Quick Guide to Health Insurance

by California_Health_Insurance on July 30, 2009


Understanding Health Insurance and all of your options is not easy.  Here is an abridged guide to getting the best health insurance coverage for you at the most affordable prices.  


We are here to help you take control over your health care costs.



Take advantage of your employer plan

If you are insured through your employer, be sure to review your coverage every year when your company holds open enrollment, learning more about your plan never hurt anyone.   (Please see our post about “9 keys to choosing the right health plan.”)


It’s possible that you may have to choose between several types of providers.  Don’t view this as a problem, but an advantage.  You can compare plans and single out the one that offers you access to the best quality care.  Also, pay close attention to what the plan does and DOES NOT cover, this can give you a clue as to what type of payments you may be facing if an emergency were to strike.  Compare co-payments, deductibles, prescription coverage, out-of-pocket expenses , and lifetime maximum benefits. (See “When your health plan won’t pay.”)


Remember: A plan with higher premiums and lower co-pays are better for people with health problems.  


With a flexible spending account you can pay out-of-poscket expenses with pretax dollars, this means that the government will pay for as much as a third of your medical bills. However, you will lose what you don’t spend in that calendar year (but employers can extend the deadline to mid-March in certain cases) plus you can take this even if you change jobs.  Bonus.  






Many companies offer employee incentives employee incentives.  This can help you lower your health insurance premiums simply by quitting smoking, losing weight and/or exercising more.  Remember your employer’s health insurance plan CANNOT force you to pay higher premiums, than others, or drop your coverage if you develop health problems in the future.  


Cheaper and More Affordable Ways to Buy Health Insurance Yourself

Instead of paying high out-of-pocket fees, another option is the health savings account. An HSA is a possibility for those who buy high-deductible health insurance policies on your own or through your place of work. (See “Get cheaper medical coverage — with a tax break.”) However, not all plans with high-deductibles can be partnered with HSA’s.


In 2008, the IRS allows a maximum Heath Savings Account (HSA) contribution of $2,900 for indivicuals and $5,800 for families.  This payment is either pretax or deductible and you don’t even have to itemize.  Bonus: All earnings and withdrawals for medical expenses are free of tax, that’s right tax-free.  


With an HSA, your money is invested, unlike in a flexible spending account, and all the money you do not spend rolls over to the next year.  Plus, if you were to change jobs, you can take the account with you.  


Use Health-InsuranceCalifornia.com to find insurance that qualifies as high-deductible under IRS regulations.


You are allowed to make contributions until age 65.  After age 65, you can make taxable withdrawals for any purpose you wish.  


In Between Jobs and Without Insurance?

The most important thing when you are in between jobs, is to not allows your insurance coverage to lapse.  All of those great federal laws that are there to protect our access to insurance does not apply if you have gone 63 days without coverage (number of days differs by state). 


COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, allows you to continue group coverage after your job ends, generally for 18months, but you’ll pay the entire premium. Know your rights under federal law and state law.

You can buy yourself more time to use the money, by continuing to contribute to your flex account under COBRA.


COBRA, and other health insurance premiums, can be paid by using your HSA as long are you are receiving unemployment compensation.


Often, you can make penalty-free withdrawals from an IRA to pay premiums if you are no longer employed, but not always.  


It is very important to enroll in your employer’s health plan as soon as you can after beginning a new job.  Under the Health Insurance Portability and Accountability Act (HIPAA), no one can be denied coverage for a pre-existing condition (excluding pregnancy) for more than 12 months (time differs by state) or 18 months for those who enroll late.  The time is then reduced by the amount o time you were insured, previously, without a 63-day break in coverage.  


Getting Personal Health Insurance


If your employer does not offer health insurance coverage, or you are self-employed, contact Lesley at Health-InsuranceCalifornia.com to discuss all of your options. 


Availability, coverage and cost of health insurance differ by state.  Please check with your state insurance department in order to learn more about your specific area and the Web site of the National Committee for Quality Assurance.


HIPAA, the Health Insurance Portability and Accountability Act states that a private insurer cannot deny insurance or exclude coverage for pre-existing conditions if you had coverage for that condition with your pevious policy for at least 18months without a 63-day break most resently with a group plan. The can also not deny you if you have exhausted or are ineligible for COBRA and are also not eligible for government-sponsored or group plans.  However HIPAA rules vary by state.


In many state laws, those who meet the guidelines of HIPAA and are unable to find affordable coverage because of pre-existing medical conditions are placed in high-risk pools.  There is a cap on pool premiums, set by many states, usually between 125% and 200% of the market rate.  


At age 65, Medicare goes into affect.  Although, Medicare will be there, people should plan on spending $107,000 for out-of-pocket medical expenses while in retirement, however this estimate does not include long-term care.


Remember that even though your company may, now, offers their retirees health insurance, this may not be an option by the time your retire.  (See “Don’t bet on your retiree health care.”)


You should anticipate and plan on Medicare premiums going up.  By law, 25% of Meicare’s costs must be covered by your premiums.  


50% of the people that are on Medicare also buy Medigap supplemental insurance or Medicare select which is a less expensive alternative.  


Check out the Medicare site about prescription coverage and filling a gap in the coverage. Help is available to pay for medications.


Many older individuals find they need nursing-home care.  Long-term-care insurance with inflation protection is a smart uy in your 50’s, when premiums are lower.  (See “No long-term-care insurance? Uh-oh.”)


Believe it or not, more than 46 million people in the United State have no health insurance.  However, there is help available.  Please contact us at www.health-insurancecalifornia.com with any questions you may have. We will help you find the right plan for you.   (See “A survival guide for the uninsured.”)


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