Selecting Your Health Insurance Provider

Doctor Speaking with PatientOne simple step to make sure your health care plan is compatible with  your health care providers (including clinics, hospitals, pharmacies, mental health services, dentists, and others) is to CALL AND ASK!  This seems to be wise advice for everyone, whether they are selecting coverage from their employer, enrolled in public insurance (such as Medicaid/Medicare), or buying health insurance individually; the challenge seems to be universal.

ISU Extension’s workshop called Smart Choice: Health Insurance devotes some time to defining the different types of networks found in different insurance plans. (For full info, check out “Types of Health Insurance Plans,” one of our Smart Choice handouts).  In brief, there are three most common types:

  • the closed network of the HMO/EPO,
  • the referral-required POS model, and
  • for coverage when you go to a clinic out of state or want the option to see a specialist without referral there is the PPO plan.

News Flash:  ANY insurance plan can have limitations that will put you in a position of not having coverage. The changes can result from institutional events (such as privatization of Iowa’s Medicaid and Expanded Medicaid programs) or private contract negotiations between health providers and the insurance industry. Changes are common, so don’t assume what worked last year is true for the next 12 months. The “Call and Ask” rule is a good rule to apply every single year.

In our workshop, we also ask participants to rank 5 items in order of importance to them in choosing a health insurance plan. The five items are:

  •  Health care services needed for the next year
  •  Doctors and health care providers in the insurance network
  •  Monthly premiums
  •  Deductibles, co-pays, and coinsurance
  • Prescription drugs covered by the plan

Right now given the changes taking place in health insurance coverage, I’d put networks (2nd bullet) at the top of my list.

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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What’s Gap Insurance?

IMG_0192This week, driving home from a meeting, I saw a flipped car on the other side of the road. The next night, I was talking with some friends about this accident, and the topic of Auto Insurance came up.  One person piped up about Gap Insurance.  Another person had never heard about Gap Insurance.

So what is Gap Insurance? Gap Car Insurance will pay the difference between the actual cash value (ACV) of the vehicle and the current outstanding balance on your loan or lease.  Depending on the policy, it may also pay your regular insurance deductible.   Some financing companies and lease contracts require Gap Insurance.

So how does it work? If your vehicle has been totaled by a covered peril such as an accident, theft, fire, flood, tornado, or vandalism, your insurance company will pay you the actual cash value for your car if you have comprehensive and collision insurance.  This amount is often considerably less than the amount you still owe on your loan or the amount due for a lease payoff.

When the amount of your ACV payout is less than what you owe on your lease or loan, the loss from this financial shortfall is the “gap” you would be left owing.  Note:  Not all gap policies pay your deductible.

Here is an example – a story to show how gap insurance might work.

  1. You purchase a new car for $20,000 and drive it off the lot.
  2. After paying the down payment ($1,000) you owe $19,000 in car payments over 4 year period (0% interest loan = $395 car payment.)
  3. You purchase car insurance (including comprehensive and collision) with a $500 deductible to protect you against damages and loss.
  4. You have an accident while you are still upside down on your loan or lease (meaning you owe more on the car than it’s worth) and your vehicle is totaled out.
  5. The insurance company determines that the actual cash value of the card is only $16,500, but at the time of the loss you still owe $18,500.

If you have gap insurance, it will pay the difference of $2,000.  ($18,500 loan balance – $16,500 car insurance payment).

~Susan

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Renting, Do You Have Renter’s Insurance?

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In a recent Insurance Information Institute study, only 37 percent of renters in the United States carry renter’s insurance. Are you one of the 37 percent or are you living on the edge as one of the 63 percent without insurance? You may think your landlord’s insurance is going to take care of you if something happens – YOU’D BEST THINK AGAIN. The landlord’s policy does not cover your “stuff.”

Renters insurance protects you from all kinds of disasters – fire, storm, theft, etc. The insurance covers your belongings if they are damaged inside/outside your apartment/home. Your laptop at your friend’s home is covered if stolen. Also covered is personal liability – if someone falls, needs medical care and has medical expenses. If you are displaced from your apartment, renters insurance will pay for temporary living expenses and food if you are suddenly homeless after a fire or a disaster. A friend’s son was living in a college apartment when the unit next to the son’s had a fire. His renter’s insurance covered the smoke damage that occurred to his apartment.

So how expensive is renter’s insurance? It depends on the value of your personal possessions; I remember when I was renting, I took inventory of my furniture, clothes, shoes and electronic equipment to make an estimate of how much I needed to cover. Before you buy, know how much your stuff is worth. The average policy ranges from $15 – 30 per month.  Shop around for policies. Discounts can apply if you have an auto insurance policy with the same company.

