Insurance World

Deciding which individual and family health insurance plan is just right for you and your family can seem as challenging as judging which apple is the very best out of an entire barrel at the supermarket. The apples are all different sizes, shapes and colors, and the health insurance plans all offer different fees, types of benefits, and levels of coverage.

For many people, the group health insurance plan sponsored by their employer offers them the most affordable coverage. Group health insurance is exactly what it sounds like: a health insurance plan or plans offered to groups of people through their employers. Individual and family health insurance, on the other hand, is offered to individuals and families instead of employer groups, and it can be a much more attractive and affordable option than many people believe.

Because individual and family health insurance is not offered through an employer, those who choose this type of insurance will pay the entire cost of the regular premiums. However, there is a wide range of plan types available, allowing smart consumers to maximize the coverage they are receiving for the money they’re investing in the plan. In some situations, they may even be able to save money compared to what they would have spent in premiums for an employer’s group health insurance plan. Either way, consumers should never forget that the money they’re spending each month for health insurance is 100% tax-deductible.

There are two basic types of individual and family health insurance plans: indemnity and managed-care. An indemnity plan gives its policy holders more freedom to choose the source of their health care, allowing them to receive treatment where and from whom they choose. It is also likely to require them to pay out-of-pocket for the services they receive and file the paperwork themselves in order to be reimbursed. Many indemnity plans also require higher deductibles that must be met before the plan coverage will begin, and they also pay claims based on a percentage of the cost for the care. Managed-care plans, on the other hand are usually based on a network of approved health care providers from whom their policy holders can receive treatment. Because this network of providers has, in most cases, agreed to provide the treatment at a pre-set price, the care will cost less out-of-pocket for the consumer. The paperwork is generally taken care of by the health care provider instead of the policy holder, and the care is covered with only a low percentage coinsurance or set co-payment amount required from the policy holder.

There are three types of managed-care plans: HMOs, PPOs, and POS plans. These options are all based on provider networks and require their policy holders to pay for their health care depending on their tendency to seek care from in-network or out-of-network providers.

In each category, there are dozens of available plans offering different levels and types of coverage that allow users to choose based on personal needs. Many plans require a deductible amount to be met for each plan year before coverage begins, and monthly premiums are likely to be lower for plans that have higher deductibles. This along with other factors affects how much the plan will cost the consumer to use. Therefore, a person who expects to seek health care only a few times a year will likely benefit by choosing a plan with a lower monthly premium. On the other hand, those who seek routine care and have a history of more physician visits, and/or who regularly fills expensive prescriptions, can best serve their medical needs with a plan requiring a higher monthly premium and low or no deductible.

These are not the only factors that should be considered when choosing a plan. Someone who travels often may want to consider the possibility of needing to seek care while far from home and the advantages of an indemnity or a more flexible managed-care plan, so that unexpected out-of-network expenses can be covered. Women who expect to become pregnant during their plan year must carefully study the coverage offered to them during pregnancy and delivery. No plan is right for everyone; that’s part of the reason there are so many from which to choose.

Making a smart choice requires thorough study of the plans available. The needs of every person who will be covered by the plan should be taken into account. With careful consideration and planning, those needs can all be met affordably through family and individual health insurance.

Don’t let your LTCi be a disappointment
“I have $100 a day for life,” Gloria, one of my clients, complained. “Why do they only give Carolyn $25.00 a day?”

Gloria owns several policies with my company. However, her LTCi, which she is currently using, is with a different company. Carolyn, her home health aid, receives limited pay because Gloria’s policy includes only 50% home care. While Gloria would receive $100 a day indefinitely in a nursing home, she can only get $50.00 a day for home-care. Furthermore, since Carolyn does not work through an agency, she is considered “non-professional” and will be paid no more than $5.00 an hour. To make matters worse, Gloria is still paying her full monthly premium because her policy does not include a waiver of premium unless she is in a nursing home! This situation could have been avoided.

Take action to protect your interests
Long Term Care insurance, a type of protection that pays the bills when a person needs extended care either at home or in a nursing home, should be part of senior planning for every adult who owns property, investments or savings–or who simply wants to protect freedom of choice, independence, and family harmony. Nevertheless, 65% of adults over 40 admit to having made no plans for long term care for either themselves or a spouse, according to Genworth Financial.

