Ken Himmler.com

If you're older and/or in poor health, you're definitely somebody who should have health insurance coverage. Unfortunately, you don't, and you're having difficulty getting it. All of the insurance companies you've applied to refuse to offer you coverage because they see you as too great a risk. They may even classify you as totally uninsurable. The good news is that you're not without options.

Shop around

In reality, few people are totally uninsurable. More likely, you're one of the "hard to insure." The variety of health insurance sources in this country means that most people have at least one option available to them. Most states have an insurer of last resort (e.g., Blue Cross Blue Shield) that must accept all applicants. In addition, beginning in 2010, the Patient Protection and Affordable Care Act (PPACA) prohibits health plans from denying children coverage based on pre-existing conditions or from including pre-existing condition exclusions for children. Beginning in 2014, all health insurers must sell coverage to everyone who applies, regardless of their medical history or health status, nor can plans exclude coverage for those medical conditions. Of course, depending on your health and other factors, the company may require you to pay a higher-than-average premium or offer restricted coverage to cover its risk of loss. If so, you must weigh the cost of the insurance against the potential benefits.

One additional note: Hard-to-insure individuals may feel tempted to lie or withhold information on an insurance application in order to get the coverage they desire. No matter how badly you need health insurance, don't do this. Not only is it unethical and illegal, but your insurance company generally has the right to immediately terminate your policy (and sue you to recover any benefits paid) if it discovers that you've been dishonest.

A new, more insurable you

The two primary factors that an insurance company looks at in deciding whether to insure you (and at what cost) are your medical history and your present health, both physical and mental. Although there's nothing you can do to change your medical history, you can take steps to improve your present health. Exercising regularly, following a better diet, and reducing your stress level all promote a healthier lifestyle. These steps can also dramatically improve your general health over a relatively short time and make you less of a risk. Insurance companies may then find you more attractive as a candidate for health insurance.

In addition, an insurance company considers other factors in determining insurability, such as your age, gender, marital status, income, occupation, and personal habits. Some of these factors are within your power to change, and certain changes may increase your chances of getting health insurance at an affordable rate. You could, for example, give up smoking or drinking. If you work in a dangerous occupation, you might consider switching to a less hazardous line of work.

Work it out through work

If you have no health insurance but work for a company that offers employer-sponsored group coverage, consider participating in the plan. If your employer doesn't have a group health plan, you might even consider leaving your present job and going to work for a company that does.

Group health insurance generally provides extensive coverage and may cost you little or nothing, especially if your employer pays all or most of the premium. Moreover, this type of insurance is ideal for hard-to-insure people who have difficulty obtaining individual coverage. When you enroll in a group plan, you generally don't have to take medical exams, answer a lot of probing questions, and undergo the other screening processes that are typically required before you can get an individual policy. This is because your portion of the group premium isn't based on personal factors about you–it's based on the risk characteristics of the group as a whole (e.g., average age).

COBRA

If you terminate your service with an employer, any group health insurance coverage you were receiving through that employer generally ceases as well. This is true whether you leave the job voluntarily or involuntarily. You may also lose employer coverage due to a reduction in your work hours. These events don't necessarily mean, however, that you have to go without health insurance or start shopping for individual policies. The reason: You are eligible for benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA) if your former employer had more than 20 employees.

The medical coverage you receive through COBRA is identical to the coverage that you had under your employer's plan, but you must now pay the full premium out of your own pocket. This can be expensive, but if you're not in the greatest health, it's better than being uninsured or trying to get an individual policy. The key for hard-to-insure people is that you can elect COBRA coverage without having to undergo any individual screening to evaluate your risk. COBRA coverage typically lasts up to 18 months, although this may be extended to 36 months in some cases.

Government benefits

Another way to get health insurance coverage is through government benefits. The three main sources of such benefits are Medicare, Medicaid, and the Department of Veterans Affairs (VA), formerly known as the Veterans Administration. These programs can be an excellent way to receive health insurance at relatively low cost, but you must meet the eligibility requirements and sometimes fund certain medical expenses out of your own pocket. In addition, some of these programs are not comprehensive and may need to be supplemented with other health insurance.

