insurance

Health Insurance for Under $50 per Month?

/ L. M. Walker / 1 Comment

“If it sounds too good to be true, it usually is.” ~ Better Business Bureau

– By: Larry Walker, Jr. –

According to the U.S. Department of Health and Human Services (HHS), there are 7.2 million uninsured Americans ages 18 to 34 years, living in single-person households in 34 states. And, of that total, 2.9 million are eligible to buy health insurance on either federal or state partnership insurance marketplaces. And among those 2.9 million, 1.3 million, or 46%, could pay less than $50 a month for a “Bronze Plan”.

Hmmm. That sounds, well, too good to be true. Let’s see, 1.3 million times $50 equals $65 million per month, or $780 million per year. Sounds like a good deal… for insurers that is, since the balance of the monthly premium, perhaps another $50 or more, will be subsidized by taxpayers, and the risk of actually paying out any benefits, after high deductibles, co-payments and co-insurance levels are met, is next to nothing. What’s a Bronze Plan anyway, a worthless policy that covers nothing?

Generally speaking, the Bronze Plan is intended to have the lowest premium of the 4 new categories of plans (Bronze, Silver, Gold, and Platinum) but charge the highest out-of-pocket costs for healthcare services. For people without employer sponsored insurance, the Bronze plan is the minimum health insurance plan which satisfies the Affordable Care Act’s health insurance mandate.

What HHS doesn’t tell you is that Bronze Plans are designed so that policy owners wind up paying 40% or more of covered healthcare expenses in the form of out-of-pocket fees, and that’s over and above the cost of the plan’s monthly premium. Although out-of-pocket expenses for individuals are expected to be capped at $6,350, keep in mind that this amount is reset each calendar year.

Out-of-pocket expenses include fees like deductibles, copayments, and coinsurance. Different plans will approach the 40% or more that policy owner’s will pay in various ways, so it is important to research the financial details of a specific plan before deciding which one to purchase. For example, a person who has frequent medical expenses may want a Bronze Plan with a lower deductible, because they will be required to pay at least that much of their annual health care expenses – in full.

Look over the following examples of Bronze Plans, and then we’ll define the terms and discuss Example #2 in more detail.

Deductible – A deductible is the amount you pay for health care services before your health insurance begins to pay.

Coinsurance – Coinsurance is your share of the costs of a health care service. It’s usually figured as a percentage of the total charge for the service. You pay coinsurance after reaching your annual deductible.

Co-pay – A co-payment, or doctor’s visit fee, is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service. You may also have a co-payment when you get a prescription filled.

Example #2: Okay, so let’s say the New York Bronze Plan (shown above) costs a young person $50 per month. What will he or she receive in return for this premium?

Well, since the annual deductible is $3,000, that means the insurance company won’t pay out a solitary dime, until after the insured pays the first $3,000 in annual health care costs. Then, once this $3,000 annual deductible has been met, the policy only covers 50% of the cost of doctor’s visits (co-pay), and 50% of the cost of all other medical services (co-insurance). It’s not until the insured reaches the annual out-of-pocket limit of $6,350 that the policy kicks in and pays all remaining expenses in full.

I hate to break it to you, but this alleged, under $50 per month, health insurance policy will actually wind up costing the poor sucker who buys it around $3,600 per year ($3,000 deductible + $600 premiums), or $300 per month, before it pays out a single dime in benefits. It will cost even more for plans with higher deductibles, and may wind up costing as much as $6,950 per year ($6,350 annual limit on out-of-pocket expenses + $600 annual premiums), or $580 per month, if ever actually utilized for a substantial amount of qualifying health care expenses.

Then there’s the question of which expenses such a plan actually covers, if any, once its benefits do kick in. Who in the hell knows the answer to that? Since the government’s official website is lacking in detail, even when it’s working, apparently you have to buy it first, in order to find out. Yeah, just call the toll-free number and blindly sign up. I guess it’s better than nothing, although not by much in my opinion. On this earth you get what you pay for, but the cost of nothing is generally free.

The bottom line: Don’t expect much from a health insurance plan costing less than $50 per month. If it sounds too good to be true, it usually is.

References:

How do deductibles, coinsurance and copays work?

Insurance for the young could be less than $50 a month

Bronze Plan – Affordable Care Act (Obamacare)

Related:

The Social Security Bust Fund – Opt Me Out

#Obamacare

Homeowners Insurance Tops Inflation by 691%

/ L. M. Walker / 1 Comment

Caveat Emptor

– By: Larry Walker, II –

Have you checked your homeowner’s insurance policy lately?

