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Understanding Common Health Insurance Terms

Understanding Common Health Insurance Terms

Whether you are searching for health insurance now or already enrolled in a plan, you may find the plan terms, or coverage descriptions, to be difficult to understand. Don’t worry. You are not alone.

Below is a list of common health insurance terms to help you understand what your health insurance plan has to offer:

Deductible

The deductible refers to the amount of money the insured is required to pay out-of-pocket before accessing benefits from the insurance policy. Deductibles are usually setup on a policy (starting with the effective date of the policy) or calendar year basis, and start over each year. Some services, such as doctor visits and prescriptions, may be available without first satisfying the deductible. Usually there are separate individual and family deductible amounts. Many policies place a cap on the number of individual deductibles that need to be met for a family regardless of the number of family members.

Co-insurance

After an insured’s deductible is met, most policies require the insured to pay a percentage of each claim. For example, with an 80% co-insurance plan, the insured would pay 20% of all bills once their deductible was satisfied.

Out-of-Pocket Max

In most cases, the out-of-pocket max refers to the maximum co-insurance that an insured is required to pay before the policy picks up 100% of eligible costs. Some policies include the deductible as part of the out-of-pocket maximum.

Lifetime Maximum

The amount of money the policy will pay during the life of the policy. This figure is often set at $1 million per insured, or some variation thereof, but some policies offer an unlimited lifetime maximum.

Exclusions

These are items or medical services that are not covered by the health plan.

Pre-existing Condition

A medical condition diagnosed prior to the effective date of the health plan. If someone can document at least 12 months of continuous coverage, most health plans are required under HIPAA to cover pre-existing conditions. Some policies, such as short-term or temporary plans, do not cover pre-existing conditions regardless of whether a person has had prior coverage.

Coordination of Benefits

If the insured has two or more insurance policies, such as being covered by a spouse’s insurance plan along with their own, that would cover payment for certain conditions, the the secondary insurer would pay only for expenses not covered by the primary insurer.

Medical Necessity

A medical procedure or service must be performed only for the treatment of an accident, injury or illness and is not considered experimental,
investigational or cosmetic.

Participating Provider

A physician or other medical provider has agreed to accept a negotiated fee for services provided to members of a specific health plan.  These
providers are often called “in-network.”

Usual & Customary Rate (UCR)

This is a reduction in the payment of benefits on a claim which is justified by the insurance company as “the going rate” in a certain
geographical area.

Allowed Amount

The amount of the billed charge the insurance company covers. For an in-network provider, this would be equal to the negotiated rate. For other providers, this might be based off a usual and customary rate for a given area.

Is Long-Term Care Coverage Right for You?

Is Long-Term Care Coverage Right for You?

According to the Congressional Budget Office (CBO), “Over the next several decades, the population of U.S. seniors – people aged 65 and older – is expected to grow rapidly, more than doubling by 2040. That surge will probably produce a similar increase in the demand for long-term care services – the personal assistance that enables people who are impaired to perform daily routines such as eating, bathing and dressing.”

While Medicaid covers a portion of LTC costs, you may have to exhaust a great deal of your assets in order to qualify due to strict financial eligibility guidelines. Additionally, rising nursing home costs, which, according to the 2006 MetLife Market Survey of Nursing Home and Home Care Costs, now cost on average $206 a day-$75,190 a year, can lead people to wonder how they will ever be able to afford long-term care if they should ever need it. A product that can help is Long-Term Care (LTC) Insurance.

In general, a LTC insurance policy works by paying a selected dollar amount per day for the type of long-term care outlined in the policy. The most common method insurance companies determine when benefits should be paid, is based on your inability to perform certain “activities of daily living” (ADLs), such as eating, bathing, transferring in and out of bed, and dressing. Usually, benefits are payable when you are unable to perform a specified number of ADLs.  However, some policies will only pay benefits when your doctor certifies that the care is medically necessary.

Some life insurance policies offer long-term care coverage as an option. For instance, the policies would contain a rider that allows the policy’s cash value or a portion of the death benefit to be used to fund LTC expenses. Typically, a portion of the death benefit would be paid on a periodic basis after the insured qualifies. However, money received under this option will usually reduce the amount of death benefit the beneficiary will eventually receive.

