News from Pennsylvania

30-10-2011 by admin

So here’s a simple question for you as a fantasy decision-maker in charge of a state’s finances. Let’s say you go to court against Big Tobacco and come out with a big win. Because the court finally agreed to accept the medical evidence, Big Tobacco was ordered to pay money into a massive settlement fund. Every year, this pays out a big chunk of change to your state. What do you want to spend it on? It could be education except you really want to fire all the bad teachers first. Then you can use the extra money to pay higher salaries to attract better people into teaching and raise education standards. Ah, but that’s going to provoke a fight with the unions, so we’d better look for something less controversial. What about health? This would be ideal politics. The tobacco industry has made so many ill, it’s only right its money should be used to improve health care for all. Except how is that going to be done? Even a big lump of change gets lost in the total cost of running health care in a state. . .

Pennsylvania decided to use part of the money to fund adultBasic. This was an outreach plan for adults who would otherwise fall through the cracks. Their income is too great to qualify for Medicaid, but they can’t afford the premium rates for a private plan. The way it worked was simplicity itself. The state funded its own health plan. The actual cost per person was $600 per month, but the state only charged each person $36. The total cost of this plan in 2010 was $166 million. To give you an idea of the popularity of the plan, the state was subsidizing some 40,000 people with half-million people on the waiting list. Remember, there are some 50 million people without any form of insurance across the country. It should not surprise you there were so many people who felt they met the entry requirements for adultBasic in one state.

However, in February, the Pennsylvanian government announced it was looking at a big deficit, so Governor Tom Corbett looked around for cuts. Presumably feeling the 40,000 enrolled in the plan were freeloaders, he ordered the plan shut down immediately. Big Tobacco’s money now flows directly into the state’s coffers and is mixed in with general revenue. Curiously, the state has now discovered it will have a surplus of more than $750 million in the current year. It’s remarkable how quickly the fortunes of a state can turn around. One of the immediate consequences has been a 30% increase in the number of people walking into ERs around the state. This adds significantly to the cost of running the health care services. Ironically, this additional cost alone may be more than the state was spending on adultBasic.

The Democrats have been frustrated at their failure to get adultBasic reinstated. It was one of the few state-funded health insurance plans for the low-income group. Yet a Republican governor will always get political traction out of cutting such a high-profile example of “big government”. Adult Americans should pay for cover out of their own pockets and not look to the state to provide cheap health insurance (even with money from the tobacco industry).

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Health insurance and more plain English

27-10-2011 by admin

It’s a broken record but true. Attorneys are dangerous to a consumer’s health! When you look at their ability to take ordinary English and make it complicated, there are few people on the planet to equal them. The moment a contract is drafted, the choice of words changes from everyday to jargon. The sentences get longer with more clauses. This is not the type of English ordinary people can read easily. Worse, it’s often difficult for people to get hold of the policy before they buy. This is particularly true for the health plans provided by employers. Naturally, in larger companies, there’s probably an in-house attorney who reads the small print and offers advice to the HR Department on whether the plan represents good value for money. But, all too often, none of the employees get to see this plan. The best most can hope for is a summary of the benefits produced by the HR Department – not necessarily the most reliable source of information about an insurance policy. More importantly, the HR Department rarely explains what the real costs are. Employees find out the hard way on the extent of the cover, the amount of any deductible and the extent of the co-payments required.

You will be pleased to know this is changing, thanks to the Affordable Care Act 2010. Yes, Obamacare really does have some good stuff in it. The rules will require insurance companies and the employers who buy their plans to give employees clear written guidance on those plans. This starts with a simple listing of both what is covered and what is not. In most plans, this information tends to be buried with headline benefits undercut by a later listing of exclusions. Now this should be a simple list. It’s the same with costs. The annual premium must be disclosed together with explanations of what you must pay, particularly if you want to go to consult a doctor not in the network. Perhaps even more importantly, the document must be written in clear English and, to help should you ever want to read the plan itself, there should also be a set of definitions where all the jargon words are explained.

We’ve all just seen what happens to property values when mortgage and other loan documents are not explained to borrowers. They get caught out by the language and many default. Foreclosures follow. Although the consequences to signing up to health plans are not quite so dramatic, you can end up with a poor value-for-money plan and big bills for topping up the care from your own pocket. The insurers are, of course, still complaining. They are even saying the premium rates may have to rise to cover the increased administrative costs to produce the explanatory materials.

All this is due to come into force early in 2012 so, if you are in an employer plan, you should get a better insight into the extent of the cover. If your employer offers a choice of plans, it should also help make a better choice. Whether individual or group, health insurance should not be made more difficult than it needs to be. Thanks to Obamacare, we have one less problem to confront the next time we’re asked to decide whether to join a health insurance plan.

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Striking a balance with vehicle cover

26-10-2011 by admin

Buying your auto insurance can be a tricky task, as there are so many different things that you have to take into consideration in order to ensure that you make the right choice. The right auto insurance plan can provide you with peace of mind as well as ensuring that if something happens involving your vehicle in the future you are able to recoup your financial losses or get the issue resolved without being out of pocket, although this will depend on the level of cover that you take out.

There are also many different aspects of cover that you need to look at when you are choosing your auto insurance cover in order to ensure that you get cover that is going to be suited to your requirements. This can be a lengthy task for some people but is something that needs to be done in order to ensure that you are able to find the right cover for your needs and at a price that you can afford.