~Susan

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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LTC Policies Provide TLC to Caregiver

LTC.1The former First Lady Rosalynn Carter once said, “There are four types of people in the world: Those who have been caregivers; Those who currently are caregivers; Those who will be caregivers; and those who will need caregivers.”

According to womenshealth.gov, more than 21% of the adult population will provide unpaid care to an elderly or disabled person in any given year. Sixty-one percent are women; most are middle-aged and 59% have jobs in addition to caring for another person.  (www.womenshealth.gov/publications/our-publications/fact-sheet/caregiver-stress.html#b)

If you read my last post, you know that I am included in the statistics listed above.  Of the caregivers who report feeling very stressed, about 75% are women. In an effort to NOT be a part of THAT statistic, I began to look at the resources I had at my disposal.

I personally own a Long-Term Care (LTC) Insurance policy. It was purchased close to 15 years ago. I remember reading it and, at the time, was more focused on increases in cost of living and inflation, rather than all the ways the policy could be used.

I found that my dad has a LTC policy that will be very useful in preventing stress for me, the caregiver. His policy covers in-home care should I need someone to stay with dad while I go to work. It would cover adult daycare should I decide to drop him off at a center on my way to work each morning. It will cover his room, board and care in a local care center should I decide to go visit my daughter in Boise for a week, and need someone to care for dad in my absence. It will also cover some home modifications, to enable him to live with me, and training I may need to care for him. I also learned that once he is diagnosed with Dementia, the policy could be activated, eliminating the need to make future premium payments, even if I did not need to submit a claim at this time.

As I researched information on providing care, the most frequently given advice was, “be sure to read your policy.” Yes, I read my policies…but you do not truly understand and internalize what you read until you find yourself ready to apply what you learn in the printed materials.  I also found Dad’s insurance agent most helpful in translating and advising how to make the most of dad’s policy.  The Senior Health Insurance Information Program also provides terrific print resources (available free – hard copy or on-line) to help consumers understand long term care insurance; they also have an information hotline (800-351-4664) and in many counties they have trained volunteers available to assist consumers.

At the moment, Dad does well on his own during the day while I am at work and my husband, who farms, can check on him often throughout the day. I am thankful we do not need to tap into his LTC policy yet, and equally glad he will not have to continue to pay the premium.  ~Brenda

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Comparison Shopping for Health Care?

health costsSeems strange to think of using ordinary comparison shopping strategies when purchasing health care services, but the time may be coming for savvy shoppers to use data provided by independent agencies and insurance providers to “shop around!” Guroo.com is one such site where you can find the national, state and some regional prices for 70 medical procedures. BCBS of North Carolina offers a search site where individuals can find prices charged by medical service providers.

All these sites declare their purpose is to shed more light on the cost of health care and give individuals an opportunity to control what they will pay out of pocket. If you don’t have health insurance, own a high deductible policy or high copay plan then looking for the best price might be appealing. Unfortunately most of the sites don’t give information about the quality of care.

I recently visited with an individual who was changing jobs and was going to be purchasing their own health insurance plan. One way to lower premiums is to share a greater portion of the costs with the insurance provider. When it comes to choosing cost-sharing for coverage (60/40, 70/30, 80/20, 90/10 options are available from most insurance providers), this access to information would at least be a start in projecting what your out of pocket costs would total yearly for planned medical care. The price information sites offer a way to more realistically compare the costs of plans with a little less guesswork.

Joyce

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Renters Insurance – Not just for young adults

insuranceUsually when I talk about the importance of renters insurance, I’m thinking of young adults – college students, those just getting started in life.  Young adults may not be aware renters insurance even exists.  However, people of all ages may need a reminder that renter’s insurance is important!

Even though 96% of homeowners have homeowners insurance, only 37% of renters have renters insurance, according to a 2013 poll by the Insurance Information Institute.  That’s frightening, when you think about it. If any of those households was hit with a fire or tornado, they could be financially devastated.

Yet, as I was recently reminded, even people who have had homeowners insurance for years might forget to immediately obtain renters insurance when they make a change.  Perhaps they’re downsizing from a house to an apartment.  Or they may be in transition – moving to a new city and testing it out before deciding whether to purchase a home.

You definitely do not want to be “between” insurance plans when disaster strikes.  If you know someone who may be making a housing transition, remind them to obtain renters insurance coverage without delay!

~Barb

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Breaking news: Health Enrollment Extended for those with Penalties

HI Marketplace logoPeople who didn’t really understand the requirement to have health insurance until they file their tax return and discover they owe a penalty have now been offered a second chance! If people file their 2014 tax return, discover the penalty, and realize that they wish they had health insurance in place for 2015, they are allowed to take advantage of a “Special Enrollment Period,” even though regular open enrollment ended February 15.

 

Officials  announced today that this group of taxpayers can take advantage of a special enrollment period through April 30.  Since the fee for not having insurance will be higher on the 2015 return, even those who owe only a small penalty on their 2014 return would be wise to explore their options.

