Aggregate Deductibles: One Advantage of HSA Plans

As we've mentioned many times, HSA-qualified plans are increasingly popular and have many advantages you should consider. One of these advantages is that most HSA plans include an "aggregate deductible." That's a fancy way of saying "one deductible covers the whole family."

For example, let's imagine that you have a $5,000 deductible for your family of four. That single deductible covers all four of you -- covered expenses for each member of your family count towards your $5,000 deductible for the year. So if you have an unexpected appendectomy (which typically costs around $25k or so, believe it or not), you will have satisfied not only your personal deductible, but that for the entire family.

By contrast, most traditional plans have a per-person deductible with a family maximum of 2-3 deductibles. In that scenario, when you get your appendix out you certainly satisfied your deductible, but then if your child breaks an arm you'll have to pay the deductible again for him (not to mention "coinsurance," which is also present on most traditional plans and absent in most HSA plans... but that's another post for another day).

The aggregate deductible thus makes your family's health insurance a much simpler matter, enables you to better budget possible health-related expenses, and could potentially save you a lot of money if your family has multiple health issues in the same year.

Contact AC Forrest to learn more about HSA-qualified health insurance plans or to get a free, no-obligation quote.

How Health Insurance Works

What if I've been declined for health insurance in the past?

There may be other options for you. While there are certain circumstances and conditions that will result in an automatic decline with any health insurance carrier, the underwriting guidelines are not the same in every case. One of the major benefits of using an independent health insurance broker is that we have some familiarity with the underwriting practices at different companies, and we often pre-screen clients before going through a full application to get an idea of what the outcome might be. Talk to us about the specifics of your case and we’ll do our best to help you find coverage. If individual health insurance is not an option, there are limited benefit plans or discounts plans that could benefit you. Contact us with questions or if you'd like to discuss the particulars of your case.

How a health insurance agent is paid

People often ask how we’re paid, and we’re happy to answer you because we want to be upfront and transparent with our clients (because we’re interested in a long-term relationship with you). We are paid a commission by the insurance company when we sell their plan. The amount and structure of that commission varies with different companies and products, but it is usually (though not always) some percentage of the premiums we generate. It’s important for you to realize, though, that your premiums are unaffected by our commission – your premium will be the same whether you purchase coverage through us or buy directly from the insurance company. This means two things: First, it means that our service is free to you. Second, it means that we work for you and are motivated to make sure you are happy with your insurance coverage.

An Overview of Medicare Supplement (Medigap) Plans

An overview of Medicare Supplement plans ("Medigap") from the Centers for Medicare and Medicaid Services (CMS): 

"A Medigap policy is health insurance sold by private insurance companies to fill the "gaps" in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn't cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will each pay its share of covered health care costs.

"Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium ($96.40 in 2008). In addition, you will have to pay a premium to the Medigap insurance company. As long as you pay your premium, your Medigap policy is guaranteed renewable. This means it is automatically renewed each year. Your coverage will continue year after year as long as you pay your premium. In some states, insurance companies may refuse to renew a Medigap policy bought before 1992.

"Insurance companies can only sell you a "standardized" Medigap policy. Medigap policies must follow Federal and state laws. These laws protect you. The front of a Medigap policy must clearly identify it as "Medicare Supplement Insurance."

"It's important to compare Medigap policies, because costs can vary. The standardized Medigap policies that insurance companies offer must provide the same benefits. Generally, the only difference between Medigap policies sold by different insurance companies might be the cost.

"You and your spouse must buy separate Medigap policies.Your Medigap policy won't cover any health care costs for your spouse.

"Some Medigap policies also cover other extra benefits that aren't covered by Medicare.

"You are guaranteed the right to buy a Medigap policy under certain circumstances.

"For more information on Medigap policies, you may call 1-800-633-4227 and ask for a free copy of the publication "Choosing a Medigap Policy: A Guide to Health Insurance for People With Medicare." You may also call your State Health Insurance Assistance Program and your State Insurance Department. Phone numbers for these Departments and Programs in each State can be found in that publication."

