Health Insurance Blog

On BlueCross BlueShield of Illinois’ website they have details on a new Illinois health insurance law that went into effect on June 1st.  The Young Adult Dependent Coverage Law states that if you have dependents meeting certain criteria  you may be able to extend their coverage under your current health insurance policy.

Some eligibility requirements for non-military dependents include:

1. Must be under the age of 26
2. Unmarried
3. Do not have to be enrolled as a full time student

Some eligibility requirements for military veteran dependents:

1. Must be under the age of 30
2. Unmarried
3. Do not have to be enrolled as a full time student
4. Illinois resident
5. Must receive a discharge other than dishonorable

Dependent coverage change doesn’t apply to everyone.  Additional eligibility requirements may apply.  If you have questions contact BCBSIL if you are a member.  If you have coverage under your employer’s health plan, contact your group administrator.

According to the article “Who Gets Employer-Based Health Insurance” by Catherine Rampell in the NYTimes Economix, an important issue of the health insurance debate going on in Washington DC is what to do with employer-based health insurance.  Only in the US does losing your job translate to possibly losing your health insurance coverage.  That’s why individual health insurance is sometimes a better option.  That’s also one of the reasons why the government is looking towards a new health plan.

In the Henry J. Kaiser Family Foundation report on health benefits, not all American companies offer health insurance to its employees.  Often times, very small companies cannot afford to offer this benefit.  Of the companies that do offer the benefit, they only pay for a portion of the cost, while the rest is taken out of the employee’s paycheck each pay period.  A few do offer to cover the whole cost, but not many.

Many Americans are very comfortable with the employer-based health insurance option and worry about it going away.  This has lead Congress to consider not eliminating it altogether. 

According to an article written by Robert Pear of the New York Times, broad consensus among the Democrats on the redeployment of our country’s health care system is not far off.

Democratic leaders in both houses said they would indeed make health insurance mandatory, requiring  individuals to carry health insurance coverage and employers to help pay for it.  The question is, how will they raise the necessary tax revenue to support it?  On way that has been discussed is taxing employer health benefits.

In addition to making health insurance compulsary, the bill outlines yesterday would allow people to enroll in a governement run health plan similar to Medicare.  There are other suggestion being floated by Senate Democrats that would limit the scope of Government involvement, but would still create a plan to compete with private health insurance companies via a “Co-op”.

A recent report prepared by PriceWaterHouseCoopers and released by AHIP breaks down how each dollar that is spent by Americans on health insurance is broken down.

According to the report:

• $0.33 is spent on physicians services
• $0.20 is spent on inpatient costs
• $0.15 is spent on outpatient costs
• $0.14 is spent on drugs
• $0.05 is spent on other medical services
• $0.06 is spent on government payments, compliance & other administrative expenses
• $0.04 is spent on consumer services, provider support & marketing
• $0.03 health insurance company profits

The Complete report can be found here http://www.americanhealthsolution.org/assets/Uploads/risinghealthcarecostsfactors2008.pdf

A representative in the U.S. House of Representatives will reintroduce legislation to help small employers pay for their employees’ small business health insurance, reports Astrid Fiano in DOTMed Business News. The CHOICE Act, according to sponsor and chair of the House Small Business Committee Nydia Velasquez, will do the following:

• Offer a tax credit equal to 65% of the cost of health insurance offered to employees
• Allow multiple small companies to pool their employees in voluntary health collectives, which will result in lower health insurance rates because of the reduction in insurers’ risk
• Set the stage for a possible health insurance mandate for small employers, to be partly paid for by the aforementioned tax refund

The bill promises to lift some of the burden off the small companies that are known to be major drivers of the American economy and has bipartisan support.

(Photo credit: gcoldironjr2003 under CC 2.0)

According to the Associated Press’ Melinda DeSlatte, the 2010 state budget may include tax breaks on Louisiana health insurance. Representative Gary Smith has proposed giving tax credits to small businesses that provide their employees with employer-sponsored health insurance. He also wants to offer tax credits to people who pay for individual health insurance policies, which is predicted to cost over $130 in lost tax revenue in its first year. These proposals would expand access to health insurance.

While the state currently has a billion-dollar budget deficit and plans to make cuts to health care programs, Smith believes that the health insurance tax credits will save the state government money in the long term, since fewer people would be uninsured and have to use state-funded health care services. Melinda says that Louisiana Governor Bobby Jindal has not yet expressed his opinion about this proposal but plans to make recommendations later this week.

