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Health
Most people need a comprehensive health care policy because most of us can’t afford to self insure our medical expenses in the event of a serious accident or prolonged illness. A comprehensive medical plan provides basic hospital and surgical expense coverage as well as major medical coverage. Major medical protects you against the financial catastrophe caused by unlimited liability for medical expenses – which is what you have if you have no health insurance. Become aware of these provisions: Lifetime Maximum Benefit: Your policy should provide a maximum benefit of at least $2M. The best policies offer 5M+ in benefits for you and your family. The bottom line question to ask yourself is what are you realistically able to pay for and what is your comfort level of risk sharing? Deductible: This is the amount of money that you must pay before the insurance company begins paying their portion, in other words, your share of the risk. Health insurance policies typically call for a deductible ranging anywhere from $250 to $3,000 or higher. Increasing your deductible will lower your insurance premium in most cases, but your “emergency” fund must be able to cover your deductible. An alternative is to consider an underlying supplemental policy to draw on, say for example an accident policy that pays $500 if you go into the hospital due to an accident. Prudent planning uses higher deductibles to save premium dollars and uses part of the savings to purchase higher limits, fund savings accounts or buy inexpensive supplemental coverage. Coinsurance: Review the co-insurance obligations under the policy you have selected. After you pay your deductible, your policy will pay a percentage of “covered expenses” or “reasonable charges”. You must co-insure the remainder up to an annual maximum amount. Fortunately and of utmost importance, most policies offer a maximum out-of-pocket expense limit. This is an important number to look at as it theoretically represents the total amount you will have to fund in the event of a catastrophe. Max-Out-of Pocket or Stop Loss limits is the amount of covered charges to which the co-insurance provision applies. One hundred percent of covered charges are paid by the insurance company after this limit has been satisfied. You can get there 80/20, 70/30, 60/40, etc. The point is you have to get there before 100% co-insurance kicks in, so it is a very important number. Make sure you know the per person vs. the per family ratio. If you qualify, you may be eligible for a Health Savings Account [HSA.] An HSA is a recent creation of the Tax Code developed as a solution to high medical insurance costs. First, a high deductible health insurance HSA plan must be purchased from an insurance company. Next is the creation and funding of the HSA with a written document using an approved HSA trustee [insurance company or bank]. The HSA account can then be funded with an amount equal to the annual deductible but subject to limits & exclusions set up by the IRS. [Ask your tax advisor if this is a viable option for you.]. The contributions are tax deductible [kind of like an IRA]. Distributions from the savings account for qualified expenses are not taxable, the account grows tax-free, and withdrawals are tax-free as long as you use the money for qualified expenses and the money rolls into the future. It makes a lot of sense if you qualify. A health insurance policy is simply a contract between you [an individual or a group] & a health insurance company where the insurance company agrees to provide you with specified benefits at an agreed upon price for an agreed upon period of time. It is protection against unlimited medical expenses. Dental Insurance Good oral health is a quality of life issue. Dental insurance should be investigated carefully & with two goals in mind. The first is to find a plan that promotes good dental hygiene and preventative care, both of which are important elements of dental health. The second goal should be to provide dental care in a convenient, value-conscious manner, thus providing many dental services at reduced costs. There are basically two roads to travel down in this area – you can choose a discount plan or an insurance plan. Discount plans are simply a conglomerate of dental providers who have agreed to provide dental services to the members at a discounted rate. These plans can be very effective and are usually inexpensive. They work great for a lot of people. Be aware though, that although many advertise “up to 85% discount” it rarely happens. Most truly specialized areas, such as orthodontia, are usually only discounted by 20%. Read the small print [as the big print can be misleading] and check out their network in the area where you live. Most require that you make a commitment of 12 months. A dental insurance plan, will actually reimburse you a portion of the actual expenses incurred in accordance with the policy schedule. Typically, dental polices break down dental services into three categories: Preventative, Basic and Major. These three will be reimbursed at different percentages. For example, the most common is what is known as a 100/80/50 plan. That means that Preventative services are reimbursed at a rate of 100%, Basic services at a rate of 80% and Major services at a rate of 50% - keeping in mind that all policies will have a maximum benefit either per year or per lifetime. Some policies require that you go to a network provider, others don’t. Some give you a better reimbursement rate if you stay within the network, others don’t. Keep in mind however, that if your expenses are reduced by remaining in a network, your actual benefit dollars will go further. Be conscious of waiting periods as they relate to the services you need. Usually, preventative care has no waiting period while basic and major do. Be aware of these points and bear in mind, that more often than not, dental insurance plans are more expensive than discount plans. Short Term Medical Short Term Medical [STM] or temporary health insurance is individual health coverage that provides you, your spouse and your children with essential, basic protection against unexpected accidents or illnesses while in transitional periods. STM does not cover pre-existing conditions and is limited in different ways by different companies. It comes in various benefit periods with various deductibles giving you the opportunity to choose what best suits your needs. Different insurance companies have different rules to play by. Some make you pay up front for the entire period you have selected while others let you pay monthly. Some carriers let you reapply a limited number of times, others don’t have a limit. However, be aware that re-application would automatically exclude pre-existing conditions. Technically, there is no continuous coverage between terms. Eligibility requirements also vary between companies. If you are in need of immediate coverage for a short period of time, I can guide you navigating the maze.
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