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sjj14
01-27-2005, 05:20 PM
With a little down time in the winter I am reviewing all insurance plans etc. for my business and was wondering if anyone has a good recomendation for Health ins. for small bus. owners. I currently have a typical Aetna HMO but am looking for options. No employess just me and my family. Thanks for any feedback.

philk17088
01-27-2005, 05:39 PM
With a little down time in the winter I am reviewing all insurance plans etc. for my business and was wondering if anyone has a good recomendation for Health ins. for small bus. owners. I currently have a typical Aetna HMO but am looking for options. No employess just me and my family. Thanks for any feedback.
I'm looking into a Medical Savings Account and getting out of a traditional plan. I'm sick of the premiums and high deductables payup

bobbygedd
01-27-2005, 06:57 PM
phil, i checked one out, briefly...a bit of a crock, isn't it?

mastercare
01-28-2005, 02:06 PM
HSA's are the future of health insurance. However, your post sad that you're tired of deductibles! With an HSA you still buy a health isurance plan, and get it with the highest deductible possible. This is what makes the premium so low....the insurance won't kick in until you've met your monstrous deductible.

This is where the savings account comes in. You take the money you saved on premium and put it into a tax sheltered account. You should really put more than just the "savings" in there. When you incur medical expenses, you can use that money tax free to meet your deductible or copays. Any money you don't use, gets rolled over to the next year. So, the idea is this: You save up about $5000 into this savings account, and use the highest family deductible you can get (about $5k). If you don't use the money, you don't HAVE TO continue to contribute to it....becuase the money will be there next year should you need it. If you never use it, you can pull it out at retirement (actually age 62) and use it just like a traditional IRA. You pay taxes on it as ordinary income, but its a great way to set aside money, and if you don't use it, its yours to keep during retirement.

The catch is if you start this High Deductible Health Plan, and you have a medical bill before there's enough built up in the Savings account. Then you've got a huge bill and no money saved up. If you stay healthy for the first year or so, or you can open the account with a big lump sum up front, you're all set.

When I'm not cutting grass....I'm a financial advisor here in MI. I have sold these plans, and traditional health insurance, Life insurance, investments, retirement accounts. etc. Feel free to PM me with questions.

bobbygedd
01-28-2005, 02:38 PM
if i start this plan tommorow, and on monday have a bad accident, running up $40,000 in hospital bills, how much of that 40k is my responsibility? how much will the ins company pay?

mastercare
01-28-2005, 03:23 PM
Bobbygedd,
That all depends on what health plan you choose. Typically, when dealing with an HSA, you couple that with a HDHP (High Deductible HEalth plan). Of course, the higher the deductible, the cheaper the insurance premium, but the more you'll be responsible for.
A cheapest (typical) example would be that you would get coverage for your family. You would have a deductible for your family of $5000. That means that on a $40,000 hospital bill, you would pay your deductible first (out of your HSA) of $5000. The other $35,000 would be covered by the actual medical insurance. Then, your family has met its deductible for the year, and every time you go to the Dr.'s your insurance will pick up 100% of the coverage for the rest of the policy year.
It all depends on how you set it up. You could get a plan with only $1000 deductible, which means you pay the first $1k. But, of course that health plan is more expensive becuase its more likely the insurance company will have to kick in.
People with a long history of medical problems and accidents shouldn't buy this policy. But, it is perfect for the people who just see the Dr. when they get a cold once a year. You'll end up paying for that one visit out of your own pocket, but you've got an insurance company backing you should anything major happen.
Let's say for example that you pay $500 a month now for insurance, and you want a HDHP. Your premium may drop to $250 per month. The other $3000 (250*12) that would have otherwise gone to the insurance company sits in a tax-sheltered savings account for medical expenses. Lets say you go the Dr. for a cold, and your bill comes to $300. You pay that out of your $3000 savings, and at the end of the year you have paid:
$250 * 12 = $3000 in premiums
$300 in deductible

Total = $3300 for the year. ....AND you have $2700 sitting in an account which is yours to use for medical expenses, or retirement

If you stay with your old plan: $500 * 12 = $6000 spent on health care, and that money is gone.

Now to go one step further, next year you start with $2700 in your savings account. Lets say your family deductibl is $5000. Now you can pay your $250 a month, and you're not REQUIRED to put anyhting into your savings account. Of course, you'll want there to be enough to cover your max deductble....but that's your choice. Once you build the account to your max out of pocket, you could continue to contribute, or just leave it as is knowing that your max out of pocket has been covered for the year;.....The only thing you're required to pay is your premium....your savings account can hold any balance you feel you need on hand to cover medical expenses.

By the way....did I mention that all contributions to your Health Savings Account are (usually) Tax deductible?

bobbygedd
01-28-2005, 03:29 PM
that almost seems like a "trick" or incentive for the insured to NOT go to the doctor, therefor, the insurence company reaps the true benefit. another question...i called a "broker" i guess you would call him, and asked about just hospitalization coverage. in other words i'll pay for everything out of my pocket, i just want to be covered in emergency situations (surgery, hospital stay, emergency room, etc.) he claims there is no such thing. any input?

mastercare
01-28-2005, 03:38 PM
Your "broker" couldn't find anything becuase his commission isn't worth the time spent filling out paperwork to get you the coverage!

Yes, basic hospitalization does exist. It is incredibly cheap, and therefore most financial professionals don't sell it. For example, I had a friend who was down and out and lost her job. I set her up with one of these plans. It cost her $28 per month. My commission was about $1.05 per month!! That's why he can't find one!

Now this is the simplest and most basic coverage someone can buy. It only covers you if you are hospitalized. Won't cover Dr.'s appointments, physicals, emergency visits, or any of that stuff. And, if you make 1 claim, they will cancel your coverage after they've paid the bill!! But, that's why its so cheap.

