Critical Illness Insurance: What Is It and Who Needs It?

November 28, 2020 11:28 newlambertagency

If you have never experienced any critical illness, you’re one of the lucky ones. Their treatments are quite expensive and pose a burden on every common man’s finances.

But you need to be prepared for everything that life throws at you. In the event of a big health emergency such as cancer, heart attack, etc. Critical Illness Insurance could provide you with a much-needed financial shield.

People usually assume that they’re fully protected under their health insurance plan, but the exorbitant costs of treating life-threatening illnesses are usually more than any plan will cover.

That is why critical illness insurance exists to help meet the high costs associated with critical illnesses and provide the necessary financial security.

Read on to know everything about them, a Critical Illness Insurance 101 if you will.

What are Critical Illness Health plans?

Critical illness health plans are fixed benefit health insurance plans which cover a specified list of critical illnesses. Some common illnesses covered include cancer, stroke, heart attack, major organ transplants, liver failure, lung failure, multiple sclerosis, etc.

Critical illness insurance can pay for costs not covered by traditional insurance. So if the policyholder is diagnosed with any of the covered critical illnesses during the term of the plan, the sum insured is paid in lump sum irrespective of the actual medical costs incurred.

Not just that, the money can also be used for non-medical costs related to the illness, including transportation, child care, etc.

The coverage limits may vary and the policy pricing is impacted by several factors, including the cost and extent of coverage, age, health, and the sex of the insured, and the family medical history.

What is not covered?

There are exceptions to critical illness insurance coverage. These exclusions are as follows:

  • Illnesses or treatments occurring within 60 to 90 days of buying the policy
  • Pre-existing illnesses during the waiting period
  • Congenital defects, ailments, or diseases
  • Diseases occurring due to alcohol or drug abuse
  • HIV/AIDS infections
  • Illnesses due to war or war-like situations
  • Maternity related illnesses
  • Death due to critical illness during the survival period

Why are such plans necessary?

Illnesses like cancer, heart-related ailments, etc. are on the rise. With various external factors like pollution, health ignorance, and genetics, many individuals are getting afflicted with common critical illnesses and are requiring intensive treatments.

Even the treatments required for critical illnesses are very expensive. Individuals need a specially designed plan which pays for such expensive treatments where normal health insurance might prove to be insufficient.

This is where Critical illness insurance can prove to be extremely beneficial for people who are at a high risk of falling prey to severe illnesses.

Also, the premiums which are paid for a critical illness plan are allowed as a tax deduction under Section 80D. Thus, you can avail tax benefits too from a critical illness policy.

Bottom Line

Since medical bills are a common cause of bankruptcy in the United States, it’s crucial to be prepared and protect yourself against the unpredictable fate, especially if you have a family history of any of the illnesses mentioned above.

All About COBRA Health Insurance

November 25, 2020 17:50 newlambertagency

COBRA health insurance or Consolidated Omnibus Budget Reconciliation Act (COBRA) is an insurance program that gives workers and their families who lose their health benefits the right to choose to continue the health benefits.

Created in 1985, COBRA allows individuals who experience a job loss or other qualifying event the option to continue their current health insurance coverage for a limited amount of time.

It is generally provided by employers outside the federal government with more than 20 employees.

How do you qualify for COBRA health insurance?

You can avail COBRA benefits only in certain situations that are called ‘qualifying events’.

You’re eligible for COBRA if,

  1. You were employed and covered under an employer’s group health plan.
  2. You were laid off, fired, retired, or quit, or had your work hours cut to the point that your employer is no longer required to cover you under a group health plan.

As a dependent,

  1. If you are a dependent of someone who qualifies for COBRA based on the above, you may be eligible, too.
  2. If you are a spouse who divorces or files for legal separation from the employee, you may qualify.
  3. A spouse of an employee who dies may also get COBRA coverage.

How does it work?

As already mentioned, COBRA insurance extends your health plan coverage when an employer’s plan ends.