Medicare is a federal program designed to provide reasonably priced health insurance for retirees, regardless of medical condition. You generally become eligible for Medicare at the same time you become eligible for full Social Security benefits (currently age 65). In addition, some disabled individuals and people with kidney disease are eligible for coverage. Medicare is broken down into two parts, A and B. The specific eligibility rules, benefits, and costs to you will vary between parts A and B. It's important to realize that Medicare may not be enough after you retire, but supplemental insurance policies known as Medigap policies, sold by private insurers, can help fill the holes in Medicare's coverage. If cost is a concern, you can also choose to participate in a Medicare managed care plan. These plans, called Medicare Advantage plans, are health maintenance organizations offered by private insurance companies. If your income is limited, your state may help pay Medicare costs such as your premiums and deductibles.

Medicaid is a joint federal and state program that provides medical benefits to individuals who can't afford medical care, including elderly, disabled, and blind individuals, as well as needy dependent children. Each state has its own Medicaid program, and specific eligibility requirements and benefits vary from one state to another. In addition, Medicaid benefits depend on whether you are considered medically needy or categorically needy. However, certain core benefits (including coverage for hospital bills, physician services, and long-term nursing home care) are shared by most Medicaid programs.

In general, all veterans who served in the U.S. military (except those who were dishonorably discharged) qualify for VA hospital and outpatient care. However, some veterans may not have full access to such care. For specific information on eligibility and the types of benefits available, contact your local VA office or visit the VA website.

Health-care reform legislation, enacted in 2010, contains some provisions that directly affect our nation’s elder population. If you’re a retiree or a senior, you may be concerned about how these reforms may affect your access to health care and insurance benefits. The following is an overview of health-care reform legislation provisions you should be aware of. 

Medicare spending cuts

Not surprisingly, the concerns of retirees and seniors generally center on potential cuts in Medicare benefits. At the outset, the new legislation does not affect Medicare’s guaranteed benefits. However, two goals of the new health-care legislation are to slow the increasing cost of Medicare premiums paid by beneficiaries, and to ensure that Medicare will not run out of funds.

To help achieve these goals, cuts in Medicare spending will occur over a ten-year period, beginning in 2011, particularly targeting Medicare Advantage programs–Medicare benefits provided through private insurers but subsidized by the federal government. These cuts are intended to bring the cost of federal subsidies for Medicare Advantage plans in line with costs for comparable benefits for Medicare beneficiaries. If you participate in a Medicare Advantage plan, these cuts could reduce or eliminate some of the extra benefits your plan may offer, such as dental or vision care, and your premiums may increase. But Medicare Advantage plans cannot reduce primary Medicare benefits, nor can they impose deductibles and co-payments that are greater than what is allowed under the traditional Medicare program for comparable benefits.

Benefits added to Medicare
The legislation also improves some traditional Medicare benefits. For example, prior to the new legislation, traditional Medicare paid 80% of the cost for a one-time physical for new enrollees within the first 12 months of enrollment. But beginning in 2011, you will receive free annual wellness exams; preventive care tests such as screenings for high blood pressure, diabetes, and certain forms of cancer; and a personalized prevention assessment and plan to address particular health risk factors you may encounter.

Medicare Part D drug program changes
If you are a Medicare Part D beneficiary, you may be surprised to find that you have to pay for the entire cost of prescription drugs out-of-pocket after reaching a gap in your annual coverage, referred to as the "donut hole." Currently, you may pay up to an additional $3,610 out-of-pocket for medicines after reaching an initial threshold of $2,830 in total prescription drug costs (including Part D payments, beneficiary co-pays, and deductibles). But, in 2010, if you fall in the donut hole, you will receive a $250 rebate, and, in 2011, you will receive a 50% discount on brand-name drugs. Also beginning in 2011, a reduction in co-payments for generic drugs within the donut hole will be phased in, as well as a phased-in reduction in co-payments for brand-name drugs, starting in 2013. Essentially, by 2020, a combination of federal subsidies and a reduction in co-payments will reduce your out-of-pocket costs for medications in the gap from 100% to 25%. However, individuals with annual incomes greater than $85,000 and couples with incomes exceeding $170,000, will see their Part D premiums increase as the federal subsidy offsetting some of the cost of Medicare Part D premiums is reduced.

