But now I’m getting information on when insurance carriers file their new rates for ‘approval’ with the CDI. This isn’t easy stuff to read, so if you’re having a bout of insomnia one evening, you might consider checking out rate increase information as it is submitted.

So I started out with Aetna, and wasn’t going to be deterred by the fact that it was 93 pages. What you will see if you check this stuff out is what’s being proposed for new business rates quarter by quarter. Aetna and most other carriers have a 12 month rate guarantee so your rates don’t go up right away but as you all know they do go up at least once a year. But reading all that is taken into consideration, hhhmmmm. I knew the basics but looking at this was a bit daunting.

Then I decided to check out Anthem–their latest filing was 386 pages. But that’s because they have a billion plans and a somewhat convoluted way of assembling their rate sheets. But I went through it all anyway, looking to see what would potentially be happening with my rates once my guarantee expires. I’m not thrilled. If it read it right, it will be going up about $50/month.

You have to know that all carriers in our area are going to have to be doing something in order to comply with the new health care reform bills. And that is listed in these filings as a reason for the rates; no more lifetime maximums, preventive services covered with no cost sharing, no limits on complex radiology and lab tests, and so on. These are all going to add to their costs, once people catch on to particularly the preventive services piece. Check out what is being included in the preventive services arena.

My advice? Not only are rates going up, but many plans will be changing as well. If you are in the market for an individual/family plan, get rolling on it ASAP so you can take advantage of the carriers that offer a 12 month rate guarantee.

The word is out–according to Alison Bell of the National Underwriter web site insurance commissioners in several states, including California (Thanks Mr. Poizner!) have come out with a resolution urging keeping a role for the independent agent as the PPACA (aka health care reform) moves forward. Check this short article out.

Makes sense if you think about it. People generally don’t understand health insurance now, and every other day there are new things coming to light with the new health care reform bill. Someone needs to explain it and help people make decisions. So does it make sense to create another government bureaucracy from scratch, hire all those people who require desk space and benefits? Or go with the independent agent structure where we don’t make anything unless we do something for someone. And no one has to give us benefits necessarily.

Of course I’m biased as an agent. I have a business that fits well with the So Cal lifestyle. I can work 6 hours a day, or 12 as needed. As new employer regulations come in, employers are going to need a resource still. Someone that will go to bat for them when there’s a problem, because they are running their own business. And everyone needs help decoding their explanations of benefits.

Between massive egg recalls and Dr. Laura quitting radio, there’s just TOO much to keep track of! You’ll want to keep us around…..

July 14th the announcement was made by the White House as to what those services are–click here for what is the current comprehensive list:
Covered Services

These services as of September 23, 2010 are to be covered without ‘cost sharing’–before the deductible has been met; no co-pays, no co-insurance. But predominantly on ‘new’ plans. Some of the existing plans will adopt these provisions.

So is this a good thing? People can’t afford to pay for these services so they don’t obtain them in theory. My biggest concern is that we are about to see the ‘Affordable’ go out of the Affordable Care Act. Think about it–these are not ‘free’ services, since someone is going to want to be paid to do them. They are free to you, but they aren’t free.

I’m not being a grinch about this, just a realist. Insurance carriers are going to have to pay someone to do these. And someone’s going to have to pay the insurance companies. Three guesses who that is…..

So IF you have preventive services you need done, check the list above. If you can wait, you might save some money if you do them after September. IF your plan works that way. IF they’re a covered service. IF there isn’t some other question that didn’t get answered on the White House call yesterday.

Don’t want to be a downer, but there are SO many questions that haven’t even been asked yet, let alone answered, just please tread carefully. And stay tuned.

Now, before you go as nuts as a Jet Blue flight attendant (gotta love that guy!) think about doing something sooner rather than later. Right now, we know what the plans are and we know what the rates are. Anthem currently offers a 12 month rate guarantee, so whatever you enroll in now, you will maintain that rate for 12 months. Since we don’t know what is coming, I’d vote for a bird in the hand.

Carriers are going to be required to include certain benefits and that will probably raise rates. And it’s not only going to be Anthem, all carriers are most likely going to be doing something in order to comply with the new law. This is just the first we are really hearing about it. Why am I fairly sure rates will go up? Two things in particular–people under age 19 will no longer have pre-existing conditions held against them, and there will no longer be annual or life time maximums allowed on plans. The latter frankly won’t have a huge affect overall. Most plans in California have anywhere from a $3-$7 million life time maximum, which the vast majority of us will never come near. But, it will be a reason to increase rates in anticipation. The scarier part will be what happens when they have to take all applicants.

