Health Insurance costs continue to rise. The recent national debate on health insurance was ostensibly to lower costs. Many in the industry spoke loud that the proposals being put forward would raise premiums faster than ever before.

Even though the full impact of this is not yet felt, underlying pressure on costs has begun in earnest. One major insurer is sending out notices that include information like this:

Despite our efforts, the cost of care continues to increase dramatically. Factors fueling costs include:

1. Increased use of new medical technologies.
2. Higher prescription drug costs.
3. Pressure on health insurance plans and the private sector to absorb higher costs as funding for public programs like Medicare and Medicaid decreases.

The average increase is a whopping 17.6 percent for PPO insurance plans! The increase applies to both open and closed insurance plans. Insureds of all ages and across all regions and tiers will see an increase unless they are currently in a rate guarantee period.

What can you do about this? Well, neither you or I can change the decisions being made as individuals. However, as individuals – we can change what we pay for.

I have for a long time advocated Health Insurance Savings qualified health plans. I feel stronger than ever that this is a good choice for the majority of persons. I believe that putting a plan like this in place is the best way to cushion future rate increases. I can help you do this.

Recently I have found another good idea. This one works whether you are self-employed or an employee. It works wherever there is a high deductible medical plan. You can protect yourself, and your whole family against many risks by getting your own accident and/or critical (cancer, heart, etc) illness plan. These plans pay with either no deductible or a very small deductible. Either way they will help cushion you against health insurance plans with increasingly high deductibles.

In a word: No!

However, even though that is true, for many Accident Insurance provides them needed protection when Work Comp Insurance is simply not an option for them. Many self-employed individuals do opt out of Work Comp for themselves. Why do they choose to do this?

Its because 1) it is expensive and 2) it basically will not pay benefits for the owner. [These comments have to do with California]. So many wonder why they should pay for something that will not provide benefits.

With all the talk about health care combined with the fact that many are suffering from a lack of work – the self employed have to evaluate the best way to protect themselves. Many do not pay into Workers Compensation

But what is a self-employed construction worker or similar tradesman / woman to do? How does a person provide a reasonable amount of protection on themselves?

Here is a link for a reasonably priced accident plan. A person can combine this with a high deductible health insurance plan. This way a person can cover themselves, at least against medical costs, should they get injured while working, and still partially self-insure for sickness (for all of you who “don’t go to doctors”).

There is more to this that I would like to explain to you, as a person in this situation really should do more than what I’ve addressed in this blog and this blog does not address the whole picture.

However, this will get you started. Please call me if you have questions.

Michael Myers
209-390-1163

What can be done about it now?

There are five scenarios in which Medicare Advantage members may disenroll from their plan.

Scenario #1
If you are disenrolled from an MA plan because the plan is leaving Medicare, stops giving care in their area, or the customer moves out of the plan’s service area, you are eligible to change. Customers in this scenario are guaranteed issue of a Medicare Supplement plan A, B, C, F, HDF, K, or L that are sold in their state by any insurer.

Customers can apply for a Medicare Supplement as early as the day they receive notice that their MA coverage will end, but no later than 63 days after the MA coverage ends.

Scenario #2
You joined an MA Plan when you were first eligible for Medicare Part A at age 65, and within the first year of joining you may exercise your right to switch to Original Medicare. Customers in this scenario are guaranteed issue of any Medicare Supplement plan sold in their state by any insurer. Customers can apply for a Medicare Supplement as early as 60 days before the date their MA coverage will end, but no later than 63 days after the MA coverage ends.

Scenario #3
Or … you dropped a traditional Medicare Supplement to join Medicare Advantage for the first time, less than a year ago and you wish to switch back to Original Medicare. Customers in this scenario are guaranteed issue of the Medicare Supplement policy they had before they joined MA if the same insurance company they had before still sells it. If the former Medicare Supplement policy isn’t available, they can buy a Medicare Supplement plan A, B, C, F, HDF, K, or L sold in their state by any insurance company. Customers can apply for a Medicare Supplement as early as 60 days before the date their MA coverage will end, but no later than 63 days after the MA coverage ends.

Scenario #4
You have been with an Medicare Advantage plan for more than one year and are considering dis-enrolling and returning to original Medicare, and then purchasing a Medicare Supplement.