Go to www.healthcare.gov or call 800-318-2596 to enroll.  Or to find someone who can help you through the enrollment process go to https://www.getcoveredamerica.org/connector/  

I hope many folks take advantage of this extended opportunity.

~Barb

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Proof of Health Insurance

tax-sign-sm-15457-53DG-1804x2712During this first tax-filing season since the requirement to carry health coverage has been in place, lots of taxpayers are worried about proving they have health insurance. This year there is no need to submit proof with your return, but it is wise to place some type of documentation with your tax return before you file it away at the end of the season.  Doing so will ease your worries if the IRS ever needs to follow up with you for more information.

If you purchase insurance individually, you may have the greatest need to maintain documentation that shows how many months of the year you were covered, the type of coverage, and premiums paid.  Those who are covered through an employer plan or a public program such as Medicare may have an easier task, but should also keep some type of documentation.  You should keep these – as you do other tax records – generally for three years after you file your tax return.

In future years, showing proof of health coverage may become more important, so we might as well start off on the right track with our 2014 tax files. To find other tax-related information about the health care law, visit irs.gov/aca.

~Barb

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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January is Radon Month

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In the winter months, we spend lots of time in our homes.  Is your home safe?  Yes, you have smoke, carbon dioxide detectors, and fire extinguisher in your home.  But has your home been checked for RADON?  Iowa has a high incidence of radon in homes. As the glaciers came over Iowa, they deposited finely ground rocks that contain radium. Because the rocks that make up our soils are so finely ground, they have a large surface area to emit radon gas.

Radon is a natural radioactive gas that can cause cancer. You can’t see, smell or taste it, but radon may be in your home. The Surgeon General’s National Health Advisory on Radon states that “Indoor radon is the second-leading cause of lung cancer in the United States and breathing it over prolonged periods can present a significant health risk to families all over the country.”

High levels of radon can be found in any type of home, so it is important for everyone to test their home. It can happen in older homes as well as newly constructed homes. Radon gas can enter  through even small cracks in the foundation or openings in the foundation of homes like sump pumps or spaces around pipes. For some individuals with wells, radon in the well water can enter the home and become airborne during showering or dishwashing. The amount of radon from groundwater is generally small compared to the amount of radon that comes from the soil.

When I bought my house about three years ago, this is one test I had done.  Guess what? The house I was going to buy had 3 times the recommended level of Radon.  It has since been mitigated.

January is Radon Month!

~ Susan

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Do you need a health insurance exemption?

Please PayIf you didn’t have health insurance coverage for any portion of 2014, you may encounter a surprise on your income tax return.  Americans are now required to carry health coverage, unless they qualify for an exemption.  Those who did not will face a fee, called the “Individual Shared Responsibility Payment.”

There are two kinds of exemptions; some can be handled directly on your tax return, while others require application and approval.  That approval process can involve a 2-3 week waiting period, so now is a good time to get going on it if you haven’t already done so.

Exemptions which can be handled directly on your tax return include:

  1. Income-based exemptions (i.e. if your income is low enough that the law agrees that you can’t afford health insurance).
  2. Only a short gap in coverage (less than 3 months)
  3. Not lawfully present in the United States
  4. Member of a health-care sharing ministry
  5. Member of a Federally-recognized Indian tribe
  6. Incarceration
  7. If you had coverage beginning on or before May 1, 2014, you have an automatic exemption for the months before that. NOTE: this exemption is unique to 2014, because the open enrollment period was extended until March 31.  The same exemption will not be available in future years
  8. Employer coverage with a non-calendar plan year, so you were not able to join your employer plan until, for example, July 1.  This exemption is available only in 2014.

Exemptions requiring application and approval.  You need to apply for these exemptions through the health insurance marketplace (www.healthcare.gov), and if you are approved, you will be issued an Exemption Certificate Number which must be added to the tax return.

  1. Hardship exemptions.   Even if your income appeared to be high enough that you could afford insurance, the marketplace may grant you an exemption if you faced certain hardships, such as homelessness or eviction, domestic violence, large medical expenses, disaster, and others.
  2. Religious objections.  If you are a member of a recognized religious sect whose members object to insurance, you may apply for an exemption.
  3. AmeriCorps coverage available to those serving in AmeriCorps, VISTA, or NCCC.

The list above is not 100% comprehensive, nor does it give all the details.  If you (or someone you know) were uninsured for part of 2014, I recommend you go to www.healthcare.gov/exemptions to find out if you qualify for an exemption.

At that link, you will also find information about the fee for being uninsured.  Although the fee for 2014 will be fairly small, it will go up in 2015, and again in 2016, so now is the time to consider enrolling in health insurance.  Go to www.healthcare.gov for details.

~Barb

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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