$$$ WHERE DO HEALTH CARE DOLLARS GO? $$$

I attended a luncheon last week with a fantastic guest speaker, Scott Kreiling, President of Regence Blue Shield of Idaho.  He shared some fantastic information regarding healthcare costs.  I will try to disseminate it here and share some links to their web site where additional information can be obtained.

...and here is another chart from their website:

Although this information is interesting, it gets even better.  The folks at Regence have established an education plan to help us realize where the real cost of insurance comes from, http://www.whatstherealcost.org/ and they share steps that we can take to personally reduce the overall cost of health insurance.  www.regence.com/industry/what-drives-up-health-care-costs.jsp#

Regence also provides a website for their customers to help them set healthy goals and accomplish them.  www.MyRegence.com

SAVING MONEY ON INSURANCE: CAN IT BE DONE?

Image by Toban Black via Flickr

Saving Money on Insurance: How Can It Be Done?

In the throes of an economic recession, millions of consumers today are cutting back on discretionary spending—and are even tightening up on the necessities. Now is an excellent time to review your insurance coverages with your Trusted Choice® independent insurance agent to find ways to cut costs while still protecting your family or business.

The premiums paid for insurance are a tremendous value. For instance, for the cost of several hundred dollars annually, a homeowners insurance policy provides a family with the means to rebuild its home and reimbursement for the cost of temporary housing should the home be destroyed in a fire.

To consider how to cut expenses, it’s helpful to take a step back. Consider anew what insurance premiums are paying for the transfer of risk. Insurance is a unique tool that allows consumers and business owners (through a financial transaction and a legal contract) to transfer risk from the consumer or business owner to the insurance company. If you transfer less risk—either by reducing the risk overall, or retaining more of the risk yourself—the insurance carrier will charge less.

Your Trusted Choice® insurance professional can help you consider two important questions if you want to cut costs on insurance:

1. What risks might I be paying to insure that I can assume myself?

The risk profile of a family or business changes over time. It’s important to share with your Trusted Choice® agent if the family or business situation has changed recently.

One thing that changes is the financial risk a family faces as children are born and grow. Parents of newborns face a lot of financial risk, since they face 18-plus years of raising that child and, for many, paying for a college education. Life insurance is the common way to protect against the risk of a parent dying while a child is in school. Yet, when the child graduates, a parent might reduce the amount of life insurance they own—and thereby reduce the amount of premium they pay. Inform your insurance agent if these changes are occurring for you.

For homeowners insurance policies, the first place to look to trim expenses is the deductible, which is the amount of money the policyholder must pay before the insurance company starts to pay a claim. The higher the deductible, the lesser the premium will be for the policy. A consumer with a $500 homeowners deductible can save as much as 25 percent by raising it to $1,000, reports the Insurance Information Institute. A policy with a higher deductible is less likely to have claims, in part because consumers that bear more risk tend to be more careful and have fewer claims.

Auto insurance customers can ask their Trusted Choice® agent about whether they can save money on state-required PIP (personal injury protection) coverage. If you have already have health coverage, you may be able to keep only a minimum level of PIP—but it’s important to consider state requirements and whether your health insurance company will allow this.

2. Have I taken advantage of all the discounts offered?

The market for personal lines insurance is highly competitive. This has kept costs down: Homeowners/tenants insurance costs increased by about 17 percent between 1999 and 2008, compared with a 57 percent increase in the cost of repairing household items and a 50 percent increase in legal services, according to the U.S. Bureau of Labor Statistics.

Auto insurance carriers offer special programs that help consumers keep a lid on costs. Ask your Trusted Choice® agent about discounts for having a homeowners and auto policy with the same carrier; for maintaining a claim-free record for consecutive years; for low-mileage drivers; and for young drivers who keep good grades.

For older vehicles, consider dropping collision coverage. Since auto insurance claims occur about once every 11 to 12 years, it may not be cost-effective to insure a vehicle that is worth less than 10 times the collision insurance premium. (In this case, the claim reimbursement likely would not exceed the premium minus the deductible amount.)  Ask your Trusted Choice® agent what the cash value of your older vehicle is, to help you decide.

One caution: The slump in housing prices has tempted some consumers to cut the amount of insurance on their homes, but that’s a trap. Homeowners insurance should be based on replacement cost, not market value, and many homeowners are already underinsured. Replacement costs continue to grow steadily, year after year, regardless of market values. Your Trusted Choice®  agent can help you determine the proper amount of homeowners insurance for you.

Finally, your Trusted Choice® agent also can help by shopping your insurance needs to a number of insurance carriers. If you haven’t done so in three years, now is a good time to ask if your policies can be reviewed to make sure your pricing is the most competitive available.

IS YOUR HEALTH INSURANCE RIGHT FOR YOU?

Your health is way too important to leave to chance. That’s why it’s critical that you have health insurance and that it is the right fit for you and your family. Unfortunately, millions of Americans do not know if their health insurance plan will cover their needs—or how to secure better coverage.

A good health insurance plan—one that covers every potential need—goes a long way toward providing peace of mind and helping avoid a financial burden that otherwise would saddle you and your family with payment of major medical expenses. Ideally, you should have a more comprehensive plan that provides coverage for hospital, surgical or routine medical expenses. But, at minimum, your health insurance policy should cover major medical expenses resulting from catastrophic illness or injury.