Basically, this is just the beginning of sweeping change. We’re trying to keep up, but since so much of this was not worked out at the time the bills were passed, and still hasn’t been, it’s time to hang tight and hope for the best.
A light humorous look at health care reform

Other things to consider when opening an HSA:

* Once account or two? Well, only one name can go on the account. For a married couple or domestic partners, once account may be okay. But if both are over age 55, and they are both on an HSA eligible plan, consider opening separate accounts. The reason is after age 55, people can deposit an extra $1000 per year on top of the $3050 maximum for 2010. If you only have one account, only the person on the account can do that, so consider talking to your tax professional for the best route. I don’t consider an HSA the first place to put money, but if you’ve maxed out all your other pre-tax options and you are looking for another place to put some money that can grow tax FREE, this can be an option.
* Fees–You really have to look at this. If you are like most people and you don’t want to dump a large amount in right off the bat, fees of $3-$10 a month will eat into your principle. Many accounts offer low or no monthly fees. You also want to look and make certain there are no ‘per transaction’ fees.
* Investment options–As your account grows, hopefully, because you’ve been able to put money in it and not had sizable expenses, some people want their money to get some growth. Many accounts offer mutual funds after you reach a certain balance. But be sure you aren’t gambling with the rent money, so to speak.

So these are the main things people have questions about, or don’t know to ask. Many banks, credit unions and others are now offering HSAs. You can go to your regular bank but again, look at the fees in particular. If you want to see what’s available, go to HSAFinder.com. This web site is like a central repository that lists many entities that offer HSAs, and I go there regularly to look.

Remember, an HSA is like most other accounts, in that you can transfer it to another HSA if you find better rates. Just don’t have the old agency give you the check to redeposit, as that might trigger fines and penalties you shouldn’t have to pay.

One last thing–Happy Birthday Mr. Obama–talk about a lonely job right now!

But the reason you have an HSA usually is for the fact that the money you put into the HSA is tax deductible. if you had a sizable expense, wouldn’t you like to be able to maximize the tax benefit? Here’s something most people miss. First, what most people do know is that in order to have an HSA, you have to have a qualified high deductible health plan. Once you have that approval or enrollment, then you can open the HSA.

Here’s what catches most people off guard though. There are different ways to fund your HSA, either by putting a full contribution in, maybe electronic fund transfer of a couple hundred a month or my personal favorite, I’ll anticipate an upcoming expense, approximate what it will cost and deposit that amount. But if you have an expense that catches you with a low balance in your HSA, you can pay for it in a regular way, credit card or check and reimburse yourself.

But to legitimately pay for an expense out of your HSA by any of the aforementioned ways, the account MUST be established prior to incurring the expense. Most people don’t know that, they think it just has to happen after you have the health plan. This basically is an honor system, meaning that generally no one is looking over your shoulder on this but if you faced an IRS audit, you do need to keep your receipts for expenses and you’ll potentially need to prove that the medical issue occurred after the HSA was established.

That’s why I tell my clients who are wavering as to whether or not they want to establish the HSA to open one as soon as you are eligible, then just put some nominal amount in it. That way you can add to it later in case something major happens. This came to light when one of my clients called and asked me where again to open their HSA. The husband had an emergency, they were going to open the HSA, drop the maximum amount into it and pay the hospital bill. Unfortunately, that wasn’t going to work.

So set up your account. Lots of banks, credit unions and others offer them. For a nice clearing house web site that lists who is offering them, go to www.hsafinder.com. But be sure to verify the details on the account, because sometimes this site misses a couple of things.

NEXT–tips on what to look for when you set up your HSA

I heard her speak at a forum earlier this year in Woodland Hills, and she seemed like a very nice, nose to the grindstone kind of person. In asking my account rep at Anthem about here, he commented that people would be surprised at how geared toward a desire to provide a more universal type of health care she was.

Let’s face it, NO ONE was going to win in the position she was in. She did diversify the product portfolio considerably in her time there, which makes me wish some of the other carriers would do a bit of that too. While overall I like what they’ve done, I like to have more than one carrier to chose from and when their pricing beats everyone out overall, there’s not a lot to suggest outside of Anthem. People these days have to watch their budgets. I regularly have account execs tell me I should be selling on the benefits of a plan, not just the price. I do that to an extent, but if you have two similar plans, one $100/month less than the other, that’s usually the only benefit most folks want to look at. And I can’t blame them.

I hope Ms. Margolin does well at her new job, and would love to pick her brain one of these days on this whole mess!

