The Lowdown on Health Insurance

Jargon and acronyms are one of the most annoyingly confusing aspects of a new job. Some of the terms you will need to remember will be specific to the company you are working for. While these will of course be important, you are likely to hear them so often, that you will absorb them simply through “osmosis”, but health insurance related terms are another matter, you may need to go out of your way to memorize them, and memorize them you must, because they could have bearing on your long term future. Having good health insurance is of the utmost importance in these times.

Some firms will offer a single health plan, while more progressive firms with more resources will often offer a few options. Whatever situation you find yourself in, you need to review your health plan or your health plan’s alternatives carefully, to maximize benefits.

On the off chance that you are self-employed, or the company you work for does not offer insurance, you really should look into enrolling yourself in a plan in your private capacity. Recent legislation has made private health care much more attractive to individual consumers.

Health insurance is a form of insurance you really don’t want to be without. While it may be tempting to use the money for more fun things, not having proper health insurance can leave you dead in the water when a health crisis does occur.

Health Insurance Facts
Health insurance companies are given discounted rates at virtually every well known hospital. They have the leverage to negotiate for such rates because of the number of plan holders they represent.

There are two basic types of health insurance companies: HMOs (health maintenance organizations) and PPOs (preferred provider organizations), they are both similar and different. Both setups give you access to a pool of doctors covering a variety of specializations. Both are given special discounted rates by hospitals, typically bigger companies are given more favorable rates, but as the consumer, this shouldn’t matter to you unless in means more affordable premiums.

Under the HMO setup, you are assigned to a primary care physician, your primary physician determines the direction of your treatment, and if additional specialists are required, the primary physician needs to make the call and the referral.

With PPOs you have more freedom to select physicians. It simply eliminates the need for a primary care physician; you are free to deal with specialists directly with no referrals. Specialists may also refer you to other specialists if they feel the need for it. Both setups have pros and cons.

While it is true that there are other types of health insurance providers, every available model closely resembles one of these two main types.

How to tailor fit your plan:
If you happen to be in a position to choose what sort of health coverage you get, you should try to tailor fit your plan to suit your needs. For instance if you are a young, reasonably healthy person, you may want a high deductible plan so that you can save money for other things. You may also already have relationships with certain doctors that you are comfortable with, if so, you should find out which health insurance companies they deal with. Some health insurance companies provide generous coverage, but not for those with “pre-existing” conditions. If you have such a condition, you should shop around for a provider that will accommodate you best.

Your circumstances are always unique, and when selecting a plan for yourself, you should consider everything that is relevant to your choice. With all the options available, customization possibilities are limitless, and making an objective choice is pretty clear cut.

What Exactly is an Insurance Premium?

An insurance premium is a calculation made by an insurance company based upon a specific business model or type of insurance that considers the likelihood of claims filed in order to properly price their products for purposes of generating profits. The calculation uses actuarial tables and methods to make assumptions and quantify associated risks. The process consists of underwriting and investment returns.

The underwriting process.
The first and most complicated determination of premium is derived from the underwriting process. This process involves the use of actuarial science that analyzes a wide assortment of data based on the product offered and the risk factors of the insured such as age, health. experience, education or other factors that are specifically related to the type of insurance offered. Insurers must determine the amount of risk that they are willing to assume and the price that they should charge. This computation also must take into account the probability of risks and overall exposures that the insurance company is willing to accommodate. An insured underwriting performance is measured by dividing claims and underwriting expenses by premiums. A ratio of 100% indicates a profit while anything over 100% indicates a loss. However, the inclusion of investment return discussed below will impact these ratios and can turn a loss into a profit. Nevertheless a ratio over 100% requires a good hard look at the underwriting assumptions.

The investment return.
The investment profits are based upon float which represents available reserves of money at hand that have been collected but not paid out as claims. These funds earn interest until they are needed. This represents an important aspect of the insurance premium computation.

Determination of profit for insurance premium computation.
The insurance business model for determining profitability and premium amounts is reduced to a simple formula, as follows: Profitability = collected premium + investment return – claims paid out – underwriting costs.

Final Determination of Insurance Premium.
Underwriting standards need to be constantly reviewed and adjusted. During periods of low interest rates, investment income may not offset losses from the underwriting ratio. Therefore, premiums and the amount of risk exposure that insurance companies are willing to accept may require an increase in premium as well as a reduction in the type of insurance product offered. For example, during the hurricane season in the U.S., many insurance companies lost a lot of money because the insurance premiums were too low.