Put the excuses on the table
The first excuse for putting off the purchase of LTCi is money, but the real reasons are usually a matter of denial–you don’t really believe you will ever need it–and confusion over the mountain of information. Numerous companies offer LTCi insurance, and while the policies are similar, the language can vary significantly from one company to another. Make one inquiry, and multiple packets crammed with information will soon fill your mail box. You don’t know what to do, so you do nothing.

LTCi: Basic coverage and features
Fortunately, understanding LTCi is not as difficult as it seems. However, it is not a one-size-fits-all program, so doing it on your own or over the phone is not a good idea.

Basic coverage
All LTCi begins with the basic coverage–a maximum dollar amount per day multiplied by the number of days of coverage. The actual premium is then based on your age. For example, a three year, $100 per day benefit would give you 1095 days times $100, or a “pot of money” of $109,500 to spend. Even though most nursing homes charge more than $100 a day, your pot will last at least three years because you can’t spend more than $100 per day. Once the company has paid $109,500, your policy is exhausted, and you will have to pay for additional care yourself.

The other part of your basic coverage is the elimination period, a deductible consisting of a set number of days that you must pay for care before your policy will start paying. Some companies go strictly by the calendar, others go by the actual days you received care. A longer elimination period reduces your premium.

Feature 1: Home care
Features are benefits included with no extra cost. For example, most companies can offer a choice of whether you want to include care in your home. It may be included at a slightly higher premium, or it could be a rider, depending on the company. You can also choose 50% or 100% home care. If you choose 100%, you can spend your maximum of $100 per day for care in your home. Furthermore, while nursing home care has to be calculated on a daily basis, most companies calculate home care by the month. You could thus spend $50 one day and $200 another day, so long as you do not go over $3100 per month (in our $100 per day example).

Feature 2: Waiver of premium and discounts
Most companies will waive your premium when you have to start using your coverage. Some waive the premium from day one while others require you to be on claim for at least 90 days first. If you should get well and go off of claim, your premium would resume. Some companies waive the premium for both spouses if just one goes on claim. However, nearly all companies give a discount if husband and wife are on the same policy.

Feature 3: Restoration of Benefits
The best companies include a restoration of benefits feature, meaning that if you only need care for a few months and are able to go off of claim, your entire pot of money is “restored,” giving you the full policy to use again when you need it. However, the pot can only be refilled if it has something left in it–even as little as $50.00.

Feature 4: Home modification
Many companies will pay several times your monthly benefit to modify your home with things like wheel chair ramps, widening of bathroom doors, or rails in the bathtub or around the commode.

Feature 5: Caregiver training
Do you have a family member who is able and willing to participate in your care? Some companies will pay several times your daily benefit to train that person who will then take care of you at their own expense, making your policy benefit last much longer.

Feature 6: Respite care
Respite care is simply a vacation for a family member who has agreed to help take care of you. For a certain number of days each year, a company will put you in a nursing home or find someone else to take care of you, and the company will foot the bill up to your maximum daily benefit.

Feature 7: Equipment rental
Equipment rental is simply the rental of hospital equipment–such as a hospital bed–usually up to the purchase price of the equipment.

Feature 8: Adult day care
The better companies include adult day care where you can get therapy and interact with other seniors. Usually transportation, meals, therapy, and help with activities of daily living are included.

Feature 9: Prescription drugs
The inclusion of prescription drugs–of the type given in a nursing home or hospital–is a very important feature, but many companies only include drugs with a rider. Ask about it.

Feature 10: Room reservation
What if you get sick while you are in the nursing home and have to go to the hospital? The room reservation feature reserves your bed for a certain number of days each year.

Feature 11: Hospice and ambulance
Medicare pays for the nursing needed during hospice as well as for a certain number of ambulance trips per year. However, most LTCi policies offer some additional ambulance dollars as well as the home health aid and domestic services if you are on hospice.

Feature 12: Patient Care Coordinator
Companies have different names for this, and many don’t offer it at all. A patient care coordinator is a person who will work with you to find the agencies in your area. The person will find out what the agencies charge, and will help you choose the appropriate agencies to meet your need. The coordinator can also help you file claims by explaining how to correctly complete the paper work.

Remember, features of a policy are included without extra charge. It’s worth paying a bit more for a policy that includes a lot of features rather than buying something cheap only to find out that benefits you would have liked aren’t included.