In most cases, an MA enrollee must stay enrolled for that calendar year starting the date their overage begins. According to Medicare, a customer who has been with an MA plan for more than one year may disenroll if Medicare has made a determination that a Medicare Advantage organization materially misrepresented plan provisions or violated its agreement with the enrollee. Customers in this scenario are guaranteed issue of Medicare Supplements A, B, C, F, HDF, K, and L that is sold in their state by any insurance company. [This one is tough to do].

Scenario #5
If you dis-enroll from Medicare Advantage, having been on Medicare Advantage MORE THAN one year and are not in Scenario 4, you are NOT guaranteed issue. This simply means that your application will be medically underwritten. You may or may not qualify, but this is something I will likely be able to tell you at the time of application.

I have been helping people with Medicare Supplements since the early 1980′s. In almost all cases, I prefer my clients to be with original Medicare and purchase a Medicare Supplement. I believe that, in the long run, this is the most cost effective decision. It certainly is the decision with the most stability.

Call me anytime if you have questions, or if I can assist you in any way.

Michael

If you have recently been laid off, you may have been offered COBRA. COBRA provides insurance while a person is in between jobs. If you can afford it, you should purchase your COBRA offering, or buy permanent individual health insurance (I can help you with this).

However, if you cannot afford to pay for COBRA, and you are reasonably healthy and believe you will have group health insurance again, you might consider purchasing the “Cobra Alternative”, otherwise known as temporary health insurance. This will in almost all cases be less expensive.

Here is my link to price this for yourself (when you get to the page, look on the right side of the page) …

Michael

I have talked some about becoming your own banker. This is called The Infinite Banking Concept. This concept requires a shift in mindset. This is because we have all been conditioned to borrowing money. But think about the advantages, 1) no debt, 2) money for retirement, 3) an automatic (and growing) estate, 4) a real retirement without the higher taxes we all expect and 5) and a person saves a LOT of money.

So the concept goes like this: a person has paid off personal debt using this concept. They now purchase their automobiles/trucks using this concept, and yet the money continues to grow. What now?

Now they are in position to take it to the next level. Many things they could do, but one idea is to lease equipment to their own corporation. The equipment is in their personal name, and they reap a profit from their corporation from the interest built into the lease.

There a lots of scenarios like this. But the first step is learning how to get started. That’s what I am here for.

Call me and let me show you how this concept can work for you.

Michael P Myers
209-390-1163

With recent rate hikes on individual and group insurance plans, many experts are recommending that consumers shop around as many commonly do with auto insurance. For instance, California Insurance Commissioner Steve Poizner, in a recent statement said,

“As a consumer you need to shop around. A different provider may prove to be a better value for a particular individual or family’s needs, and all of them are looking for new customers. I encourage consumers who are not happy with their rates, co-pays, benefits or service to look at other options.”, says Poizner.

Honest, consumer based evaluation of health plans and carriers are really the need of the hour. We think that this is the role that the insurance intermediary should volunteer to take up. In fact, this is exactly what we have been doing for some time now.

Most people find insurance confusing. I am here to help. My only preference in insurers is the one that will fill your need and circumstances best. This is why I offer the selection of companies I offer.

Whether the need is group insurance, individual/family plans or Senior health plans (Medigap), I save people money with my “Solutions That Work”.

So if you do not have insurance and need it, or if you have it and think it’s too high, call me. I can help.

Call me at 209-390-1163 or 866-301-9652.

Michael Myers

Do you know what the potential difference is in spendable income during one’s retirement depending on whether a person has used a bank CD, a 401K, an annuity from an insurance company or even life insurance?

What about the difference between paying taxes now on a small amount saved and not paying later on a large amount saved, or not paying taxes now on a small amount saved and paying ever higher taxes on the larger amount that one ends up with?

Let me be succinct: it’s huge! May I encourage you to take a few minutes and allow me to show you how a little planning now can reap huge rewards later?

Is your retirement money in the hands of your stock broker or otherwise dependent on the stock market? I’d like you to consider this …

The amount of risk the stock market poses is not static. When you select a portfolio that represents a certain amount of risk which should be in line with your risk tolerance, you must be very careful. Why? Because the external forces that move the market are constantly changing, resulting in less or more pressure on the market to move either up or down.

Currently, the pressure that is mounting like a volcanic eruption waiting to happen is putting great downward pressure on the U.S. stock market. One may say, “Well, I’m quite risk tolerant; and if the market goes down like it did in 2007, I can ride it out and I’ll be okay.” This position would have to assume that the market would recover to the previous levels of today in a reasonable timeframe of, let’s say, a few years.