How Motorcycle Insurance Rates are Determined

A variety of factors will strongly influence motorcycle insurance rates. Many riders worry about excessive insurance costs. There are ways to lower motorcycle insurance rates. Here, we’ll look at the major factors that affect motorcycle insurance premiums.

1.Type of Coverage
Almost all motorcyclists are required to purchase liability insurance, which will cover expenses in case they injure someone else. While liability insurance is fairly inexpensive, it’s much smarter to purchase collision or comprehensive insurance in addition to liability insurance.

2.Motorcycle Experience
First-time bikers will pay higher premiums than veterans. Insurance companies do lower rates for riders who have a lot of experience.

3.Geographical Location
Every state has different insurance regulations and requirements. Motorcyclists who live in urban areas will have to pay higher rates than motorcyclists who live in the country.

4.Age
If you’re an older biker, then you won’t pay significantly high premiums. As a young rider, expect to pay more premiums due to your lack of experience.

5.Driving History
If you’ve had to deal with traffic tickets or previous accidents, your insurance company will bill you more for monthly premiums.

6.Type of Motorcycle
Insurance companies tack on high premiums for those high powered sport motorcycles. Less expensive motorcycles will usually command lower premiums.

Remember, many insurance companies offer a variety of discounts on motorcycle insurance. You can save an amazing amount of money every year if you qualify for discounts. Here are a few common discounts offered by insurance companies:

-In regions where the climate is cold, some insurance companies offer a lay-up policy for the winter. In effect, this is a discount so that you don’t have to pay much insurance during the winter.

-Some companies offer low-mileage discounts for motorcyclists who only ride casually.

-Check with your insurance company about any anti-theft or security discounts. Many insurance companies will offer you a break if you install some sort of security system on your motorcycle.

-Some motorcycle groups and clubs have negotiated group rates with insurance companies. If you’re in a motorcycle group, then ask about these group rates.

-The majority of companies will offer multi-vehicle discounts. So, if you’ve insured a car or another vehicle with the same company, ask about these.

-If you take a motorcycle safety training course, then you can receive some major discounts.
It is a good idea to pay a higher deductible so that you can lower monthly payments. The deductible refers to the amount of money you are required to pay before the insurance company takes over.

You might not realize it, but the average cost of motorcycle insurance can range from between $20 a month to $300 a month. Carefully consider all of your options, and purchase insurance that will completely cover all attributes of your motorcycle.

A Guide to The New Health Care Bill (H.R. 3590) Part Two

This is Part 2 of “A Guide to the New Healthcare Bill.” Here, we continue to provide some of the most crucial mandates found within the new health care bill.

Increased Subsidies and Tax Credits
One of the most drastic adjustments to the bill concerns government subsidies. The new bill provides a large amount of tax credits for acquiring an insurance plan. Actually, the revised bill contains much more tax credits than the original Senate bill contained.

Now, the bill is designed in a sliding scale structure. Tax credits and subsidies are available to households who gain up to four times the federal poverty level. This means that the cap on subsidies ends at $88,200 for a family of four. If you make less than this, then you’ll qualify for tax credits. A family of four that brings in about $40,000 would receive premium caps that would hover around 6 percent of total income.

The Introduction of Exchanges
The bill introduces new state-sponsored purchasing groups which are called exchanges. Uninsured people, freelancers, and even small businesses can decide to purchase coverage through these exchanges. The exchanges basically empower these people to acquire coverage equivalent to that which employees of large companies can acquire. If you currently work for a large firm, you won’t see much of a change. But, if you get fired or laid-off, you might be able to qualify for this subsidized coverage.

Technically, the new bill doesn’t account for a totally government run plan. However, the new exchanges do operate under a federal office that manages governmental employees’ health plans. So you basically are signing up for a national plan if you do go for subsidized coverage. These plans are technically private and nonprofit.

The Exclusion of Abortion
The new health care bill does not allow taxpayer money to be allocated towards abortion or other elective procedures. The bill does not mandate that any plan is required to cover abortion. If a plan does cover abortion, then the insured parties must pay for the abortion coverage separately from the subsidized coverage. The bill also defers some of the decision to the state level, wherein state congressional lawmakers have the option to ban abortion coverage or ease laws pertaining to abortion coverage.

Republican Input for the Bill
President Obama has agreed to implement some Republican provisions into the new health care bill. Originally, Republicans wanted to add a structure by which investigators would pose as patients to attempt to uncover insurance fraud. Also, Republicans wanted the bill to address medical malpractice reform and some tort reform. These additions were not included in the final bill. However, Senator Charles Grassley of Iowa suggested increasing Medicaid payments to primary care physicians, and this appears to have been left in the final bill.