This article lists estimates of needing 16,000+ IRS agents to enforce this eventually. The Congressional Budget Office is estimating the cost at $5-10 billion to administer this. And that’s just the start.

My concern along with other agents in California is the price tag on all the changes. Even though people aren’t happy with rates in LA and Ventura counties, you are definitely paying less than places like Massachussettes, New York and New Jersey. And now that you are looking at eventually subsidizing people, not excluding for pre-existing conditions, rates will soar. But the IRS can’t apparently enforce these new provisions in the law.

For example–30 year old male in New York City, hospital only plan would run $176/month. No deductible, but no coverage for office visits, most outpatient care or prescriptions. Which is more of what a 30 year old would need. You could get something comparable in the SFV area for $78-99/month, but there would be a deductible.

The same 30 year old, wanting a more comprehensive plan, opts for a $2000 deductible, $30 office visits, 80/20 coverage, sounds great right? Are you willing to pay $529.06/month for that? That’s a real figure for the 10009 zip code. I can find $2500 deductible, 70/30 plans with three office visits per year with generic and brand coverage for $111/month.

So you might want to look for coverage now, while it’s affordable in California. No one really knows what will happen once all this starts to kick in. Pretty scary!

Twisting– This is a term you hear more in life insurance but it can apply to health insurance as well. This is where an agent gets you to drop a policy, or replace a policy, that doesn’t really need to be changed but it will generate a sale for them. The times to change a policy would be:

* rates have gone up
* your needs have changed–maybe you need less coverage, maybe you need more
* a health condition you once had has changed or gone away and you had previously received an above standard rate. Sometimes you don’t need to change carriers, but sometimes it ends up being easier.

The other thing you want to avoid at all costs is the Rescission of a policy. Insurance companies are within their rights to rescind coverage if you have lied or misrepresented facts on an application. What will happen usually is they will refund any premium paid minus any expenses they paid out. So if you bought health insurance, ‘fibbed,’ had an expensive bout of care thinking you’d just drop the coverage later, think again. Not only will you be on the hook for the costs but you also risk criminal prosecution for insurance fraud.

These days insurance carriers are running a bit scared due to all the health care reform changes coming up. And I had a rescission happen to me. Dealt with the party entirely over the phone (which is not unusual with health insurance) and thought all was well and good. A few months later the carrier called me about this person, asked me some questions, saying there was something ‘pre-existing’ with this person that wasn’t on the application.The policy ended up being rescinded, and I have no idea about the associated costs, but turns out my client had gone through inpatient rehab, which certainly isn’t cheap!

The irony was I was told I couldn’t have any information on what the situation was that flagged this due to privacy protection. But I was copied on the rescission letter, and it cited the reason for rescission was this person’s ‘recent care’ at a drug rehab facility that was named in this letter–so much for confidentiality!

So in short, if you don’t think you need any changes, don’t be pressured into it. And if you do fill out an application, play it straight; it’s not worth the angst of losing coverage you need. And a second opinion from another agent should be considered if you are concerned about what you are being told.

Have a great weekend!

Now here’s a commentary on why the bill was bad for small business, and a very eloquent one at that. The National Federation of Independent Business’s (NFIB) president, Dan Danner, points out some very strong points as to why small business is going to get very little help through this, but the government will gain a fair amount in taxes.

Here is one of the worst points:

“This law is death by a thousand cuts for small business owners. According to the Congressional Budget Office (CBO), the overhaul will cost about $115 billion more than first projected, bringing the total to more than $1 trillion. Small businesses will also now have to deal with an onslaught of new taxes and burdensome paperwork.”

So basically, in California, we’re already taxed into oblivion seemingly, so this isn’t going to help. Rather than repeat his points, PLEASE click on this link and read. Almost better than the article itself, click on the tabs for ‘Comments.’

Not many people want to see folks go without health care, certainly including me, but I’d like to see them have jobs too. Having a job means an income, which means food and other basic necessities. This will only hasten the demise of local and small businesses that are the lifeblood of the economy rebounding. This may not seem like an ‘insurance’ related article, but kill off small business, you kill off the economy. Kill off the economy, and there’s no tax money to fuel your benevolent attempt at reform. So no improvement in the ‘health care’ situation. No, I don’t have the answer, but I know this isn’t it. Because with all of this, people aren’t going to be buying health insurance, that’s for sure!

You can’t pay for health care or insurance if there’s no money in California. Remember the phrase after NAFTA passed, ‘that sucking sound you hear is jobs moving south of the border?’ Now that sucking sound is jobs moving to Oregon, Arizona and Nevada. Along with their tax revenue!