ObamaCare

Today, President Obama signed into law a companion bill to the bill that was passed almost two weeks ago. This has been called a 'fixer' because it modifies some of the language in the first health care bill which was written by the US Senate. This companion bill clarifies a few items from the first bill.

The first health care bill is over 2,000 pages long and it is going to take a long time for the business community and consumers to understand all of the changes in the health care delivery system for people not currently in government programs. Regardless of the good and bad in this new law, Stark & Associates will be here to advise the public and our clients on issues relating to health insurance for both the over and under 65 age groups.

Open Enrollment Period for Medicare

From January 1 to March 31 of each year Medicare has Open Enrollment. This means that folks on Medicare can make a change to their insurance, on what is called a like to like basis. Medicare beneficiaries cannot choose stand alone Rx coverage if they don't have it now. They are, however able to sign up for it if they want to drop coverage with Medicare Advantage plan that had Rx coverage included. Unlike the Annual Election Period, where people can elect Medicare advantage, Rx coverage, and make changes before Jan 1, they can only make one change at this time.

Annual Election Period

Each year, from Nov 15 to Dec 31, is the Annual Election Period for Medicare beneficiaries. What this means, is that during this 6 week period, people with Medicare who would like to enroll for the first time, or change insurance plans with Medicare Part D, the outpatient prescription drug program of Social Security, can do so. This is also the time of year that Medicare beneficiaries can enroll with a Medicare Advantage HMO, PPO or PFFS, or elect to opt out of one of these plans and become covered by Original Medicare. Coverage changes become effective on January 1st of next year.

You would think that maybe government sponsored health insurance planning is simpler than private insurance planning, but it is not. For more information please go to the contact us page of starkinsurnce.net for our telephone number and e-mail.

Will I Be In Business Tomorrow

We have a new President and administration, and they would like to reform the health care delivery system. I agree, it needs reform. The question is, what changes are necessary. When compared to the rest of the world, we lead in new Rx development, surgical proceedures, and technology. Don't get me wrong, I am not an elitist. Developments happen in the rest of the world, I am just saying that we lead the way disproportionately. It is also known that people with means who are ill in other parts of the globe most often choose the USA for treatment.

I think the real issue is just cost. We have not been able to contain the increase in the cost of health insurance, which is a reflection on how much the cost of health care is rising too. If it wasn't rising, then neither would the premiums for the insurance.

I played tennis with a MD tonight. He says his reimbursement from insurers is getting lower. So I asked him what he thought, and said he thinks technology is a major player. I am sure that he is right, along with cost shifting from the uninsured, and from providers looking to be paid more than what Medicare (govt run health program) pays.

It has been a downer of a day for me. Most of my insurance practice is in the health insurance marketplace, and I get the impression that the new Pres would like me out of business, and a Canadian type health care system in place, eventhough he says not so. Stimulus is probably not coming my way, so I truly hope that the folks in our industry don't get a double whammy of loss of business due to the economy, and then a push for big government to take over the whole health care delivery system. We have problems, but keeping the system private will keep us with a better quality of health care eventhough some of us think the quality is not always so good. We are spoiled and expect the best, and if we want the best, a private and not public system is best. If you don't like public housing, then don't expect public health coverage to be an improvement, or necessarily cheaper. Medicaid is expensive to run. Medicare is not, because the government lets private carriers administer it, medicaid is administered by government agencies.

Maybe I just want to feel needed. Anyway, let me know your thoughts on this.

BAHU's New President

This past July the Broward Association of Health Underwriters elected a new President and President Elect. Beginning August 1, Kevin Farrell of Aetna takes over as President, and Tonya Draughon of Renaissance Dental as President Elect. Both have served the Health Association in the past with great distinction and are known throughout the agent community for their integrity.

How Are HSA's and Medicare Part D Related?

The Medicare Modernization Act became effective on January 1st of 2004.  The purpose was to expand the Medicare program to include prescription drugs to all seniors and to be the most cost effective for the neediest citizens.  Medicare Part A covers hospitalization, and Part B medical care.  Part C created newer Medicare Health Plans called Medicare Advantage, and now the addition of Rx to Medicare is Part D.

The addition of Health Savings Accounts takes up 8 pages in the Medicare Modernization Act (MMA).  The idea behind this as part of the Medicare Program is to allow people who have funds in their H.S.A’s the ability to purchase prescriptions and Long Term Care with Tax Advantaged dollars.

When Would You Like to Retire?

Rick Stark and Len Harris


By Len Harris of  FutureCare Services
www.futurecare.com

Many people think they have the wherewithal to retire and enjoy their golden years. Travel, volunteer your time, visit family and friends-Surprise! Health care costs, never expected, are the biggest threat to retirement savings.

Yes, the government will provide some coverage and some employers will pay some retirement health costs, but the lion’s share will still come from the retiree.  Deductibles and co-payments are not considered when putting money aside.  These expenses can be huge, especially to people susceptible to illness just as they near retirement.  It’s estimated that the onset of an illness could siphon approximately 20% of a household’s wealth.  “You could easily burn close to $1 million of your nest egg with out-of-pocket expenses for a major illness,” according to George Ciccotello, director of Graduate Personal Finance at Georgia State University.  

People think Medicare will cover it all. It doesn’t.   Without a Medicare supplement, the average couple aged 65 will spend $200,000 to cover medical costs in the average retirement. That’s just for deductibles, the cost of Medicare, co-payments, non covered items and prescription drugs.  That’s based on the husband living to 82 and the wife to 85 with no employer provided health insurance.

Unfortunately, one of the most overlooked forms of protection is Long Term Care Insurance  (LTCi).