LTC insurance is not for everyone; the choice to obtain it or not can depend on your age and financial circumstances. Generally, if you meet the following requirements, you should consider a LTC policy:

·        You are between the ages of 40-84.

·        You have significant assets to protect.

·        You can afford to pay premiums now and in the future.

·        You are in good health, and are insurable.

Since there are many LTC options available, it is best to consult your financial professional for help in determining whether this coverage is right for you.

Long-Term Care Partnership Program Makes Policy Purchases More Attractive to Consumers

Long-Term Care Partnership Program Makes Policy Purchases More Attractive to Consumers

Few expenses can deplete a lifetime of savings as rapidly as the need for long-term care. The Long-Term Care (LTC) Partnership Program, a federally supported, state-operated initiative, helps individuals protect themselves against this possibility by encouraging them to purchase long-term care insurance policies.

Basically, the program works like this: An LTC Partnership Program-qualified policy will cover the cost of long-term care initially, after which time the policy owner will be able to apply for Medicaid to pay for additional long-term care services-but without having to spend down personal assets as would normally be required. By permitting individuals to protect a portion of their personal assets, the program is intended to provide an incentive to purchase a qualified long-term care insurance policy, a result that would benefit individual consumers and insurance companies, too, by creating a more active market for long-term care insurance.

At the same time, states participating in the program hope to save dollars by having more individuals pay at least a portion of long-term care expenses with policy benefits, thereby delaying the point in time at which Medicaid kicks in. Medicaid currently accounts for close to 49% of overall long-term care funding, while private health and long-term care insurance pay just over 7%, according to information from the National Conference of State Legislatures.

The LTC Partnership Program began in the mid-1980s. Currently, qualified policies are available for sale in 23 states, according to the Long-Term Care Partnership Program Technical Assistance Website. Most other states have programs in various stages of development or approval.

Program specifics will vary state to state. For example, some use a dollar-for-dollar model: If an individual purchasing a qualified long-term care insurance policy worth $150,000 exhausts policy benefits, he or she can qualify for Medicaid to pay for additional long-term care expenses without having to spend down $150,000 worth of personal assets. Other states use a total assets model: Individuals who purchase qualified coverage of at least a set dollar amount can protect all individual assets after they have exhausted policy benefits.

States set the requirements for qualified long-term care policy provisions. These may include whether qualified policies must be comprehensive or facility-only, and minimum daily benefit amounts.

Statistics on the ever-rising cost of long-term care services make it clear how great the need is for long-term care planning. According to Genworth Financial’s 2009 Cost of Care Survey, individuals needing long-term care services will see the following national averages:

• $183 per day for a semi-private room ($203 for a private room) in a nursing home that provides 24-hour-a-day skilled care.

• $2,825 per month for a private room in an assisted living facility providing assistance with personal care, as well as some medical care.

• $18 per hour for home health aid services provided by a non-Medicare-certified but state-licensed agency (for example, assistance with bathing, dressing, transferring, etc.).

• $46 per hour for home health aid services, sometimes including skilled care, when provided by a Medicare-certified agency.

• $10 per hour for adult day care services in a community-based setting.

Companies exploring adding a long-term care benefit to their voluntary benefits offerings should check to see whether partnership program plans are available in their states. The advantages of such policies-in a time when the need for long-term care services is on the rise, along with the cost of such services-can help make long-term care a voluntary benefit that employees truly welcome.

Immediate Annuities Can Help You Secure Your Retirement Income

Immediate Annuities Can Help You Secure Your Retirement Income

As you approach retirement, it’s natural to worry about your retirement portfolio. It is also natural to become frightened during a recession, such as the ongoing downturn that started in 2008. During tough times, your entire strategy can suddenly become worthless. The supply of cash that you have carefully built up over your working life is gone, vanished like so much dust. This is downright scary. What shall you do? Many individuals in this same situation end up taking part-time jobs in order to support themselves.

An immediate annuity can help you regain liquidity. Buying an annuity is like buying a monthly pension check. It is an insurance policy that pays you a lifelong income stream in exchange for a lump sum. There is no age limit for purchasing an immediate annuity; you can buy one at 80 or 90 if you want to. When the payments start is entirely up to you. Once you decide on a date, the payments are orderly and on time, appearing on that date every month for the rest of your life.