I’ve been with the same insurer for over 10 years through two residences. Even with the previous company my homeowner’s rates stayed about the same from 1998 through 2007. During a recent review, I discovered that my basic coverage amounts (i.e. dwelling, private structures, personal property and loss of use) have been inflated by around 3.0% annually since 2007, or slightly higher than the general inflation rate, and although I sort of get that, albeit the cost to rebuild is now around 150 times current fair market value (ugh, don’t get me started), over the same time-frame, my insurance premiums (bundled with auto and other discounts) have grown by an annual average of 11.4%. What do you call that?

In fact, excluding additional discounts received in 2009 and 2010, which helped dampen the rate of growth, my premiums spiked by 17.5% in 2008, by another 16.8% in 2012, and finally by a backbreaking 20.4% this year. Had it not been for those additional discounts, my homeowner’s premiums would have averaged 18.2% over the period. Yet, even with a generous discount, my premiums have ballooned by 65.3% since 2007. Now compare that to inflation, which rose by just 13.7% during the same period (via Dollar Times).

So in other words, from 2007 to 2013, my homeowner’s premiums grew 377% faster than inflation. But don’t just take my word for it. A May 2013 article by the Associated Press (AP) confirms that homeowner’s insurance rates have spiked, however it fails to mention why? More specifically, why homeowner’s insurance premiums are currently advancing 691% faster than inflation.

Of course, the insurance industry blames increasing replacement costs (the cost of rebuilding a home from the ground up). Okay, great! But that only accounts for a 2% to 3% annual increase. So how does this translate into an average annual premium spike of 18.2%? According to the aforementioned AP article, which I might add is based on antiquated data, “Nationwide, an average homeowner paid $909 for homeowner’s insurance coverage in 2010, up 36 percent from 2003. Inflation rose 19 percent during the same period.” It goes on to provide a list of what homeowner’s in states bordering the Atlantic Ocean or Gulf of Mexico were paying in 2010.

Following are the average costs in five of those states, ranked by the percentage change from 2003 to 2010:

  1. Florida: $1,544, up 90.6 percent.

  2. Alabama: $1,050, up 54.2 percent.

  3. Mississippi: $1,217, up 53.5 percent.

  4. South Carolina: $997, up 48.4 percent.

  5. Georgia: $833, up 46.1 percent.

Now if the AP had continued its research through the current year, it would have discovered that the situation has gotten a lot worse since 2010, as I mentioned above. Here’s an idea for the media – next time, if you don’t know, why not try asking people who are actually affected? My premiums actually went up by 16.8% in 2012 and by another 20.4% this year, for a two-year average of 18.6%, while inflation averaged a mere 2.35%. So over the past two years, premiums have risen 691% faster than the rate of inflation ((18.6 – 2.35) / 2.35). What’s up with that?

It’s not the miniscule annual dollar increase that bothers me, but rather what the cost will be 10 or 20 years from now. At the current pace, by the time I reach what used to be considered retirement age, God willing, which is less than 20 years from now, homeowner’s premiums will be simply outrageous, perhaps more than 4 times the amounts shown above (i.e. doubling about every five years). In other words, if this doesn’t stop soon, I could be paying around $3,500 a year in retirement. I’m sorry, but this is just unacceptable.

So what did I do? I requested quotes from several local insurers. And what did I find? I received some quotes for less than half my current rate, some 30% to 40% lower, and others around the same. So I struck a deal which comes in at just 64% of the proposed renewal rate. That puts my new rate just 5.7% above what it was in 2006. Now that’s more like it. Perhaps I could have done better, but somewhere along the way I’ve learned that if it sounds too good to be true, it usually is.

The bottom line: Why have homeowner’s insurance rates spiked? As one of my Google+ friends put it, “Because they can get away with it.” Do yourself a favor; check your policy and take action while there’s still a free market (caveat emptor).

References:

Time to reassess your Homeowners Policy

How Homeowner Insurance Rates Have Spiked

Obama’s Big Lie at Today’s Rally: "Your Employer Would See Premiums Fall By As Much As 3000 Percent"

/ L. M. Walker / Leave a comment

Obamacare Rally in Strongsville, Ohio

March 15, 2010

“How many people are getting insurance through their jobs right now, raise your hands, a lot of those folk, your employer, it’s estimated would see premiums fall by as much as 3000 percent so they could give you a raise.”

More lies and desperation from Obama. He fools these poor suckers in Strongsville, Ohio into believing that under his health care plan, employer’s health insurance premiums will fall by as much as 3,000%. And they just soaked it up, until one of them fainted. Poor suckers.

I guess by the time Obama get’s done, we’ll all be getting paid to have health insurance. What a moron.

Just vote no today and we’ll settle it in November.

Kudos to: Hot Air Pundit, and Town Hall