the uninsured and keeping health costs contained.

Under the McCain health care plan, employers could no longer buy health insurance with pretax dollars. Insurance payments made by employer on behalf of employee would be taxable to the employee (like wages). However, every individual would get a $2,500 tax credit (and every family would get $5,000) to be applied against these taxes owed.

The McCain plan does not raise or lower taxes. Instead, it takes the existing system of tax subsidies and treats everyone alike, regardless of income or job status.  Low to moderate income families would receive as much tax relief as the wealthy.  Similarly, people who buy individual health insurance would receive the same tax relief as well.

Another interesting facet of McCain’s health care plan would allow people to purchase health insurance accross state lines, thus creating a marketplace with more options and a more competition, which would drive down prices.

Goodman’s conclusion on these competing health care plans is that

The McCain plan will not solve all our health care problems. But it has a far better chance of positively reforming the system than any other plan that has been proposed this campaign season.

As the election approaches, there will be more developments and editorial regarding health care reform that we will cover here at healthinsurancesort.com

Nine health insurance companies, including Blue Cross Blue Shield of Florida (BCBSF), have agreed to participate in a plan to provide affordable health insurance coverage to the 3.6 million Florida residents that are currently uninsured.

The plan proposed by Governer Charlie Crist is called Cover Florida.

The Florida health plans offered by carriers as part of Cover Florida will be on a guaranteed issue basis (meaning that applicants cannot be refused coverage).  BCBSF will offer two health plans, catastrophic coverage for $150 per month, and a non-catastrophic plan for $50 per month on average.

Health insurers participating in the program can offer health plans with lower premiums because they are exempt from the requirement to inlcude more than 50 state mandated beenefits in the health plan

In addition to BCBSF, some of the other insurers who are participating in the program include: UnitedHealthCare, Total Health Choice Inc., Universal Healthcare, JMH Health Plan, Medica Health Plan of Florida, American Management Advisors and Celtic Insurance Co.

A number of national health insurance companies including Aetna, Humana, and CIGNA choose not to participate in the program.

In a recent survey conducted by Mercer Consulting, more than half of the 1,500 companies surveyed (59%) said that they planned on keeping their health care costs in check by raising the deductibles, co-pays and out-of-pocket spending limits that their employees must pay.

On average health care costs in 2009 are expected to rise about 6% for both employers as well as the workers themselves — roughly on par with last years increase.

The Mercer Group also found that

• Nearly half of the companies surveyed (47%) indicated that they encouraged their employees to enroll in plans with lower premiums and higher deductibles
• About one-in-five (19%) said they planned to offer a consumer directed health plan
• The average deductible rose from $250 to $400 per individual and $1000 to $1500 for a family

As large companies continue to reduce the amount that they contribute towards the health care expense of the employee, individual health insurance plans will continue to become a more and more attractive option for family health insurance coverage.

At the Democratic National Convention, Barack Obama pledged to fight for Universal health care if elected, and vowed to finally keep the promise of affordable health insurance and accessible health insurance for all Americans.

Although specific plans about how his health care plan would work, the Democrats stand behind a platform of Universal health care and believe it to be a shared responsibility between all constituents including employers, employees, health insurance companies, providers, and of course the Government.

Fifteen years ago, President Clinton had a plan for sweeping health care reform that failed miserably partly as a result of alienating both legislators and insurers.   Obama will likely learn from the mistakes made in the past and move gradually towards the end goal of universal health care, while keeping key constituents involved in the process.

Possible first steps for Obama health care reform could include expansion of existing programs such as Childrens health insurance programs at state level, as well as making Medicare available to early retires, who currently pay large monthly premiums for individual health insurance.