Questions about Pre-existing Conditions? Try a Pre-screen

We often talk to clients who have some sort of pre-existing medical condition and are concerned about how that will affect their ability to get coverage or how it will impact their premiums. Currently (and this could change, as we know), there are many pre-existing conditions that result in automatic declines when one applies for individual health insurance. Many conditions won’t result in a decline of coverage, but may well result in a “rider” (an exclusion of coverage) for that condition. Still others may not be a big deal at all. If you’re concerned about pre-existing conditions you need to make sure you’re working with a broker who will take the time to talk with you about the details and then do an underwriting pre-screen.

Most insurance providers allow brokers/agents to anonymously submit medical information to an underwriter before an application is submitted in order to get an idea of how that insurance provider would handle that case. While the underwriting guidelines at different companies are similar in many ways, they are not uniform. Where one company might deny an applicant altogether, another might offer coverage with a rider, another might offer coverage with no rider but a higher premium (called a “rate up”), etc.

The key, of course, is to find a broker who will take the time to do the legwork for you to help put you with the carrier that will be most likely to give you the outcome you want. AC Forrest will do just that for you. Contact us to let us know how we can help you find the best carrier for you.

Carrier Spotlight: Carolina Care Plan

AC Forrest works with a number of different health insurance carriers in order to provide an array of options for our clients to help them find the best plan for them. In South Carolina, one of the carriers we represent is Carolina Care Plan (CCP), which started in Columbia 25 years ago and is now a subsidiary of Medical Mutual of Ohio, a large national insurer. One thing we like about CCP is that they combine the accessibility and "feel" of a local company with the resources and strength of a large national carrier.

CCP offers an array of plans in the group and individual market. Their "Vital Access" plans offer a great combination of higher deductibles (to keep premiums down) with everyday benefits like a doctor copay and drug card. They also offer HSA-compliant plans and child-only plans. Their network is among the largest in South Carolina and includes every hospital in the state. On plans that provide a doctor copay, that copay is what's called a "universal copay," meaning it covers everything that happens at that visit (as opposed to simply the medical consult or something). Their lab benefit covers 100% of charges at preferred labs.

While CCP is not right for every individual or group, it is among the companies that we may consider in helping you shop for coverage. Contact us to get a quote from CCP and other carriers.

The Right Balance

While there are many factors that influence your decision about which health insurance plan is right for your family, often we find that the key issue is figuring out the right balance between premium and deductible. Because all insurance is fundamentally about risk management, the question basically boils down to how much risk you’re willing to take on yourself versus how much you pass along to the health insurance provider. The more risk you take on yourself (the higher the deductible you choose), the lower your premium will be. The more risk you pass to the insurance company (lower deductibles), the higher your premium will be.

It’s a balancing act as you try to find a deductible that you are comfortable with along with a monthly premium that works. When asked what they’re looking for, most people say some version of “the most coverage for the least amount of money.” For most individuals, that balance is usually with a deductible in the $2,500-$5,000 range, but the decision is different for everyone depending on the particulars of your situation. In general we find that the $1,000 or less deductible most people would like to have simply doesn’t make sense when you crunch the numbers.

Talk to AC Forrest about your situation and we’ll help you find the balance that works for you.

When Does My Health Insurance Premium Go Up?

Everyone knows that health insurance premiums go up every year as the price of healthcare rises. But when does that happen?

With most plans and insurance companies, your initial premium will be locked (unchanged) for 12 months. There are exceptions. Blue Cross Blue Shield of South Carolina, for instance, puts their annual premium increase into effect for all of their individual members on November 1 of each year, regardless of when they purchased coverage (that is not the case for group clients). Some carriers (including Blue Cross of SC) also increase your rate when you hit a new age category (i.e. when you turn 40 or 50).