If you have health insurance, either through an employer or one of the many individual health plans, it’s possible that you still don’t have enough coverage! Roxanne Patel Sheplavy exposes the new health trend in the February 2009 issue of Fitness magazine: more Americans than ever are underinsured. The Commonwealth Fund defines being “underinsured” as spending 5-10% of your income on out-of-pocket expenses, including skyrocketing deductibles and extremely expensive co-payments that may prevent individuals from recieving essential medications or care. One in seven adults in 2007 fell in this category, and in this economy even more employers and insurers are cutting back on what their health insurance policies cover.

Fortunately, Roxanne stresses that there are resources available to help the underinsured before they are burdened by medical debt (believe it or not, three-quarters of medical bankruptcies involve individuals and families that had insurance!). These organizations may be able to assist you in paying your bills, renegotiating payments, or whatever else you need to handle your medical expenses.

Where To Go If You Are Underinsured:

• Co-Pay Relief
• Healthwell Foundation
• Patient Services Incorporated
• Patient Access Network Foundation
• CancerCare

According to Angela Gonzales in the Phoenix Business Journal, LifeWise Health Plan has decided to exit the Arizona health insurance market. The insurer stated that the plan did not have enough enrollees to turn a profit. LifeWise launched its Arizona plans in 2004.

Fortunately, policyholders won’t have to worry about having developed conditions that would prevent them from finding affordable individual health insurance on the open market. Blue Cross Blue Shield of Arizona has agreed to take all former LifeWise customers that were previously healthy and offer them a plan of similar coverage and cost, even if they developed a health condition after buying the initial policy. In order to take advantage of this offer, employer-sp, Angela onsored health insurance groups must switch to BCBSAZ plans by May; individuals have until September to make the switch.

About 16,000 Arizona policyholders in total will be affected by this closure, Angela claims.

The economic stimulus bill, which was recently passed by Congress and is expected to be signed by President Obama today, includes help for unemployed individuals who are struggling to maintain their health insurance under COBRA. The Los Angeles Times’  Melissa Healy notes that there have been a lot of questions swirling about the topic. Here is an FAQ:

Q: Who qualifies for a COBRA subsidy?

A: Anybody who 1) worked for an employer that is required to offer a COBRA health care coverage extension (some smaller employers aren’t), 2) earns under $150,000 as an individual or $250,000 for a joint tax return, and 3) was either laid off after Sept. 30, 2008 or is laid off between now and Dec. 31, 2009.

Q: How much does the COBRA subsidy cover?

A: The government will subsidize 65% of your premium, paid directly to your former employer.

Q: How long will this subsidy last?

A: It lasts for 9 months in total, including retroactive payments.

Q: What if i’ve been paying the entire COBRA premium myself?

A: In that case, you will be reimbursed for 65% of your premium dating back to Sept. 30, 2008; either in credit for future COBRA payments or a refund if you’re no longer enrolled. You will then have around 4 months left of subsidized COBRA health coverage.

Q: What can I do if I’ve been laid off and didn’t enroll in COBRA because it was too expensive?

A: Employers will be required to allow you another opportunity to sign up for the program.

Q: Do I have to provide proof of income to apply for COBRA?

No, but if it turns out that you make more than the upper limit, you’ll have to pay the subsidy back. 

I hope this post has answered some of your questions about COBRA health insurance.

(Photo credit: abraaten under CC 2.0)

While COBRA is helpful as individual health insurance to those who have been laid off, it is temporary and far more expensive than employer-sponsored health insurance, says Enhanced Online News. Even though the economic stimulus package proposes to pay up to half the cost of COBRA premiums for one year, one of several alternatives may be better suited to your health care needs. All of these options will ensure that you don’t experience a long gap in coverage.

If you expect to find a job with health benefits in the relatively near future, short term health insurance might be your best bet.

If you are generally healthy, high-deductible plans can help you save money on insurance while unemployed. They offer catastrophic coverage with lower premiums and few fringe benefits.

If you had family health insurance at your last employer, buying individual health plans for each member could actually be cheaper than buying a family plan on the open market. Children may also be eligible for enrollment in government-funded health programs like SCHIP.

No matter your situation, get health insurance quotes from various insurers; you may find a better deal than COBRA from another company.

(Photo credit: erik! under CC 2.0)