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Tips to Save Money on Health Insurance Plan Costs

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medical

The health insurance plans are the costliest to purchase, and the rates keep on increasing. Here we bring you the best tips that you can use to cut down the cost on your health insurance. These tips will not only give you the solutions to find the best health insurance but also manage your money better.

Shop around

You can get the best healthcare programs if you do your research properly. You can compare multiple plans before you decide on paying for one. There are several benefits that a healthcare plan can offer, and each plan differs from the other in some way. It is similar to purchasing a car and looking at its pros and cons before deciding on one.

Opt for a higher deductible

Choosing a high-deductible plan can be risky as it can cost a lot from your pocket in case of sudden catastrophy. But if you keep yourself healthy and do not have to visit the doctory every month, you can increase your deductible in exchange for a lower premium which can save you a lot of money.

Use a health savings account (HSA)

health-savings-account

Your health savings account can actually make your health insurance more affordable and save you money on your taxes. You can even withdraw the HAS without paying taxes. Regular savings can help in paying on the day of insurance without the worry of tax break.

Choose the right medical care

Hospitals can be a great take away for your bank account. In case of emergencies, the nearest hospitals can cost you a lot of money. But for checkups and treatments, you can choose from more affordable options. You will need a little research to find the right hospital or clinic, but it will only help in in bigger savings in future.

Enroll in a wellness incentive

employee wellness

Do not miss on your healthcare incentives offered by your workspace. You may feel like it does not fulfil your present needs, but actually, it can cover your medical expenses in the future, which can save you money that you can spend on other things. You can join wellness incentive programs offered in your community to  get the benefits of free medical checkups and treatments.

Pay at the right time

If you feel that you can pay your installments later, you are actually making a mistake as an emergency can make you pay more on the interests. You could be missing out on your savings if you think of paying all of a sudden.

Think twice before agreeing to tests

Most of the time, the doctors suggest to take up tests which are meant to check if your body is functioning properly. This include lab tests, X-rays, CT scans, or MRI scans. Although these tests are not necessary, sometimes doctors will insist you to take them just to be sure that you are not suffering from anything. It might seem like a good idea, but most of the time, you do not need a diagnosis if you are not dealing with any problem.

Health Insurance Refunds – Your Questions Answered

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Health Insurance

The Basics

First of all, in order to be eligible for a rebate you have to be enrolled in an individual, small group, or large group private health insurance plan. Talk to your insurance provider or your employer’s HR department in order to determine what kind of plan you have.

Customers are given refunds when their private insurance company spends too much money on average on overhead and profits and not enough money paying medical bills. If you have a small group or individual plan the company can only spend 20 percent of premiums on administrative expenses. If you have a large group plan, the ratio is even less, with employers only allowed to spend 15 percent of premiums on administrative overhead.

In six states, (North Carolina, New Hampshire, Nevada, Maine, Georgia, Kentucky, and Iowa) insurers are allowed to meet a slightly lower medical loss ratio in order to keep from destabilizing those insurance markets.

When did this new law go into effect?

This new requirement was created by the Affordable Care Act (ACA), the new health care law. This new rule took effect in January 2011 so this is the first year that rebates are being paid. Rebates paid this summer are based on health insurance you had in 2011. Although insurance companies may have spent more than 20% of premiums on overhead in years prior to 2011, they do not owe refunds for those years.

What about Medicare?

Traditional Medicare parts A & B operate very efficiently spending just 3 percent on overhead, therefore Medicare is not subject to the new refund rule.

Medicare supplemental plans (AKA Medigap) must meet a medical loss ratio of 65 percent for the individual market and 75 percent for the group market. These plans are required to give rebates as well, but in recent years Medigap plans have spent over 80% of premiums on medical care on average.

Beginning in 2014, all Medicare Advantage plans will be required to maintain an MLR of at least 85%. Plans that do not maintain at least an 85% MLR will be required to refund the federal government for wasting tax-payer funds. Medicare Advantage plans that miss the requirement for three or more consecutive years must stop accepting new enrollees. Plans that fail to meet the requirement for five years will no longer be allowed to operate.

Stand-alone Medicare Part D plans (those not included as part of a Medicare Advantage plan) are not subject to a medical loss ratio requirement.

What about other public programs?

Some states have medical loss ratio requirements for Medicaid & Children’s Health Insurance Program (CHIP) when the state uses an insurance company to serve Medicaid enrollees. More information is available here.

Beneficiaries of the Veteran’s Affairs health care system and TRICARE will not receive refunds from the new requirement.

Rate Review Proving Effective At Holding Insurance Companies Accountable

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Insurance Companies

Yesterday the Department of Health and Human Services (HHS) added to the list of benefits we’re already seeing from the Affordable Care Act (ACA), better known as the new healthcare law, announcing that premium increases in nine states have been deemed “unreasonable” after a review by independent experts.

The ACA’s rate review program posts all double-digit increases online, along with the insurance company’s justification and the state or federal decision on whether the increase is reasonable. So far, 186 increases affecting more than 1.3 million people have been posted for public scrutiny.

HHS also released a report showing the effects of the rate review program to date. After just 6 months, fewer insurance companies are requesting double-digit rate hikes, and in many states, “consumers are seeing rate increases slow-down or disappear altogether.”

Several states have also invoked their power to limit excessive rate increases, and many have used assistance from the healthcare reform law to strengthen their own review processes. These kinds of results show that transparency in the health insurance marketplace helps hold insurance companies accountable.

As the Supreme Court prepares to hear arguments on the ACA’s constitutionality, Consumers Union remains committed to making sure consumers have clear and useful information about the health law. Our new guide released this week, The Affordable Care Act: What you and your family need to know, is a great way to make sure you’re getting the facts.