It's basically catastrophic coverage. Any colds/injuries or such won't be covered (the reason we usually get medical help). It typically has about a $1000 deductible for the hospitilizaiton.....they pay the rest of the bill. Once you're out of the hospital for that incident....your coverage terminates. Very cheap, very foolish way to cover medical expenses...BUT if you don't have 2 pennies to rub together and need some type of coverage, its better than nothing.

mastercare
01-28-2005, 03:41 PM
Sorry, Forgot to metion:

A company called John Alden (a Fortis company) sells a lot of these policies. They have minimal underwriting, and your payment is calculated right out of the pamphlet describing the policy. Very cheap, very easy to set up. But, again, if this is all you can afford, its better nothing, but definitely a LAST option when it comes to health insurance.

bobbygedd
01-28-2005, 04:51 PM
do you think the coverage i have now is "foolish?" i have oxford. i pay $1000 a month for med/prescription. last year i paid $12,000 to this plan, and had perhaps 5-7 doctors visits(our family of 4), which would have cost us maybe $700 (if we had no insurence). if i chose to not carry ANY COVERAGE, i'd be ahead by more than $11,000. so i can get hospitalization for $25 a month. have a heart attack, they pay the $60,000 in bills, then drop me? that don't sound too bad.....

mastercare
01-28-2005, 05:07 PM
No, I would say that what you have now is a good plan. It covers just about anything, including perscriptions. Here's the problem I see with the short term. Lets say you get in a car accident and sustain injuries. You get rushed to the hospital, have some type of surgery, spend a week in the hospital and go home. At that point, your coverage is gone. Any post-work you need done is not covered. Any long-term rehab is not covered. Any pain medication after you leave is not covered. Any long-term problems are not covered. Any other problems arising from that injury are not covered.

And, to top it all off, you could apply for a "full coverage" policy after you're dropped. They will research your medical history and either charge you way too much, or more likely put an exclusion on that policy for pre-existing conditions. This means they don't pay a dime.

The policy you have is the smart way to protect your family. If you had no other options, the catostrophic coverage is better than nothing. But, it sounds like you havea good policy now....you may be able to save some $$ on your premium somewhere else, or with a different kind of plan, but full medical coverage is the best you can get as long as you can afford it.

bobbygedd
01-28-2005, 05:14 PM
mastercare, the policy i have right now, cost me $12,000 last year, for $700 worth of medical expenses. i paid $11,300 for "peace of mind", mathematically, it was A DUMB INVESTMENT.

scottt
01-28-2005, 06:16 PM
bobbygedd,
What happens if you get the catastrophic coverage only and you have an accident and run up a 75k hospital bill? Your company will drop you after they pay. Then say a month later someone else in your family has an accident and the bill is 75k. Then you have recurring medical bills from your accident that even if you could find insurance they probably wouldn't pay due to a pre existing condition. I'm not saying which one to choose, just something to think about.

TSM
01-28-2005, 11:36 PM
mastercare, the policy i have right now, cost me $12,000 last year, for $700 worth of medical expenses. i paid $11,300 for "peace of mind", mathematically, it was A DUMB INVESTMENT.

i understand what you're sayin.

but by definition that is insurance.

i have homeowners insurance and have never filed a claim
i have general liability and never a claim
workers comp...never a claim
auto insurance and other than glass replacement never a claim
health insurance and compare the premiums to the actual cost of doctors...and i'm out a whole lotta $$$

but whats the alternative???

there is a reason why any city you go to in America and the biggest,tallest , fancyest buildings are owned by the insurance companies.

sux

sjj14
01-29-2005, 11:38 AM
mastercare, my main question regrding an HSA is what will i be paying for normal dr. visits and presscritions? I realize that the big booys have contracts with these Dr. groups and agree to except the payments that are prenegotiated for visits and drugs. Will I be paying an outragous amount for a simple visit and prescription? for example, a recent bill from a dr. visist for my wife included some rehab visits. The bills showed a rate of $75 for icebags(this actually happened) but my insurance only payed 12 cents per bag. If I am going to pay the $75 rate the $5000 in my HSA account will not go very far. Its and intersting concept but leaves alot of questions. If you dont mind I will pm you with some more questions.
Thanks, Steve

mastercare
01-31-2005, 02:50 PM
Yes, I got your PM, but didn't read your public post, so I'll respond to the questoin in your public post:

How much will it cost? You will pay every penny of medical costs up to your deductible ($5000 for a family...if that's what you choose). Now this seems ridiculously expensive, but you have to remember that this money came out of your Health Savings Account.

If you had a traditional plan, you would be paying a larger premium. If you never had that expensive ice on your dr's visit, that money would have gone to the insurance company and be gone forever.

If you can set it up so that the combined Savings account and High Deductible health premium equal your old cost, you will be ahead. Big sums of money will come out of your savings account, but that was money you otherwise would have given to the insurance company in the form of premiums, whether you used it or not.

This way, you pay less to the insurance company, and "self-insure" against your deductible by putting the excess money in a savings account. If you use it, you're no worse off. If you don't use it, you keep the cash that's in th account. It can even help subsidize your retirment income if you build it up and use very little of it over the years.

To sum up:
On a traditional plan all your $$ goes to the insurance company if you use it or not.

On an HSA, less money is kept by the insurer, and you use your own money to insure against paying a high deductible. If you use it, you're no worse off. If you don't use it, you have saved the $$ that the ins. company would have kept anyways.

Do you have a $0 deductible on your car insurance? - Probably not becuase you're willing to accept a $1000 deductible to get a lower bill. HSA's work the same, but on a larger scale, and they give you a savings acount to save up that deductible on a tax-deductible basis.