If you are a full-benefit dual eligible beneficiary (eligible for both Medicaid and Medicare) receiving institutional care, such as in a nursing home facility, you do not owe any co-payments for Part D-covered prescriptions. However, if you’re dually eligible and receiving long-term care services at home or in a day-care community-based setting, you are subject to Part D drug co-payments. Beginning in 2012, the new legislation removes this imbalance by eliminating co-payments for individuals receiving services at home or in a community setting.

Also, beginning in 2011, the time period during which Part D and Medicare Advantage beneficiaries can make changes to their coverage is extended and runs from October 15 to December 7. This extension should provide more time for you to consider your options while ensuring that all changes are properly incorporated into the plan for the following year.

Coverage for those under age 65
You may be between the ages of 55 and 65 and do not have health insurance provided by your employer, or if covered, find that your cost for insurance is substantial. If you’re in this predicament, the health-care legislation provides you with opportunities for affordable health insurance.
By 2014, state-based American Health Benefit Exchanges will be created, through which you can purchase affordable health insurance coverage. The Exchanges will serve as a conduit for health insurance providers to offer health plans with different benefits, co-insurance limits, and premium costs. You can then compare the costs of various plans and benefits. If you can’t afford an Exchange plan, you may be eligible for a government subsidy based on income and family size.

Increased access to home-based care

Often, people with disabilities or illnesses would rather receive care at home instead of at a nursing home. The health-care reform law provides for programs and incentives for greater access to in-home care. The Community Living Assistance Services and Support program (CLASS) will be established sometime after 2011 (depending on when final regulations are published) as a voluntary insurance program, financed through payroll deductions and available to all working adults who choose to participate. This national program helps participants with functional limitations to maintain their personal and financial independence and live in the community by providing a cash benefit of at least $50 per day (after a five-year vesting period) for nonmedical services, such as home-care services, family caregiver support, and adult day-care or residential-care services. In order to qualify, you must need help with at least two activities of daily living, such as eating, bathing, or dressing.
Also in 2011, the Community First Choice Option will be available for states to add to their Medicaid programs. This option provides benefits to Medicaid-eligible individuals for community-based care instead of placement in a nursing home.

In addition, the State Balancing Incentive Program, to be established in 2011 and running through October 2015, provides increased federal funds to qualifying states that offer Medicaid benefits to disabled individuals seeking long-term care services at home, or in the community, instead of in a nursing home. In order to be eligible, a state must spend less than 50% of its total Medicaid expenditures for at-home or community-based long-term care services and supports. The state must also agree to use the additional federal funds to provide new or expanded non-institutionally-based long-term care services.

Nursing home transparency
The Independence at Home demonstration program, available in 2012, is a test program that provides Medicare beneficiaries with chronic conditions the opportunity to receive primary care services at home. This is intended to reduce costs associated with emergency room visits and hospital readmissions, and generally improve the efficiency of care.

While in-home care may be a preference, often a nursing facility is the better or only alternative. In the past, consumers had very little information available in order to compare nursing homes. The health-care legislation addresses the need for more transparency regarding nursing facilities. For example, nursing homes are required to disclose their owners, operators, and financers. The government will also collect and report information about how well a particular nursing home is staffed, including the number of hours of nursing care residents receive, staff turnover rates, and how much facilities spend on wages and benefits.
 

If you or a loved one is covered by a Medicare health plan or prescription drug plan, now is the time to review your coverage and compare your options. Anyone covered by Medicare can make changes to his or her coverage, including choosing a new plan for 2011, beginning on November 15 and continuing through December 31, 2010. Although you can make changes at any time during this period, the earlier you do so, the more time your new plan has to mail you a membership card and other important information before your coverage begins.

       The 2011 Medicare Options Compare tool allows you to compare Medicare health plan options, including HMOs and PPOs

     The 2011 Plan Finder allows you to compare prescription drug coverage from stand-alone prescription drug plans and Medicare Advantage plans that provide prescription drug coverage (may be called MA-PDs)

The government’s bailout money is not up for grabs. Large insurance companies that qualify for the government’s bailout money have made applications. So far Hartford life, Prudential and Metropolitan are some of the ones that have made the application. They may be eligible for billions that may help bolster their corporate bond positions. Most insurance companies make money on the spreads that they get from buying corporate bonds and government bonds. Just like a bank makes a spread on the money they payout on Cds and savings accounts versus the amount they charge on loans. Insurance companies make money the same way – on their portfolios.