Many Americans secure health insurance through their employer; others are not so lucky. But even if you have a primary policy, be aware that group benefit plans do not always provide all the coverage for your needs. You may want supplemental insurance or a health savings account (HSA) to help fill the gaps.

For those purchasing their own primary or secondary health insurance policy, the options can seem confusing and expensive. So, how do you know if your health plan is a good fit for you? Here are some tips:

1.    Evaluate your family’s needs. Consider your family’s lifestyle and medical history, and try to anticipate life-stage health events, such as braces for your pre-teen and glasses for your self. Wife turning 40? That means mammograms every year.
2.    Prioritize those needs. For example, vision care may be a good benefit for your family, but not as essential as a prescription-drug plan. List your must-haves as well as your nice-to-haves.
3.    Review plan options. For each plan you are considering, ask about key coverage provisions: Does the policy cover major medical expenses only? If your family needs preventive, dental and vision care, does the plan provide them? Does it include a prescription drug plan? Do any of these must-haves need to be purchased separately? Are your current doctors in the plan? Does a family member have a pre-existing condition and will the plan cover it?
4.    Determine your costs. Premiums are not the only costs you should consider when looking at a health insurance plan. Take into account the expenses you may have to assume beyond paying the premium, such as deductibles, coinsurance and co-payments. Are there added costs for using an out-of-plan doctor or hospital? Consider increasing your deductible for a lower monthly premium.
5.    Consider an HSA or FSA. An HSA provides two benefits: a tax write-off and a health coverage benefit. The health benefit provides coverage when you are sick or injured and the savings mechanism allows you to accumulate funds that you can use to pay for care for illnesses or injuries not covered by your insurance. An added benefit of an HSA is that both the cost of the health plan and your contributions are tax-deductible. Similarly, a Flexible Spending Account (FSA) allows you to set aside pre-tax dollars to cover medical expenses, which can help lower your taxes.
6.    Know the differences of PPOs & HMOs. Individuals in a health maintenance organization (HMO) must choose a primary-care physician from a provider network. This physician is responsible for routine medical care and must refer you to specialists. HMOs typically provide no coverage for services from physicians outside the network. Meanwhile, individuals in preferred provider organizations (PPO) do not choose a primary care doctor and do not need referrals. They can obtain coverage from physicians outside the network but the PPO likely will reimburse less for the services. PPOs require deductibles and co-payments; HMOs don’t have deductibles but participants must pay co-payments. Again, be sure your family’s doctors are in the plan you select.
7.    Get coverage today. Health insurance, much like life insurance, is usually less expensive for younger people. So, get your coverage now to secure a lower premium and be sure to maintain your coverage.
8.    Use it. Use your insurance for preventive care and wellness to decrease your risk of needing more serious medical treatment. Schedule routine doctor visits and get the regular tests that physicians advise for your age and condition. Take advantage of the discounts offered by some plans for gyms and weight-loss programs. Seek help for smoking or alcohol abuse.
9.    Don’t let it lapse. If you lose or leave your job, you may be eligible to take advantage of a COBRA plan. Even though you’ll be footing the whole bill for your health insurance, you’ll be getting the employer’s group rate and retaining coverage for 18 months. If you go without insurance for more than 60 days, it can be trickier and more expensive to purchase health insurance down the road.
10.    Stay current. Coverage can be affected by life’s changes—if you get married or divorced, for example. And keep in mind that your children will not be covered by your plan indefinitely; generally dependent children lose coverage at 19 (or 22 if a full-time student).

With so many options and pitfalls to consider, talk with your Trusted Choice® agent to ensure you are securing the most appropriate coverage for you and your family.

WHY PURCHASING A PERSONAL UMBRELLA POLICY IS A WISE DECISION

One of the most important insurance policies you can buy is the personal umbrella policy, but many people are unaware they need one. This policy provides high limits of liability to protect you against a catastrophic liability loss. It pays after your homeowners or personal auto policies’ limits have been exhausted. For example, a major car accident in which you severely injure sev-eral persons can result in damages easily exceeding your personal auto policy’s liability limits. Losses that result in injuries to numerous people, head injuries, and death are often covered by a personal umbrella policy. In addition to providing higher limits, this policy normally pays for some losses not covered by the underlying policy, such as legitimate allegations concerning libel or slander.

Personal umbrella policies are growing in popularity. In the past, only wealthy individuals and families purchased this coverage. Today, middle-income families also may procure this policy for protection in our society’s increasingly litigious climate. As the tendency to sue for damages rises and awards granted by the courts grow, the personal umbrella policy is increasingly seen as an insurance necessity, rather than a luxury. It is especially attractive because of its relatively low cost.

In particular, you should consider purchasing a personal umbrella policy if you have certain
characteristics or engage in certain activities, including the following.

• Your total assets are greater than your underlying liability limits.
• You are financially responsible for the actions of a young, inexperienced driver.
• You live in an exclusive and affluent neighborhood.
• You have a high profile career or high income.
• You frequently host guests on your property.
• Your residence includes a swimming pool.
• You own waterfront property, a farm, or a ranch.
• You own watercraft or aircraft.
• You own numerous rental properties.
• You engage in extensive international travel for pleasure.