HHS Preserves September Start Date For New Easy-To-Read Insurance Summaries

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HHS Preserves

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Posted by Lynn Quincy in Better Consumer Information | No Comments »
Late last week, the Departments of Health & Human Services (HHS), Labor and Treasury released a Frequently Asked Questions (FAQ) document on the Summary of Benefits and Coverage (SBC), the new, consumer friendly health insurance summary established by the Affordable Care Act.

Consumers will see the SBC for the first time when they shop for coverage or renew their coverage beginning in late September. Over 150 million consumers are expected to benefit from this form – everyone in private coverage, plus state and local government employees with employer-based coverage. In consumer testing, consumers found the new form easier to use than traditional health plan materials.

There are four elements of the FAQ worth highlighting:

First off, we’ve heard that some insurers and large employers were strongly urging policymakers to delay or weaken the SBC. However the Administration kept the September 2012 start date for this important new tool, preserving a major victory for consumers.

Second, insurers will not have to provide the form to their “closed blocks of business” – policies that can be renewed but are no longer sold to new customers – until late 2013. Unfortunately, it’s unclear how many consumers are affected by this rule. The rationale is that many consumers in these policies can’t actively “shop” for coverage due to pre-existing medical conditions that cause other insurers to turn them down. But in a few “guaranteed issue” states insurers aren’t allowed to deny coverage because of your health status and furthermore, the SBC is important for all consumers because it helps them understand the coverage they currently have, even if they aren’t comparison shopping. ConsumersUnionbelieves insurers should estimate the number of affected consumers and provide the form to these policyholders on a voluntary basis.

Third, if an employer provides coverage using more than one vendor – for example “carving out” prescription drug or “mental health” coverage to a second insurer – consumers may see more than one SBC. This may cause consumer confusion because one of their forms may say “prescription drugs not covered” while the other describes the prescription drug coverage that is available. Fortunately, this will only last for one year. Starting in late 2013, a plan administrator that uses insurance products provided by separate insurance companies must combine the information into a single SBC.

Fourth, the Departments will develop a temporary calculator that insurance companies can use to complete the “Coverage Examples” section of the SBC for the first year. Coverage examples, a much-liked feature of the summary, show consumers what the plan would pay for a specific medical scenario such as maternity or diabetes care. But the FAQ described this forthcoming calculator, as “streamlined” and hence “less accurate.” Consumers need the most exact information possible for Coverage Examples to be useful therefore we strongly urge health insurers to provide the most accurate coverage estimates possible, and avoid using the less accurate calculator estimate.

New Data Confirms Earlier Estimates

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Over $1 Billion In Consumer Insurance Rebates Coming Soon

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Today the Kaiser Family Foundation, a non-partisan group that covers health care issues, released a new report summarizing national and state level data of estimated insurance refunds coming soon for millions of Americans.

The report shows that insurers will owe an estimated $1.3 billion in rebates by August 1, 2012 because insurers failed to spend 80% of premiums on actual health care for people purchasing policies on their own and small businesses, or 85% for large employers.

We’ve been digging into this same data to see how major state insurers are reacting to the new law enacted as part of the Affordable Care Act, better known as “Obamacare”. We found that insurers are preparing for millions in rebates and in some cases low value carriers have made major improvements in how they spend consumer premiums. Here are a just a few key examples:

Blue Cross Blue Shield of Arizona, the state’s largest insurer, foresees rebates of $3.2 million to small business customers and $8.7 million to individual policyholders.
The small businesses inFloridacovered by Blue Cross Blue Shield of Florida can expect an estimated $44.9 million in rebates.
Nationally, United Healthcare’s Golden Rule Insurance Company spent more than 35 percent of individual policyholder premiums on administrative costs and profits in 2010. But due to the new rule they’ve improved that figure to just over 21 percent in 2011.
Bills currently pending in Congress would alter the medical loss ratio formula causing a loss of an estimated $900 million in consumer rebates. We’ve opposed these bills as a bad deal for consumers and a giveaway to insurance companies.

New Healthcare Law Rule Working To Lower Premiums

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Law Rule

It’s been hard economic times for most American families the last few years. But it’s a different story for big insurance companies.

The most recent example comes from Health Care Services Corporation (HCSC), which exceeded $1 billion in net income for the second straight year. HCSC is the parent company of Blue Cross Blue Shield plans in Illinois, Texas, Oklahoma, and New Mexico.

As we showed in a report released almost 2 years ago, HCSC has a pattern of hiking annual premiums significantly – some as much as 20% – even as it adds billions of dollars to its already excessive surplus funds:

In Illinois, the company filed for rate increases of 10.2% in 2007, 18% in 2008, and 8.4% in 2009 for some customers… At the time of these increases, HCSC’s surplus grew from $6.1 billion in 2007 to $6.7 billion in 2009, up from $4.3 billion just four years earlier in 2005. The company’s surplus is five times the minimum required for solvency protection.

Thanks to the Affordable Care Act, though, relief is in sight for many of these Blue Cross customers. Due to a new provision called the Medical Loss Ratio, insurance companies must spend 80% of the health care dollars they collect on medical bills. Those that spend excessively on administrative overhead or profits must refund their policyholders.

According to its financial statements, HCSC has set aside over $88 million dollars in rebates for its individual and small-group policyholders due this summer. Even more important, the company’s chief financial officer has acknowledged that the MLR rule is causing HCSC to lower its future rates.

Consumers Union has fought hard to make sure the MLR is fully implemented, and with your help we’ve scored some important victories. Unfortunately, insurance lobbyists are trying to weaken the new provision and take away hundreds of millions of dollars in rebates from millions of health insurance consumers.

Don’t let them! Use our form to send an email now to your member of Congress to stand with Americans struggling with skyrocketing health insurance rates. Together we can hold insurance companies accountable.

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