Let me show you why I believe people in the market today are taking on a lot more risk than they realize.

First, remember that back in October 2007 prior to the most recent market meltdown, the Dow was at 14,000 points. If today, the summer of 2010, represents the near pinnacle of the current recovery, then you still would have nowhere near the amount of investable assets your accounts represented in 2007 — for several reasons, the most obvious being that the Dow is not at 14,000 points but at 10,000.

Second, when the market drops by 50% on your $100,000, taking it to $50,000, you need not a 50% gain, but a 100% gain just to break even. For both of these reasons you are not at your 2007 levels now; but let’s consider another phenomenon that you may not have thought of.

When bubbles burst like the real estate market and stock markets did in 2007, they don’t re-inflate to their previous levels for a long period of time, typically 20 years or longer. Consider Japan, whose own stock index, the Nikkei, sat at 38,000 points in 1990 and today, 20 years later, is still at 10,000 points. Do you think risk-tolerant Japanese investors who said, “I can stand large corrections should they occur; and I can even wait a long time to recover” had in mind that 20 years later they may still be worth only one-third of their 1990 account values?

Bill Gross, CEO of PIMCO, one of the world’s largest bond fund managers, has said history was made in October 2007 when the stock market fell because we may never again in our lifetimes see a Dow of 14,000 points. Why? Bubbles burst for a reason and don’t re-inflate for a very long time. The stock market bubble burst in 1929, ushering in the Great Depression; and investors were not made whole as a result of the market’s losses until 1954, 25 years later. I’m sure that when risk tolerance was explained to investors in 1928 they had no idea of the level of risk they were exposing their life savings to at the time, which was also true in Japan in 1989.

Mr. Gross has gone on to say that we are now living in the beginnings of a “new normal” – an extended period where prices are falling in a process of deleveraging and will not recover to previous levels. Instead, they will find a new normal that is supportable by a slower aging economy.

Remember that the Dow was at 14,000 points just 3½ years ago. Today it’s at 10,000. As we continue to adjust to the new normal, there are additional bubbles that have not yet burst that upon doing so will cause the market to drop further – not just drop lower but also stay lower for many years to come. I believe if you are in your 50’s or older you cannot afford to ride the market down this time because it’s not coming back for many years.

In my opinion, the bubbles that have yet to burst are the following: Bond bubble, dollar bubble, U.S. Government debt bubble and, eventually, a gold bubble.

If (or should I say when?) these bubbles burst, the Dow will fall to a new normal. That new sustainable level may be between 5,000 and 7,000. Famed economist Harry Dent believes the Dow could fall to 3,500. When the market has greater downward pressure than up and our country’s financial woes and demographics will keep it down, then the most critical strategy quickly becomes to protect what you already have while our nation and economy deleverages (defaults or pays down debt) and adjusts to the new normal.

We’ve been taught that over periods of ten years or more the market always goes up. Well, if that were ever true, it no longer is. Consider the Dow which stood at 7,487 on November 13, 1997 and then was again at 7,486 on March 18, 2009, almost 12 years later.

One of the reasons the stock market bubble will not re-inflate to 14,000 is to consider what pushed it there to begin with. The 77-million-strong baby boomers were in their prime spending years in the 1990s, on a spending spree the likes our country had never before experienced. All that demand created a supply shortage in housing and allowed companies of all types to raise prices, thus, driving our markets higher. Seventy percent of our GDP is made up of consumer spending. Now, here we are in 2010; and the baby boomers are 20 years older than in 1990. They are past their peak spending years. They are downsizing empty nesters that are fearful about the future and saving like never before.

When you recognize we are now in the new normal – which is still adjusting to new lower pricing – then you will realize the next time the market declines it’s not only not coming back to its current levels quickly, it may not come back in our lifetime. That adds up to risk that many do not realize they are taking.

My clients do not expose themselves to this type or risk. Lack of risk makes people happy. That’s why I have happy clients! (And what they earn on their retirement dollars, make them pretty happy too!)

You may think you can do better by taking on the risk of the market. Remember two things: First, what my clients earn each year is theirs. They don’t have to waste years making up for losses that can’t happen to begin with. Second, the Dow stood at 66 points in 1900 and at 11,497 by the year 2,000 – 100 years of performance that resulted in a 5.3% annual compounded return – not 10% or greater as some would think.