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Newsletter: March 2010

Health Reform: Dead or Alive? On The Back Burner or on Life Support?

While many in Washington, DC, and across the nation assumed that congressional Democrats and the Obama administration would have made a clear decision on the best way to advance health reform forward by now, they have instead been all over the map with no agreement on strategy. During his State of the Union address, the president did call on Congress to not give up on health care reform and asked them to reconsider the two bills currently on the table. But he also asked for anyone, on a bipartisan basis, who could come up with a better plan to bring their ideas to him, and stated that his current top legislative priority is a jobs bill. Over the course of the week, congressional leaders have made all kinds of conflicting statements about health reform, ranging from pursuing a quick resolution through the use of the budget reconciliation process in the Senate to focusing on jobs immediately and taking the rest of the year to address the issue. Perhaps a clearer indication of at least the president’s goals for moving forward will come next week when the administration is due to release its draft FY 2011 budget to Congress and public, as it will contain his health care spending blueprint for the upcoming year. While their ultimate path remains unclear, if you listen closely to what the Democrats are saying, a few key themes are evident. First, it’s clear that they haven’t abandoned the idea of health reform entirely—it’s not dead, it just may take them a while. Second, their focus is going to be on health insurance market reforms and not cost containment, helping the uninsured or other delivery system improvements.

In the Senate, Democratic aides are still investigating various procedural means of advancing H.R. 3590, including any way they could use the reconciliation process to pass fixes to the Senate bill with just a simple majority vote. But reconciliation is a complicated procedural maneuver and its use is not supported by several key Democratic senators. Also, because the rules governing its use limit it to matters with a direct federal budgetary impact, the process may not even be capable of satisfying the political problems many House members see with the Senate bill. Over the past few days, Senate leaders have indicated that it may take weeks or even months to decide what process will make the most sense for their chamber and that their current focus will be on jobs. Senator Reid even went so far as to say that the 111th Congress still has another year to act.

The clearest anyone has been on how they plan to forge ahead so far is House Speaker Nancy Pelosi (D-CA). Yesterday, she indicated that the House would move a series of market reform-oriented bills aimed at addressing the issues House members feel are most important. At the top of her list was eliminating the federal antitrust exemption for health insurers (see more detailed story below), and she identified other market-reform possibilities including medical loss ratios, pre-existing condition clauses, rescission protections and rating reforms as potential future bill topics. Pelosi said she was not giving up on passing a comprehensive bill, but she made it very clear that there are serious differences between the House- and Senate-passed legislation that will have to be addressed first and that there is really only about 70% agreement between the two bills.

Insurance Connection USA hopes that members of Congress will work together in a bipartisan fashion on sensible solutions that rein in health care costs, provide better access to care, improve quality, create better efficiency, and put our health care system on an affordable and sustainable path.

Property & Casualty Corner

Insurance Tips for Homeowners

Many consumers have faced rapidly escalating insurance premiums on their homeowners insurance during the last few years. In some cases, consumers have experienced difficulty in procuring insurance, particularly people with several claims. Many consumers believe that they are powerless when it comes to these situations. However, there are numerous steps that homeowners can take to reduce their premium (without sacrificing coverage) and to lessen the possibility of future losses. Consumers can benefit accordingly because some insurers offer loss free discounts. In other cases, consumers with flawless or near flawless loss history can qualify for policies offering lower premiums.

The following tips offer ways of saving premium dollars and reducing losses on your homeowners policy.