Your insurance carrier is required to include COBRA rights information in your plan documents when you initially enroll. Your employer, your insurance carrier, or both will give you information on COBRA coverage.

After your insurance benefits end due to any of the reasons mentioned earlier, you will have 60 days to decide whether you want to continue your health coverage under COBRA. If you don’t approve it, your health coverage will end on the day that your employer’s plan coverage ended.

If you elect to continue coverage under COBRA, it will start the day after your employer’s plan coverage ends. The COBRA continuation coverage will offer the same benefits you had under your employer’s group plan. This means that you can see the same providers and follow all existing plan details.

COBRA coverage may last for 18 or 36 months depending on the type of qualifying event that made you eligible in the first place.

The coverage may be terminated if you don’t pay your premiums or other fees for coverage. It can also be terminated if you get a new job that offers health insurance coverage.

COBRA can be extremely beneficial for you as it covers the same benefits your employer’s health plan covered you for. However, it does not cover supplemental coverage, such as disability, life insurance, hospital care insurance, or other types of voluntary coverage

HSA vs. FSA: Differences and How To Choose

November 21, 2020 11:50 newlambertagency

There’s no denying that healthcare can be costly. Even if you have insurance through your employer, you might consider taking advantage of one of the federal government programs that encourage saving for medical expenses not covered by insurance.

The most common type of accounts offered to employees is the Health Savings Account (HSA) and the Flexible Spending Account (FSA). The most significant difference between flexible spending accounts (FSA) and health savings accounts (HSA) is that an individual controls an HSA and allows contributions to roll over, while FSAs are less flexible and are owned by an employer.

Apart from this, there are several key differences between HSAs and FSAs.

Both HSAs and FSAs allow people with health insurance to set aside money for any healthcare costs referred to as “qualified medical expenses”. This includes deductibles, copayments and coinsurance, and monthly prescription costs.

You usually receive a debit card that you can use to pay for qualifying expenses. And both types of accounts have tax benefits as well.

Let’s discuss HSA vs. FSA – the difference

Although FSAs and HSAs both allow people to use pre-tax income for eligible medical expenses, there are considerable differences between HSAs and FSAs. Those differences include the qualifications, contributions limits, rules for rollovers and changing contribution amounts, and withdrawal penalties.

Qualification: The qualification for FSA must be set up by the employer while HAS is available only to people who have a high-deductible health plan, or HDHP.

Annual Contribution limits: The limit for FSA is up to $2,650/individual and up to $5,300/household. While for HSA, it’s up to $3,450/individual and up to $6,900/household.

Account Ownership: FSA is owned by the employer and lost with a job change, unless eligible for continuation through COBRA; while HSA is owned by individuals and carries over with employment changes.

Rollover Rules: In FSA, employees can roll over $500 into next year’s FSA, but it’s decided by the employer. In HSA, unused funds roll over every year.

Penalties for Withdrawing Funds: You may have to submit expenses to be reimbursed by FSA and depending on the employer, you may not have access to funds for nonmedical expenses. While in HSA, savings can be taken out of the account tax-free after age 65 and if used before 65, for nonmedical expenses, it is subject to a 20% penalty and must be declared on the income tax form.

By looking at the above HSA vs. FSA comparison, you can choose the one that best suits you.

Overall, the higher limits and contribution rollover of the health savings account make it a better choice if you can qualify. HSAs are more flexible than FSAs, allowing you to save for potential medical expenses and accumulate money over time.

Buying Private Health Insurance

November 18, 2020 09:13 newlambertagency

If your workplace or employer doesn’t offer you health insurance, then the obvious choice is to buy private health insurance.

If you’re planning to insure yourself, you need to keep in mind that you’ll have to pay the full cost of the premiums. Thus it is natural to be concerned about how the cost of life insurance will affect you financially.

Fortunately, there are different options and prices available to you based on the level of coverage you need.

Since your employer is not providing you with the insurance benefits, the process of buying private health insurance seems more complicated than simply selecting a company plan and having the premium payments come straight out of your paycheck every month.

