Long-Term Care Insurance: When Health Insurance Doesn’t Cover It

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Providing care for an aging parent or loved one is truly a full-time job, as caregivers play a number of roles – from hands-on health provider and friend to surrogate decision-maker and advocate. When these roles are assumed in addition to typical workplace and family duties, they can prove very costly to both individuals and their employers. But until people experience it firsthand, most of us don’t realize the dramatic impact it can have on our finances, career, health and family. I certainly didn’t.

Planning for Long-Term Care

With limited information, I moved my father into my home when he was 75-years old. As his health declined, I missed more critical work time and it started costing more and more to support him. My husband and I worked extensive hours to provide for his growing need for care which was challenging since we also needed to care for two teenage kids.  The increased costs of caregiving inevitably altered our plans for retirement. Looking back, I understand how not being fully prepared to provide care can impact a family. I’m also convinced that planning for my own later years is a must for me and my family.

A hard truth that families often fail to realize is that government programs like Medicare and Medicaid will not fully meet their long-term care needs. The general intent of health care is to return a person to good health, so its focus is on restoring health. In contrast, long-term care focuses more on caring than on curing. Generally, long-term care provides custodial care. An easy way to remember is “Care vs. Cure.”

Medicare only covers limited skilled care if it improves a person’s health condition and no coverage is available for custodial care. Medicaid covers nursing home stays for poor and low-income citizens, which often requires a person to deplete his or her assets before qualifying for coverage.

The harsh reality is that health insurance may not cover all of the necessary expenses to meet your needs. According to the MetLife Mature Market Institute, the number of adults providing care for an aging parent more than tripled over the past 15 years. And as baby boomers continue to age, the need for long term carewill soon reach unprecedented levels. Long term care insurance policies offer options to help cover in-home care by a nurse or family member or to help pay for care in an assisted living facility. With more people falling into the “sandwich generation” – adults caught in the middle of caring for both their children and their parents – they will find value in the opportunity to plan ahead and prepare for their long-term care needs.

The demand for long term care insurance is on the rise and the cost of being unprepared is extremely high for both individuals and businesses. Now is the right time for you to do your research and sit down with your family to discuss the best plans to ensure your family has the best coverage possible.

 

This post was provided by guest author Dan S. at “Health Insurance Doesn’t Cover It.”

Health Insurance Doesn’t Cover It is a comprehensive website that provides tools and information to help people research the different types of supplemental coverages available to help pay for unexpected and unwelcomed surprises. 

 

How to Choose the Cheapest Health Plan that Still Meets your Needs

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This post appeared earlier on Mint.com. 

Maybe it’s Open Enrollment time or maybe you’re starting a new job that offers health benefits.  What’s the key behind all the terms – HMO, PPO, HDHP—and what can they tell you about how much that plan will really cost you?

The two most common terms, HMO and PPO, have to do with physician choice. And a HDHP is about the deductibles. As a general rule? HMOs will offer greater savings than PPOs, but at the cost of less choice and control. And HDHPs can save you even more money if you are healthy and don’t get frequent medical care.

So which plan fits you?

People with an HMO

  • Pay lower monthly premiums
  • Have to go through a primary care physician for everything
  • Have to get a referral for specialty care

People with a PPO

  • Pay higher monthly premiums
  • Can generally go directly to specialists
  • Will usually pay more for specialty care when they do get it

People with a HDHP (High deductible health plan)

  • Pay lower monthly premiums
  • Have a high deductible—you’ll be responsible for at least $1,200 out-of-pocket before your plan pays anything
  • Can open an HSA (health savings account) to save money specifically for health care costs with big tax advantages
  • Are usually younger and healthier

Some things are consistent across HMOs and PPOs – both have to cover preventive care at no cost to you (and that’s even if it’s an HDHP, and you haven’t met the deductible yet!), emergency care at out-of-network hospitals at the same level of coverage as in-network hospitals, and both have the same annual and lifetime out-of-pocket maximums.

Prescription coverage will vary by the plan.

If you’re overwhelmed about choosing the best plan for you, try focusing on two things: Physician choice and how often you need health care. Are willing to pay more to get easier access to specialty care when you want it? And are you willing to chance having to pay a higher deductible to have lower monthly premiums?

For many people, simplifying it to these two preferences will help lead you to the right plan.

Do you Need Supplemental Health Coverage?

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With more and more people signing up for high deductible health plans, supplemental health policies have also become more popular. According to America’s Health Insurance Plans, high deductible health plan enrollment has grown by over 18% since 2011. Since these plans have deductibles of anywhere from $1,200 to $8,000, a supplemental policy to pad your plan can look very tempting.