1. Consider increasing your deductible to the highest one you can afford, even if the premium savings do not seem to justify it. This will serve a dual purpose of decreasing your premium and increasing the chance that your loss history will be good, since incidental losses will be paid by you and not the insurance company. A loss-free record over time saves premium dollars.
2. Consider purchasing a monitored burglar alarm. Most insurers provide discounts to homeowners with these alarms, some as high as 20 percent. Burglars often pass by homes with prominent burglar alarm signs displayed, opting for homes without these signs. Property identification programs are another deterrent to burglary. These programs provide stickers on which your identification number is permanently imprinted. You then place these on all valuable personal property. This makes it more difficult for burglars to fence or pawn your property.
3. Replace washing machine hoses when they show signs of deterioration, because a burst hose can cause extensive damage. Inspect the hoses on a regular basis. In addition, turn off the washing machine water faucet when the appliance is not in use to prevent leaks.
4. Maintain your roof in optimal condition. A roof inspection on a periodic basis can identify sections that need repair and thus prevent water losses. Roofing materials containing high wind resistance features should be considered in windstorm-prone areas. Some insurers provide discounts for these types of roofs.
5. If you experience a water leak, make sure it is properly repaired and remediated, which can include the removal and replacement of building materials such as sheetrock. For larger water leaks, a professional who specializes in remediation should be called in. These measures will reduce the possibility of hazardous and expensive mold losses down the road.
6. If you are considering buying a home, be aware that many insurance companies offer new home discounts. Some insurers offer the highest discounts (e.g., 20 percent) on brand new homes and gradually lower discounts for several years as the home ages.
7. Request a copy of a CLUE report on the home you are considering buying. CLUE stands for Comprehensive Loss Underwriting Exchange and this report provides a list of prior losses for a particular home. It is generated from a database of insurance losses compiled by a high percentage of insurance companies. You can normally contact your current homeowners agent to get this information on a prospective home. Be wary of purchasing a home experiencing prior foundation, water, or mold losses.
8. Train yourself on how a fire extinguisher works. Always keep a fire extinguisher in the garage as well as the kitchen and on each floor of your home. In addition, the furnace should be inspected each fall by a licensed professional.
9. Install and maintain smoke alarms throughout the house. It is best if the alarms are interconnected, so that if one goes off, they all go off. Test the smoke alarm once a month. These detectors should be approved by Underwriters’ Laboratories (UL) or other recognized testing laboratories.
10. Consider purchasing both your homeowners and personal auto coverage with the same insurer. Many insurers offer home/car discounts for multi-line customers, with some discounts as high as 20 percent.
11. Shop your homeowners policy with financially strong insurance companies. Do not select a particular insurance company just because it has the lowest rate. Other factors to consider are claims handling reputation, customer service, and financial strength. Keep in mind, however, that some insurers offer long-term customer (e.g., 5 or more years) discounts. These can make it worthwhile to stay with your current insurance company if you are pleased with their service.
12. Periodically check your credit rating. There may be cases in which an error has occurred which could negatively affect your rating. The credit bureau has procedures in place to remedy these situations.

Health Insurance

2010 Health Savings Account Contribution Limits Set

The U.S. Treasury and IRS have already announced what the maximum contributions will be for Health Savings Accounts or HSA in 2010. Individuals may contribute up to $3,050 in 2010 and families may contribute up to $6,150 per year. Also, individuals aged 55 or older can contribute $1,000 as a catch-up contribution. The money that HSA participants contribute to their HSA is tax-deductible from their annual income taxes.

In addition to the maximum contribution amounts that HSA participants can contribute each year, there are also maximum out-of-pocket spending caps. In 2010, individuals must have a maximum out-of-pocket spending cap of $5,950. Families must have a maximum out-of-pocket spending deductible of $11,900.

Minimum insurance deductibles are also determined by the government. In 2010, individuals must have a minimum insurance deductible of $1,200 for their high deductible insurance plans. Families must have a minimum deductible of $2,400 for their high deductible insurance plans.

Each of these figures increased by $50 for individual HSA participants and at least $200 for family HSA participants.

A Health Savings Account is a savings account in which participants can put money that they earmark for healthcare expenses. The contributions that HSA participants make towards their HSA each year is reduced from their income tax burden, which helps to save HSA participants money off of their income taxes.

HSA participants can use the money that they put into their Health Savings Accounts to help pay for qualifying healthcare expenses. Often, the healthcare expenses that are covered by Health Savings Accounts are greater than healthcare expenses that are covered by many health insurance plans.