Some carriers (such as UnitedHealthOne and Assurant Health) offer individual health insurance applicants the option of a 24 month or even a 36 month rate guarantee. Obviously, this means that the premium the first year will be higher. We have typically not encouraged clients to take the longer rate guarantee, but in the current climate that might be a very good idea. It is extremely likely that the current healthcare reform proposals in Washington will result in much higher health insurance premiums for most people (especially younger people) due to new taxes and much heavier government mandates. So at present a longer rate guarantee bears consideration – again, this is especially true for younger clients.

When you are notified of your plan renewal (a nice way of describing the notice you’ll get about your impending rate increase), take a few minutes to shop around and compare your options. As always, AC Forrest is happy to show you some other options and compare them with your current coverage.

COBRA Subsidy

Congress has extended the COBRA subsidy for involuntarily terminated employees. These employees may now receive COBRA benefits and pay only 35% of the price for those benefits for up to 15 months after losing their jobs. They still must elect to take COBRA within the standard 30 day window to do so. The extension now applies to employees involuntarily terminated between September 1, 2008 and February 28, 2010.

This may or may not be the best option for you if you qualify. It generally depends on your health situation how the price of COBRA (even at 35%) fits in your budget. AC Forrest would be happy to help you evaluate this option against other possibilities, such as individual health insurance. Contact us for a free consultation and comparative quotes.

Desktop Sharing

AC Forrest has recently implemented desktop sharing (or screen sharing) technology to enhance our ability to effectively communicate with our clients. We can therefore schedule remote or web-based meeting with current or prospective clients to go over health insurance options, show you plans, and that sort of thing. Essentially you log in to a website (www.yuuguu.com) with our access code, and soon you will be seeing our computer screen. There is nothing to download on your end.

While we’re happy to talk over the phone, we’ve found that it really helps our clients to be able to see what we’re talking about (for example, when comparing to health insurance plans and prices). Many people are visual learners and it is important to us that our clients understand their options and the plan they ultimately select. We can even walk you through an agent-assisted application right then, since many people may have questions along the way.

It’s just another way AC Forrest tries to enhance our communication with clients and serve their needs.

We're pregnant and don't have maternity coverage! What do we do?

All too often people wait until it is too late to get health insurance or to add maternity coverage. Once you (or your spouse) become pregnant, you will be unable to get maternity coverage on an individual plan. If you have individual coverage already, but do not have maternity coverage, it is too late to add it. Unlike group coverage, individual plans do not include maternity – it is an optional add-on with some carriers, and often there is some kind of waiting period involved. So if there is a chance you’ll be pregnant, you’ll want to let your insurance broker know that when you’re getting coverage.

But the question remains: What do you do if you’re already pregnant and don’t have maternity coverage?
Here are a few things to consider:

* If you have the opportunity to get on a group plan through your employer (or your spouse’s employer), then do it. In most states a current pregnancy will be covered immediately. If you’re self employed, it might be time to think about setting up a group plan if you can.

* Shop around. You may well be looking at a 5-digit expense here. For most major purchases (think car, appliance, computer, etc.) you probably do some homework to shop around and compare prices to make sure you get the most bang for your buck. Treat this pregnancy the same way (and healthcare in general, for that matter). The baby business is big business to hospitals and they want you to deliver your baby at their place (that’s why they advertise). Call them and explain that you don’t have maternity coverage through your insurance plan and ask them if they will give you a discounted rate. (“Will you give me the Blue Cross rate?”) Obviously, you’ll need to get that in writing – and you’ll need to do it way ahead of time (not between contractions!).


If you have a good individual health insurance plan, rest assured that any complications from the pregnancy will be covered by your plan.

For more information, contact AC Forrest Insurance Group. 

More Reasons you Need Major-Med Health Insurance

Did you know...

...that the average cost of having your appendix out is $27k?
... the average cost of a day in the hospital is $5,570 (and that doesn't cover doctors fees - that's for the hospital only).

These figures are from Anthem Healthcare Analytics data from 2006. And we all know the price of healthcare has certainly gone up since 2006! What does it mean?

The main point of health insurance is not to save you $50 at the doctor when you get sick - it's to protect you from these kinds of fees if something big happens. Get quotes now at www.acforrest.com!