The problem was when the recession – depression hit many companies either stopped their interest payments on their bonds or outright defaulted. This has put a crunch on some insurance companies that may have been leveraged to highly. This new seed of investment help from the government should help these companies buy up more corporate and government bonds. While it still makes sense to have insurance companies as a part of an overall investment plan it also makes sense to diversify between different companies and different insurance products. You also want to check your state to find out what the actual coverage is in case an insurance company does go into receivership. As an example in Florida the amount each person is covered for is $100,000 for an annuity contract. 

Here we are in another day of la-la land with the U.S. and their drug policies. As I was doing research on the portfolios today I noticed some rather odd gyrations within the pharmaceuticals. When I looked further I noticed that just overnight six very popular drugs have doubled in price. As an example Ambien went up 160% in price. Do I have an answer for this, no. I will say that it is primarily a problem with the U.S. Last June (2007) I traveled to Germany to get back surgery done because the cost of this in the U.S. would have been five times as high as it was in Germany. The greatest part of it was it was a single price of 34k. This included everything from the surgery, the post-op and the drugs. If you have ever had any medical work done in the U.S. be prepared to pay $40.00 for a roll of surgical tape. That is another story where a local hospital did in fact try to charge my insurance company $40.00 for surgical tape – until I complained that I could get a roll of hockey tape for $2.00.

Here is the problem:

1) When you are retired or you are going to retire plan on needed a nest egg of about $225,000 per person for medical expenses. (Assuming you retire at age 60 – if you retire earlier it will be more)

2) Plan on an average annual increase of 15% on all medical expenses.  (This sounded good until the 100% increase overnight on drugs)

3) Plan on a 7 out of 10 chance that you will in fact need long term care before you die.

I dont know about you but getting older is really expensive. If you have had an experience with medical expenses ruining someone retirement leave a comment.

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Also check out the other post/article I wrote on Medical Expenses in retirement at

http://www.kenhimmler.com/2008/08/06/healthcare-in-retirement

What health care benefits are available in retirement?

Medicare

In general

Medicare

is a federal health insurance program created in 1965. Medicare primarily assists those who are 65 or older, but if you are disabled or have kidney disease, you may be eligible for Medicare coverage no matter what your age. Medicare currently consists of

Part A

(hospital insurance),

Part B

(medical insurance),

Part C

(which allows private insurance companies to offer Medicare benefits), and

Part D

(which covers the costs of prescription drugs), with each part having its own eligibility requirements. You may qualify for one or more parts, or you may choose to accept or decline coverage if you are eligible. Many health policies limit coverage for Medicare-eligible individuals regardless of whether they have accepted Medicare coverage.

Medicare benefits for disabled individuals

Under certain conditions, the disabled are eligible to enroll in Medicare before age 65. If you have been receiving (or have been entitled to receive) Social Security disability benefits for at least 24 months (not necessarily consecutively), you may be eligible to enroll in Medicare. To enroll, you must be entitled to benefits in one of the following categories:

·         A disabled individual of any age receiving worker’s disability benefits

·         A disabled widow or widower age 50 or older

·         A disabled beneficiary who is older than age 18 and receives benefits based on a disability that occurred before age 22

In addition, Medicare may be available at any age if you are disabled as a result of chronic kidney failure requiring dialysis or a kidney transplant. For more information, see

Medicare Benefits for Disabled Individuals.

Qualified Medicare Beneficiary program

If you have limited means, you may be eligible for the Qualified Medicare Beneficiary (QMB) program. Here, your state’s Medicaid program may pay for your Medicare Part B premium, Part A and Part B deductibles, and coinsurance requirements. Eligibility rules may vary from state to state, but in general, you must meet the following three criteria:

·         You must be entitled to Medicare Part A

·         Your income must be at or below the national poverty level

·         The value of your assets must be below a certain level

There are also other related programs that have somewhat less restrictive eligibility requirements. For more information, see

Qualified Medicare Beneficiary Program.

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