So many people say they’ll wait until they retire to look at or even think of purchasing a policy. A policy at age 50 might cost 40%-50% less than at age 65.  In addition 40% of those needing long term care are between the ages of 18-64.  Debilitating illnesses and   serious injuries can strike anyone. People don’t plan for this, because “It can never happen to us”.  

There are those agents who understand this and are making inroads at the worksite.  Showing an employer how this coverage can reduce absenteeism allows the agent to either have the employer offer a “core” plan and let the employee enhance the program, or allow the agent to talk directly to the employees.  Either way, LTCi helps both the employer and employee.

It is a fact, long term care insurance is the last thing people think of to protect their later years, but once purchased, there is a 97% retention rate.  After they’ve seen the light, it’s kept for life.


7/06

Fla Long Term Care Legislation 2006

Often, legislators sponsor bills with good intentions that when implemented, have negative consequence. At the present time, both the Florida Senate and House of Representatives are promoting similar bills regarding Long Term Care Insurance which to both the insurance professional and the public appear ok. The main jist of the legislation is to protect the public. The main points of these bills are to limit the contestability period of LTCi to two years like Life Insurance and to protect consumers in closed blocks of business (discontinued policies). Consumers in these closed blocks would have protection if the premium is raised beyond a certain percentatage point.

This looks like good legislation, yet most if not all insurers of Long Term Care writing business in Fla are opposed to the new legislation. Their actuaries are telling them that rates will have to go up, and that insurers protection from fraudulent claims would now become greatly limitted.

The purpose of this blog is to create a dialog between professionals within the Life and Health Insurance industry. If you want to post a comment and have not set up a free account with blogger.com (a google company), you can post as an annonymous individual. It is requested that you do let us know who you are. This post will be sent to people in the Fla legislature, Office of Insurance Regulation, and to insurance professionals. It is of utmost importance that we help make this legislation free of unintended negative consequences. The bill sponsors and the OIR have been friends of the industry, and it benefits us all to keep it that way.

The New Generation of Insurance Scams

Yesterday my Dad called me about an offer he received. Dad is 85, soon to be 86 in March. He is in great health for his age. He goes to the GYM 2 times a week. This man who he sees there a lot, is an insurance agent. He told him about a great deal. He’s going to get him (my Dad) a $1 million Life Insurance policy, and then pay him something like $100k or more. What a deal!

In fact last year, we had an 85th birthday party when Dad turned 85, and one of his friends brought up a similar sounding idea to me that I should investigate. If you have read my bio, you should notice that I too am an insurance agent. Well, this sounded awfully too good to be true to me, so I blocked out even thinking about this until hearing about this again yesterday. So tonight I went on the internet to investigate, and the alarm bells have now begun to go off.

I mean, can you imagine someone purchasing life insurance on an elderly person and then paying the premiums, and also paying the insured? We all know that expression about something being too good to be true. So here is how it works. Let me know what you think. Remember, I have nothing against people making money through legitimate means, or even making lots of it. I want to be one of those making lots of money, but my moral code says to do it honestly and morally.

This is called Stranger Owned Life Insurance or SOLI. Someone buys Life Insurance on someone else’s life, and then pays the premium and pays them for signing up. If approved, the insured must keep the policy for at least two years. After that they can sell it or sign it over to the people who got them involved in this in the first place. Now I am simplifying this, and here is where the potential illegalities lie. First of all, when Life Insurance is bought, the beneficiaries are supposed to have an insurable interest. Like your wife or kids, or now in the modern era, your significant other, if you know what I mean. Or even a business partner. So a total stranger has an insurable interest? Then how about the upfront money? The agent may not tell you, but the proceeds more than likely come from his commission. In most states, this is rebating, and illegal in the insurance business. Two no-no’s. The insurable interest problem is something that can be explained away, because often life insurance is owned for many years, and the people you bought it for to protect may be gone from your life, and after two years, judicial review (previous lawsuit history) has said policies are no longer contestable by the insurance co’s in most situations, and this is one of them.

Now tomorrow I’ll be at a Life Association meeting to discuss this with my peers. I write mostly health insurance, but have a history in the life end of the business too. Sooo, what d’ya think? Let me know. Please also take a look at my insurance blog. Insurancemaven.blogspot.com. I have this article posted there, but have some other items there too.

Long Term Care Insurance 2006

Q)Is there a Long Term Care crisis in America?

A)If it’s not here now it will be soon. The Baby Boom generation begins to turn age 65 in 2011. As it is, Long Term Care is very expensive, and the number one payor, the government, wants ‘out’ as much as possible. As of now 40% of Medicaid payments go towards Nursing Home stays. Prominent Republicans, and now Democrats recognize the importance of having the private sector to pay for the cost of Long Term Care via insurance. Organizations such as the National Association of Health Underwriters, www.nahu.org, have been pursuing the overturning of an amendment by Henry Waxman (D, Ca) that began the prohibition of the Long Term Care Partnership Insurance plans. With the partnership program, if an individual purchases Long Term Care Insurance, and exhausts the benefits of the policy, then they do not have to spend down their assets as they do today. Individuals can maintain on a dollar for dollar basis the amount of assets in their name that the policy was worth. For example, if the policy paid $100k in claims as a maximum benefit, the policy owner could then obtain Medicaid and still have up to 100k in assets to qualify. Democrats did not want this type of program fearing that it would benefit the rich, but now with a looming Long Term Care crisis, they are beginning to recognize the value of this program. Many states now have a partnership program in place in anticipation of federal approval. Even Hilary recognizes this program and has placed her name as a sponsor. After this is passed, the next goal will be approval of an above the line deduction for individual Long Term Care Insurance policies.