Supplemental plans can either help pay your deductible and out-of-pocket costs, or they can pay out a lump sum of money either at one time or each day that you qualify for benefits.

The plans can be pretty inexpensive—as low as $12 a month for an individual and $20 to $30 a month for a family. But the benefits can vary drastically so make sure you know what you’re buying.

Considering supplemental health coverage? Ask these questions.

How much would an emergency would cost you?

Add up your deductible and the out-of-pocket you would owe for a few days in the hospital. Of course, you can’t be sure without knowing the actual costs, unless your plan has only fixed co-pays. But you can estimate: assume any major event would cost well over $10,000—how much would your co-insurance be?

Getting a rough idea will help you understand how useful a supplement might be.

Would you have other (non-medical) costs?

In an emergency, you might find yourself with other financial hardships such as lost wages, living expenses, or transportation costs. A supplemental policy can cover these expenses. Usually, the plan pays you a cash sum and you can decide how to spend it. One advantage of this type of policy is that it can help cover expenses that are not HSA-eligible.

What are the plan’s benefits?

Will the benefits cover enough of your likely costs to be worth it? A typical accident or injury plan may pay out $250 for each day you’re in the hospital, while a critical illness policy will pay a lump sum if you are diagnosed with cancer or have a stroke. If your day to day costs would far exceed the daily benefit, the policy is not worth the money.

How do you qualify for benefits?

It’s important to read the fine print here. A policy may only start paying benefits if an illness or injury reaches a certain degree of severity or may limit the days of benefits it pays. It may also pay much lower benefits for more common diseases—the times your most likely to need it. For example, one consumer was told his policy would pay $5,000 for cancer, but in reality, the $5,000 was only for internal cancer (breast or lung) and skin cancer was paid at $100.

The bottom line is, weigh the costs and benefits of supplemental health insurance carefully. If you have a typical health plan, you probably do not need an additional policy. But if you have a very skimpy or high deductible plan, you’re more likely to find a supplement to be helpful.

And most importantly, remember that these plans are meant to be what the name suggests—a supplement—and not a replacement for full health insurance.

 

How Does Your HSA Compare?

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Wondering how your HSA stacks up compared to others?

Are you saving enough or spending too much?

We decided to look at Simplee users as a group to see. As of the end of June 2012, the average Simplee member had $1654 in their HSA. This was up from $1385 at the beginning of the year, but not quite as high as the average of $2235 the previous fall. That seems to suggest many people are saving up as the year goes on and then paying out their deductible by the end of the year.

The good news? Most consumers seem to be saving more than they’re spending. For the first half of 2012, Simplee users contributed an average of $2289 each quarter to their HSA and only distributed $1903 per quarter.

So how much should you have in your HSA? Well, just like any savings account, the more the better—but of course, within reason. You obviously don’t want to tuck away so much money that you can’t afford your other bills. But at the very least, you want to have enough to cover your deductible.

The average American has $1490 in their HSA (as of 2011, according to the Employee Benefits Research Institute), so it looks like Simplee users are doing a bit better than average. Way to go!

To track your HSA transactions and manage your expenses easily, log in to Simplee.

Six HSA Tips for Beginners

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This post originally appeared on Mint.com. 

High Deductible Health Plans paired with Health Savings Accounts (HSAs) are one of the fastest growing types of plans.

Just opening an HSA or still trying to figure out how yours works? Many people find the idea of managing not just a health plan, but now a health plan with a linked savings account a little more daunting. How much should you save? What can you spend the money on?

An HSA doesn’t have to complicate life. If you can get behind a few simple tips, you could be on your way to big savings.

WHEN: Open your HSA right away.

Don’t wait until you have medical expenses. Any expenses that you incurred before you opened the account won’t qualify for reimbursement.

HOW MUCH: Max it out first.

In general, you can take advantage of the full tax benefits of and HSA by contributing the maximum allowed—within reason of your budget of course. HSAs have the best tax benefits compared to IRAs or 401ks. You never pay taxes for contributions, interest, or distributions, so put the maximum contribution in your HSA first. The exception is if your employer matches 401k contributions—then, it’s best to put your money in the 401k up to the matched amount.

WHO: Spend on you, your spouse, your dependents.

If you have family health insurance, you can pay for your spouse’s medical expenses with your HSA even if your spouse doesn’t share the HSA.

WHAT: Get your medical supplies.

Check out what purchases you already make that qualify as HSA expenses. You can use your HSA on items such as bandages, crutches, contacts and contact solution, or breast pumps and lactation supplies.

WHAT: Pay for premiums.