One mistake that many people tend to make when they are purchasing auto insurance is to look at the cost of the cover and base their decision solely on the price without even bothering to check the level of cover or the benefits and features of the plan. This can be a false economy, as although the cover may be cheaper to buy initially you could end up paying out far more over the long term in the event that your vehicle is involved in an incident.

Some people make the same mistake but in reverse, in that they make sure that they coverage is perfectly suited to their needs but fail to consider the cost of the cover. If you find yourself unable to keep up with payments on your cover your insurance could be invalidated, which could result in you eventually finding yourself in a financial mess if something happens involving your vehicle. This is why it is important to ensure that you look at the price of cover.

The trick to getting cover that is properly suited to your needs is to strike a balance between the cost and the level of cover that you take. It is very important that you take both of these things into consideration rather than focussing all of your attention on just one, as otherwise you could end up taking out inadequate or unsuitable cover or you could end up paying more than you can realistically afford for your auto insurance.

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How much insurance to buy

25-10-2011 by admin

No matter what you think of scientists, there seem to be changes in the weather. There’ve been more violent hurricanes and storms, some devastating tornados, and more flooding than anyone might have expected. Looking around the world, there’s massive flooding across large parts of Asia and don’t forget the earthquakes. First New Zealand and then Japan got hit, followed by a tsunami. When you put it all together, it’s enough to make you think no amount of insurance is ever enough. Guess what? Because you think that, the insurance industry has been bringing out an all-singing-all-dancing package of different policies. If you can think of a way of losing money, the insurance industry has a policy to sell you. The only question is how much insurance should you buy?

This is about paranoia. When you add in the recession, there’s a perfect storm with everything going wrong in the world. The marketers trade on this so, when you see a company offering to sell cover against the value of your home falling, you’re tempted. You see the homes being repossessed around you. Perhaps your own mortgage is underwater. What’s not to like about policy that pays out if your home loses yet more value? Then there’s the company selling insurance against you losing your job. In theory, it pays out your take-home pay if you suddenly pick up a pink ticket. This looks good because, even though you can’t pay off the mortgage, you can at least make the monthly payments. At least, you think you can until you read all the small print and find out just how difficult it is to make a successful claim. Yes, it’s natural to want to protect your family and keep a roof over their heads, but this is not the right time to panic.

Let’s start with the standard policy for the home. You’re insuring the cost of repairing or, if the damage is too extensive, completely rebuilding. To that, add the value of the contents. Depending on the policy, this is the amount necessary to replace like-with-like rather than new-for-old. All this should be reviewed when renewing because the cost of labor and materials keeps on rising even though the resale value of the home may be dropping like a stone. Remember you’re not insuring the land. You’re just replacing what was lost, assuming that’s possible. If your home was to drop into a sinkhole or the plot disappeared in a landslide, rebuilding might be impossible. In that case, you pick up an agreed cash sum.

So, when you’re planning how much insurance to buy, focus on the standard policies and make sure you have everything set up properly so that, if the worst happens, you can make a claim and have it paid. Home insurance cover is not rocket science. Whether it’s good value depends on what the insurer has excluded. Read the policy and do your “homework”. If your research says this is a good deal, go for it. Although it may make you feel more comfortable if you spend your money on some of these more exotic policies, nothing is likely to offer the same value as a traditional home insurance policy.

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Health insurance quotes for children and young adults

by admin

One of the major problems for families has been the age of their children. No matter whether the parents were on private or an employer plan, there was always an age cut-off so that older teens or young adults were forced out of cover. For those who went on to college, this was slightly less of a problem because most of the better-run colleges and universities offer subsidized cover for their students and, in some cases, their alumni. But for those not pursuing higher education, the threat of larger health bills was always in the back of minds when looking for work. In the boom years, it was reasonably easy for young adults to find employment and, in many cases, this gave access to a health plan. But following the recession, the national rate of unemployment has stayed over 9%. For young adults, the rate of unemployment varies from state to state, but it’s often 20% or higher with no immediate prospects of employers looking to hire from among the young unemployed. Although education is not for everyone, this really is the best time to wait out the bad years in school or college, picking up all the qualifications possible. It’s going to be difficult to find work for some time to come.

The Affordable Care Act of 2010 is somewhat controversial, but there are one of two good outcomes. One allows those under age 26 to stay on their parents’ plan as dependents. As a result, about one million more young adults have been able to obtain cover or stay covered. The total number of adults without any access to insurance cover, which includes Medicaid and Veterans’ cover, is around 52 million. Of these, the percentage of uninsured young adults has dropped to 30%. Currently, that means there are about 9 million young adults without any healthcare cover. Indeed, the Centers for Disease Control recently carried out an survey and estimates young adults are the most likely group to be uninsured. That the number of insured young adults has increased given the appalling unemployment numbers is encouraging.

The skeptics among you will argue there are many other reasons why the number of uninsured young adults should fall. You will deny any benefit could come from the hated Obamacare. Unfortunately, the percentages of uninsured has stayed constant in all the other age groups. This suggests the change in law is the reason for the drop. For the record, all the health plans were required to change their eligibility criteria as from September 23, 2010. All plan renewals after that date have accepted young adults. So we have had this law in operation for a year and, allowing for the fact not everyone will have taken up the offer yet, there’s still scope for more young adults to come on to their parents’ plans.

Because younger people tend to be in better health, the health insurance quotes for adding young adults as dependents should be relatively low. Perhaps the more interesting outcome affects employment. In the past, young adults have been chasing jobs with health insurance plans on offer. If these people can stay on their parents plans until 26, this improves their choices of employment. Hopefully, people will recognize this benefit and think better of Obamacare.

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