If HSA participants want to use the money in their HSA to pay for non-qualifying healthcare expenses or for expenses not related to healthcare, they can withdraw the funds from their HSA at any time. When they make their withdrawals, the funds will be taxed at that time. However, funds will not be taxed if they are spent on qualifying healthcare expenses.

One of the many benefits of enrolling in a HSA plan is that individuals and families are generally able to save thousands of dollars each year while growing their wealth. The money that HSA participants invest in their HSA can be invested in other high interest-yielding vehicles, such as stocks and bonds. In this sense, HSA are similar to IRAs.

Also, because Health Savings Accounts are combined with high deductible health insurance plans, Health Savings Account participants can save a significant amount of money each month off of the cost of their health insurance premiums.

Many health insurance providers offer HSA options as part of their menu of health insurance plans. It is important that individuals wishing to enroll in HSA find qualifying high deductible health insurance plans that are specifically suited to correspond to HSA.

It may also be helpful for individuals wishing to enroll in HSA to contact an experienced insurance advisor who can help them find the right plan for their needs and their budgets.

When people shop around for medical insurance, one of their biggest concerns is the price. This is a very important part of picking your plan, but it is not the only factor that you should look for. You also need to make sure that your plan is worth buying. Finding the cheapest health insurance prices online is easy, but finding a plan that is affordable and worthwhile can be tough. Here are a few tips to get a good coverage plan.

Before you start shopping for a plan, you need to decide what type of coverage you need. Are you shopping for coverage for your entire family, or just for yourself. Do you have a few medical conditions, and will be seeing the doctor often, or do you just need to be covered in case of an accident? Deciding on the coverage that you need should make it easier for you to pick a plan.

When you have an idea of the type of coverage that you need, you can start comparing health insurance prices. One of the easiest ways for you to do this is by using the Internet or contacting a licensed insurance agent. The internet has many comparison websites that will allow you to see different companies side by side. Not only can you check their health insurance prices, but you can also check their plans. Make sure that they meet the coverage that you need.

Another aspect of health insurance cost that you should be aware of, is the different between your monthly bill, and the amount you will pay during a visit. The more you pay a month, the less you are going to pay when you have to go and see a doctor. The less that you pay a month, the more you will pay when see a doctor. You need to decide what type of plan that you need, and price you can afford.

Click here for a complete list of available health plans and rates.

Medicare News You Can Use

Medicare, of course, is a program funded by the federal government, but it does not cover all medical expenses. Medigap or Medicare supplements are designed to help cover other things that people typically need covered by Medicare. Good examples of the types of coverage that is not always offered in Medicare that people buy through Medicare supplements is skilled nursing care and preventative medical care. As you can imagine, especially with older Americans, this type of coverage is very important for many reasons.

Insurance companies that wish to offer Medicare supplements must be licensed by the State Department of Insurance to be sure they are operating in a way that complies with all the laws and regulations to keep your policy compliant. These supplements are standardized by the federal government to ensure everyone purchasing supplements are receiving the same coverage. So no matter which company you choose, you don't have to worry about the quality of the plan, but only the price.

There are 12 different kinds of Medicare supplements to choose from, and each plan is different in coverage and surely price. Depending on your circumstances, you might want to choose a plan that will keep your out of pocket charges to a minimum. Medical expenses are at an all time high and you don't want to be stuck footing that bill! Labeled with letters A through L, supplement plans are often confusing, but you really need only take a look at a chart or graph which outlines which plans have nursing care, at home recovery, preventative medical care, foreign travel emergency coverage, and deductible parts A and B to decide which will be best suited for you or your loved one.

Purchasing Medicare supplements for yourself or your loved one can be a little confusing, but if you do just a little bit of searching, you will find the detailed and in-depth explanations of each plan and you will be able to figure out what plan is best.

Contact a licensed agent at Insurance Connection USA for more information and additional questions.