In general, you can’t use HSA funds on health insurance premiums but there are some exceptions:

  • COBRA benefits
  • Medicare premiums
  • Insurance premiums after age 65
  • Long-term care insurance.

WHAT: Finally, don’t spend it at all.

Instead, pay your medical bills with non-HSA money. Sounds counter-intuitive, right? Didn’t you save that money just so you could use it on health care? While this is the purpose of an HSA, you also have the option to just let the money grow. HSA funds grow tax-deferred, so you won’t pay any tax ever unless you use the funds to pay for non-medical expenses (at least until age 65).

 

 

Health Care gets Cheaper for Women

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Beginning August 1st 2012, women can expect to pay a lot less for preventive care, thanks to the Affordable Care Act, the health reform law. Plans were already required to cover a list of fourteen preventive services under the Act, such as mammograms and cervical cancer screenings. But now eight additional services will be covered at no out-of-pocket.

That means women will no longer pay deductibles or co-pays on:

  • Annual women’s exams
  • Contraception and sterilization
  • STD screening and counseling
  • HIV screening and counseling
  • Testing for HPV
  • Breastfeeding support and supplies
  • Diabetes screenings while pregnant (gestational diabetes)
  • Domestic violence screening and counseling

About 47 million women are expected to be eligible for these additional benefits—great news because right now, one out of three insured women have such high out-of-pocket costs, they avoid getting needed medical care.

When will I see the benefits?

The benefits don’t exactly kick in immediately: They’ll go into effect when your health plan renews. For most people, this means the first of the new year or the start of an academic year.

Does this include all health plans?

There are a few exceptions: Some health plans that were created before March 23, 2010 are exempt as “grandfathered” plans. And some religious organizations (such as churches or schools) do not have to offer their employees the same benefits.

How do I find out if my health plan is included?

Call your health plan and ask if you have a grandfathered plan.

The Women’s Law Center has a nice script on what to say if you like having all the details. If you work for a religious organization, ask your employer.

Keep in mind there are a few limitations—some services are only covered annually (HIV, STD, and domestic violence screenings) or have other restrictions (HPV screening is covered after age 30). For a full list of all the benefits click here.

 

 

Simplee’s Automatic Error Detection Saves Users Thousands of Dollars

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Have you had a chance to check out Simplee’s error detection feature yet?

We’ve been hearing from many users about how they’ve saved money or solved billing problems.

First, there was the user who told us he fixed a billing problem in ten minutes, after fighting his insurance company about it for the last four months.

Another user tweeted that he found an error that saved him $1,000.

And then, we interviewed another user who saved over $1,000 on several medical bills just by checking for errors. He said this didn’t even count another several thousand he saved by repeated calling out a separate error: His insurance company denying every claim because it believed he and his family had a second insurance plan that should be paying.

Using Simplee has made it easy for him to spot this error, plus additional ones such as duplicate claims or the incorrect insurance carrier being billed. He then uses Simplee’s notes feature to track the status of claims he’s disputing, so he knows not to pay them yet.

So far, he’s found that over 70% of the claims for himself, his wife, and two kids, contained some kind of problem that needed to be addressed before he paid the final bill.

To review your own account, log in to Simplee and look for our red, orange, and green flags next to a claim. These flags will tell you when we think we’ve spotted a problematic claim or a tip for saving money.

Do you have a success story about using Simplee? Let us know! Your tips could help other members save.

 

Tricks to time your health care to get the most out of your plan

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Just about every health plan has features that are tied to the calendar year: deductibles, annual benefit limits, and FSAs (Flexible Spending Accounts). And through just a bit of planning, you can save a lot of money on health care.

It’s all about timing. Try these tricks for getting the most out of your benefits.

Go on a deductible-spree:

Once you’ve met your deductible, it’s a good time to get any major, expensive services as well as other routine or elective care. That’s when your plan will pay out its full benefits. If you meet your deductible mid-year, try to plan any other health care services for that year. Waiting until the following year means you will have to pay the deductible all over again.

Watch benefit limits:

If you are getting repeating services – such as physical therapy, counseling, or chiropractic visits, don’t lose track of how many you’ve received. Many plans have an annual limit so stay within this number and know when the benefits roll over.

Get Free Dental Benefits:

Dental plans that offer free check-ups and cleanings usually use one of two methods to calculate your benefits: the calendar year or every 6 or 12 months. Find out what the rules are for your plan, and then pay attention—you know your dentist likes to send out reminder postcards and that Simplee will email you about unused benefits. Don’t ignore these!

Also keep in mind that some dental plans cover procedures up to a dollar maximum for the year. If you are close to reaching the max near the end of the year, but still need a root canal, you might want to wait until the next year for better coverage.