As you can see, the new health care bill has a lot of bells and whistles. We’ll see most of the mandates implemented around 2014 and later. You should take a look at your tax bracket to see how you can qualify for medical tax credits. If you’re self-employed, employed at a small business, or uninsured, then be sure to read up on exchanges. You can still choose from a menu of policies, even though they’re all generally subsidized.

You can also read more about insurance rates for health care on our main site.

A Guide to the New Health Care Bill (H.R. 3590): Part One

While the new health care bill has sparked controversy between liberals and conservatives, a finally amended version was passed by the House in March of 2010.  While a bitter fight continues in the Senate, it’s safe to assume that the major provisions of the bill will remain intact. Here, we’ll provide a general guide to the details of the health care bill.

Total Cost of the Health Care Bill
The Congressional Budget Office released an estimate that the total bill will cost roughly $940 billion over 10 years. As a result, major coverage expansion will begin in 2014. Over 32 million uninsured Americans will be able to secure coverage as a result of the health care bill.

The new bill requires almost every citizen to purchase health insurance. People who are required to purchase insurance but deign not to will be hit with a fine. Some low-income families will receive exemptions to these requirements. This mandate will go into effect in 2014 as well.

New Requirements for Insurance Companies
A major attribute of the law will require insurers to provide affordable insurance to people who have existing medical conditions. This means that insurance companies can’t deny coverage based on previous health history or current issues. Also, women can no longer be charged for higher premiums than men.

The bill also prohibits insurance companies from issuing financial and dollar limits on health insurance policies. They are also required to cover children who may be suffering from existing medical conditions.  The age limit for parents to keep their children on their policy has been extended to age 26.

Special Provisions for High-Risk People
The bill creates an interim high-risk pool that offers specialized insurance to people who are uninsured and suffering from medical conditions. This high-risk pool covers people until 2014, at which point the expansion of coverage would sufficiently cover these people.

The bill expands Medicaid coverage for people who live within the poverty level as defined by the federal government. The new Medicaid policies are designed to cover people for 133 percent of the current poverty level coverage.

More taxes will be levied to pay for this expansion in coverage. Investment income and wage income will be taxed at a rate of 3.8 percent. Only individuals who make more than $200,000 a year or married couples who pull in over $250,000 will be subject to this tax increase.

Filling the “Gap” for Seniors
Seniors will be able to acquire a $250 rebate on prescription drugs once they have spent $2,830 on pharmaceuticals, thereby reaching the coverage gap. Seniors who are in the coverage gap will also receive discounts to brand-name drugs starting in 2011. In 2020, the gap is expected to disappear, meaning seniors will only have to pay 25% of the cost of their prescription drugs.

These are the most prominent changes that are found in the health care bill. Still, there are a few additional attributes that need to be addressed. As a result, I’ve added a second part to this article. Read part 2 for more information about the new health care bill.

The Vocabulary of Auto Insurance Rates

Auto insurance rates are contingent upon a variety of factors.  You can take steps to lower you auto insurance rates if you maintain a clean driving record, choose the right vehicle, and take other precautionary steps. In this article, we’ll go over some common terms used in auto insurance parlance.

Bodily Injury Liability – This type of insurance will cover the costs incurred if you caused an accident in which someone else was injured or killed.

Collision Insurance – This will pay for damages to your vehicle if the vehicle is involved in a collision. It doesn’t matter who is at fault, collision insurance will cover your vehicle regardless.

Medical Payments – You will purchase limits on medical payments. Medical payments pay for medical and funeral expenses for the driver and any passengers in the car at the time of an accident. The insurance company will provide coverage regardless of who caused the accident.

Property Damage Liability – This insurance covers damages you might cause to the property of someone else as a result of a car accident.

Comprehensive – You can purchase comprehensive insurance, which pays for damages to your car that are unrelated to accidents. Examples are fire, vandalism, flood, glass, debris, graffiti, etc. Most of the time, you need to pay a deductible with comprehensive insurance.

Uninsured Motorist Bodily Injury – The insurance company will pay for the bodily injury or death of you and your passengers if you get into an accident with an uninsured motorist. However, this insurance doesn’t apply to any damages sustained by your vehicle.

These are a few frequently used terms in auto insurance. Familiarize yourself with them, because you’ll need to know them.

High Insurance Rates and Disputed Claims

Homeowners’ insurance rates can be expensive and overwhelming. While all homeowners struggle to pay the large insurance rates that come with owning a home, most homeowners expect insurance companies to pay when they have a claim. If your insurance company has denied your claim, you have many options. Here’s what you should do.