Consider several advantages to immediate annuities:

  • Your insurance agent will be able to tell you what the monthly payment amount is based on your lump sum.
  • The annuity is backed by the financial security and assets of an insurance company, so do your research before buying.
  • This product affords you, the beneficiary immediate peace of mind since the payments start when you choose. You can rest completely assured of a secure, stable long-term monthly income. You can even add an inflation rider to the policy so that your income will not get eaten by inflationary pressures.
  • Since immediate annuities are different from stocks and bonds, there is no worry about volatility or market fluctuations. The value of the annuity remains constant. You have the protection of knowing that every month, the money will be deposited into your bank account.
  • There are no fees of any kind to be paid – no management fees, no setup or administrative fees, and no annual fees.
  • Favorable tax treatment – Only a small portion of income generated from an immediate annuity funded with after-tax dollars would be taxable.  This is because part of every payment is considered a return of principal.

Is an immediate annuity right for you? That depends on your unique needs of course. For those seeking to secure a future income stream, immediate annuities are a perfect way of achieving a guaranteed monthly income which will not fluctuate due to external forces. The peace of mind possible with having an income stream one cannot outlive should not be ignored.

Liquidated earnings are subject to ordinary income tax, may be subject to surrender charges and, if taken prior to age 59 1⁄2, may be subject to a 10% federal income tax penalty.

Guarantees and payment of lifetime income are contingent on the claims paying ability of the issuing insurance company.

Temporary Medical Health Insurance

For many people the task of discovering competitively priced temporary medical health insurance can be quite hard. No matter what the reason that you need affordable short- term medical insurance is there are lots of methods of achieve it. Whether you may need it because you are changing jobs, schools, retired, graduating, employed, unemployed, or moving you may be eligible to apply for short- term medical health insurance. What many people want to know is what precisely is short- term medical health insurance. One of the large benefits of short- term medical insurance is the low monthly premium that people have to pay. Short- term medical health insurance is one of the best insurance policies plans those of you that are on the move, with monthly premiums costing less than a small car payment. This sort of health insurance is directed mostly at healthy people, their families, or kids who do not need insurance policy for pre- existing conditions, these types of insurance policy polices can give people a fall back plan if something were to happen to them or a family member. Based on the plan that they pick the benefits can be perfect for them because many of these plans can provide families with up to$ 1. 5- 2 million bucks per person for severe personal harm and health problems.

Short term insurance coverage has grown at a rapid rate in the past couple of years with the quantity of people who find themselves uninsured being near 45 million. It has recently been made essential that those who find themselves uninsured must be insured in the next few years, which has made this type of insurance even more popular with such low insurance premium as well as adequate coverage as long as you are health in the 3 years prior to being covered by the plan. There are many different companies offering budget friendly short- term health insurance for you to pick from and also different plans within each company that you can look for.

One thing to be aware when you are going to look for comparatively cheap short term medical insurance plans is that these plans will not cover you for pre- existing conditions, this is why it is a “short- term” plan, and why the monthly premiums can be so low. If you don’t know what a preexisting condition is, it is any indications, or illnesses that you maybe have had 3 years prior to the start of your cost-efficient short term health insurance coverage, this is why it is very important that when you fill out the application to tell them everything has gone on, if you do have pre- existing conditions this is not the proper type of insurance coverage for you, and although the monthly payments are going to be low, it will not be able to help you if something from the previous months catches up with you and you need serious medical attention. If this were to happen it is seems that the short- term coverage that you may be receiving may be dropped.

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Nursing Home Insurance

Nursing Home Insurance, which is more commonly known now as Long Term Care Insurance.  Purchasing a Long Term Care Insurance policy can be one of the most important policies you buy.  I tell my customers that like auto insurance you buy long term care insurance with the hopes that you don’t use it.  Unlike buying term life insurance, long term care is a little more complicated.  For one there isn’t one standard rate for everyone, so quoting I feel requires a chat with a reputable and knowledgeable long term care insurance insurance planner.  There are many many different options that go into a long term care policy.  Knowing your goals and your risks regarding the long term care policy, I can customize your long term care plan for you.  Give me a call today, 509-218-7329