Spend down your FSA: Flexible Spending Accounts are use-it-or-lose it at the end of the year. Most turn over at the calendar year, but some plans use a fiscal or academic year. Make sure you know the date your plan renews, and spend down your account in time. If you find yourself with a large balance near the end of the year, you can always stock up on staples such as bandages or contact solution.

Do you have more tricks that you’ve used to squeeze the most out of your plan? Share with us!

 

Health Premiums Might Rise. But You’d be Buying Better Stuff.

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There are a lot of rumors and stories about health insurance premiums rising because of the health reform bill. Are they true?

The short answer is, it depends on who you are, and no one really knows. But some new rules will keep your premiums from exploding in cost, while also providing better coverage.

If you have employer coverage, it’s hard to say. Some think employers might stop offering health insurance and instead let their employees buy their own on the health insurance exchanges—which could be more expensive–or could be cheaper, depending on the employer.

If you have individual coverage and a pre-existing condition, you’ll probably see your premium decrease.

If you have individual coverage, and you’re pretty healthy, you might see your premium increase. But not simply because insurers want to raise prices—because your coverage will be better.

Here’s why: Right now, most of the health plans that exist are not up to the standards of the plans that will be offered in the health insurance exchanges in 2014—the place where most people will be shopping for coverage. The cheapest, most minimal plan that will be allowed in the exchange, a bronze plan, is better than the average plan offered right now.

So if you currently have the super-cheap plan, in 2014, it probably won’t be offered in the exchange. The lowest level plan will likely cost more than that super-cheap plan, but it will offer better coverage. And that means lower deductibles and cost-sharing for you (Remember, premiums aren’t the entire picture—what good is a health plan if you pay for it every month but you’re constantly paying out-of-pocket?).

So that’s one way health reform might increase your premiums. But there are also some ways it might hold them down:

First, almost 60% of people who will purchase insurance through the exchanges will be eligible for a subsidy. If you earn less than 400% of the Federal Poverty Line ($44,000 a year for an individual, $88,000 for a family) you’ll qualify for a sliding scale subsidy.

(How much? Punch your info into this Subsidy Calculator to see what you’ll get.)

Second, another part of health reform prohibits insurance companies from raising premiums by more than 10% unless they can justify to a board of experts that the increase is reasonable. While this might not keep premiums from rises, it will definitely prevent huge increases.

It’s a close call. The Congressional Budget Office estimates that with health reform, the average annual premium for an individual plan will be about $5,800 in 2016. Without the reform bill, it would be closer to $5,500.

It’s hard to say whether you’ll come out ahead on your premiums after health reform goes into full effect. But coming out ahead as far as good reliable coverage? That’s more certain.

Has your health insurance premium increased lately? Tell us about it.

 

 

Insurance Companies Are Courting You

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Have you noticed your health insurance company getting a little warmer and friendlier lately?

A trend of insurers “putting customers first” has definitely begun. Whether it will translate to real savings for consumers is the question.

In a great, recent blog in the New York Times, author Tanzina Vega talks about how insurers have been ramping up their PR campaigns, trying to combat the reputation the industry has picked up for bad service over the years. Now, many of the largest companies are trying to put more of a focus on their customers, in a variety of forms: discounts and rewards for losing weight or quitting smoking, consumer-friendly cost comparison tools, or just slick campaigns branding themselves as not just insurance, but family friendly health care solutions.

So this got us thinking. How do health insurers rank when it comes to customer satisfaction? Are they really that bad? Are they getting better?

We looked up ratings from the American Customer Satisfaction Index—a national scoring of major service sectors (ranging from 0 to 100). Turns out Americans’ opinion of health insurance companies has generally been getting better over the last 10 years. Though they are still near the bottom of the pack with an average score of 71: just a bit worse than the US Postal Service, which averaged 73, but still lagging far behind internet retail, at 81. However, most of us think calling our health plan is better than calling the airline we’re flying.

ACSI Health Insurance 2012
To compare other industries, visit http://www.theacsi.org/

 

Why the big push to please consumers now?

Much of it relates to the health reform bill, which is expected to make almost 20 million Americans newly eligible for private insurance coverage. So what better way to start competing for new customers?

So we might expect the score for health insurance companies to continue to rise, but is customer satisfaction the same as good health care coverage? Or could it be a distraction from increasing out-of-pocket costs? Reward programs are nice but when it comes down to needing a surgery covered, they’re no substitute.

We have yet to see, but one thing seems promising: insurance companies are paying more attention to you than ever before.

Tell us what your health plan has done for you that you love, and how you’d rank them on the Customer Satisfaction Survey.