1.Don’t take no for an answer. Statistics show that less than 1% of people appeal or query a denied claim. But over 50% of the people who DO fight back actually get their claims approved. This means that persistence will get you far. Insurance companies unjustly deny almost 10% of all claims. If you are filing an honest claim and you’ve got the evidence to back it up, then you just might win your claim. More often than not, claimants who issue a query for their claim will actually get a better settlement, or will be able to reverse a denied claim.

2.Obtain all correspondences with the insurance company. You need to make sure you get everything in writing. Ask for the insurance company to review the case. Request that the company include detailed information regarding the status of your claim, and why they denied the claim. You might be unaware that many jurisdictions require insurance companies to issue written documentation to claimants.

3.Go over your policy in detail. Compare your policy with the insurance company’s response to your claim. If you notice discrepancies, then you can build a case. Assemble this evidence in writing and incorporate quotes from your policy to prove your claim. Often, disputes over insurance claims come from the way that the policy is interpreted. This means that if you can put together a strong case for why your claim should be honored, you’re more likely to receive funds from the insurance company.

4.Defend yourself from Claims Process Errors. Each insurance company has a specific company policy regarding the way they process claims. Often, they require that you file claims within an allotted period of time. Some companies will even deny claims because you didn’t fill out paperwork on time, or you left something blank. The majority of legal jurisdictions have laws that state that insurance companies cannot deny claims due to claims process errors. So, don’t take this flawed logic.

5.Talk to your agent. Since you’ve developed a relationship with someone at the company, it might help to discuss matters personally with your insurance agent.

6.Check with authorities. If you live in the U.S., the State Insurance Department can inform you as to your rights regarding insurance claims.

7.Hire an agent. Professional Loss Consultants will fight the insurance company for you. They’ve often got an inside track on what’s going on. Usually, they just charge a percentage of your claim. Don’t pay money up front to these folks. If they’re good, they’ll only take a percentage of your claim. They can be very useful; as they’ll work hard to make sure you get your money.
You have to be dogged when you’re dealing with insurance companies. If your claims have been unjustly denied, you have to fight. Remember; keep fighting until you win your claim.

7 Steps to Lower Auto Insurance Rates

There’s a science to securing the lowest car insurance rates on the market. While shopping around for car insurance rates can seem daunting, there are a few things you can do reduce your premiums. If the goal is saving money, then follow these steps when searching for car insurance.

1.Maintain a good credit history. Auto insurance companies often analyze your credit history to determine your risk factor status. This might seem obvious, but all it really means is that you pay bills on time and stay out of debt. A good credit history will also help keep your home insurance rates low.

2.Live in the country. Purchase a home in a rural or suburban area rather than in the city. In rural areas, less crime and less traffic means it’s less likely your car will be vandalized, stolen, or involved in an accident. This is much easier said than done, but it’s the hard truth. Living in a city means you’ll pay more for auto insurance.

3.Drive fewer miles to qualify for car insurance discounts. Many car insurance companies offer low-mileage discounts to customers who drive less than 8,000 miles per year. Also, if you use public transportation frequently, you may qualify for a commuter’s discount.

4.Pay a higher deductible. You can slash your monthly insurance premium by up to 20% if you agree to pay a higher deductible. Of course this means that you’ll be responsible for paying the deductible if you’re involved in an accident. But, if you’re a safe driver, a higher deductible and a lower premium can save you lots of money.

5.Purchase a ‘plain Jane’ car. All auto insurance companies rate cars based on their make, model, year, and sometimes, even their color! Most insurance companies will place powerful sports cars or flashy automobiles in the high-risk category. This is because car thieves target these cars more often than ‘regular’ cars. Also, the fact that some of these cars can reach speeds in excess of 180 mph motivates the insurance companies to classify them as high risk.

6.Be a defensive driver. Many auto insurance companies offer discounts to drivers who have no traffic violations or accidents for a period of 3 years. Sometimes these price breaks are quite significant, so you should obey the law and be very cautious if you want to take advantage of these discounts.
7. Park in a garage. If you report that you park your car in a garage, you can often receive small discounts from insurance companies. This is due to the fact that cars in garages are less likely to be damaged or vandalized than cars parked on the street.
As you can see, there are a variety of ways you can reduce your monthly insurance expenses. Be sure to take advantage of any discount you might be able to procure. Many people believe it takes practice to combine discounts and reduce your price. Either way, it’s smart to capitalize on discounts so that you end up paying less for auto insurance.