Here are some tips that could help you:

How Buying Private Health Insurance Works

You can get insurance by enrolling in a group health insurance plan through your employers. Medicare and Medicaid also provide health care coverage to many Americans.

Medicare is a federal health insurance program for people who are 65 or older while Medicaid is a public assistance healthcare program for low-income Americans regardless of their age.

However, you cannot buy private insurance directly from the state or federal government. If you are not eligible for Medicare or Medicaid and if your company does not offer an employer-sponsored plan, then you have the option of purchasing insurance policies from private insurance companies or through the Health Insurance Marketplace.

But how would you know that you need private health insurance?

Here are some scenarios when you might need them:

If you’re unemployed

If you’re currently unemployed or have lost your job, then obviously you have no insurance support from anyone. But you may be eligible to maintain coverage through your employer’s health insurance plan with the help of a program called the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows eligible employees and their dependents the option to continue health insurance coverage when an employee loses their job or experiences a reduction of work hours

Self-employed

If you’re self-employed, you need to buy your health insurance naturally. However, you can be insured through your spouse’s plan. But if you’re not married, then you must consider buying private health insurance on your own.

If you’re 26 or older

It’s true that under the provisions of the Affordable Care Act (ACA), young people can be covered as dependents by their parents’ health insurance policy until they turn 26 years old.  But after that, you must seek out your insurance policy.

If you retire

When you retire, you will likely no longer be eligible for employer-sponsored health insurance. If you are under 65 and not disabled, you will need to purchase individual private health insurance until you turn 65 and can apply for Medicare.

If you find yourself in one of the above situations and lack health insurance coverage, it’s important to enroll in an individual plan as soon as possible. So, do your research or consult an agent who can help you choose the best plan that benefits you and your family.

Medicare Part A and Part B – What’s the Difference?

November 11, 2020 16:21 newlambertagency

If you’ve been covered by employer-sponsored health insurance most of your life, you probably never had a reason to distinguish between the different parts of your coverage.

When you qualify for Medicare, you’re first enrolled in Medicare part A and Part B. Their enrollment and eligibility are generally the same but have differences in costs and coverage.

Medicare Part A covers hospital expenses, skilled nursing facilities, hospice, and home health care services, while Medicare Part B covers outpatient medical care such as doctor visits, x-rays, bloodwork, and routine preventative care.

The two parts together form Original Medicare.

Let’s discuss more about them in brief.

What is Medicare Part A?

Sometimes referred to as “hospital insurance”, Part A covers hospital stays and inpatient treatment. For treatment to be covered by Medicare Part A, it must be deemed medically necessary. This means a doctor has agreed that the treatment is required to prevent or treat a condition or illness.

You typically pay a deductible and coinsurance and/or copayments. As for premium, if you have worked for at least 10 years i.e. 40 quarters while paying taxes, then you don’t pay a premium for Part A.  If you have worked for less than 30 quarters, you generally pay $458 per month in 2020.

What is Medicare Part B?

Medicare Part B is known as “medical insurance” because it covers doctor visits and medical care outside the hospital. Like with Medicare Part A, treatment must be determined as medically necessary or preventative to be covered by Medicare Part B. While Medicare Part A is required for some people on disability or those receiving other forms of government aid, Medicare Part B is not mandatory for these people.

Under Part B, in most cases you will pay 20% of the Medicare-approved amount for each item or service and a deductible may also apply. The premium for Part B may be higher if your income is above a certain amount.

Can you get both Part A and Part B coverage at the same time?

It’s possible to get Part A and Part B coverage at the same time when you’re an inpatient in a hospital. For instance, while Part A generally covers medically necessary surgery and certain hospital costs, Medicare Part B may cover doctor visits while you’re an inpatient. 

Are There Alternatives to Medicare Parts A and B?

Yes. If you are still working, you could stay on your employer’s insurance plan. However, be aware that you may pay a penalty if you later enroll in Medicare outside of your enrollment period.

If you want Medicare benefits but need more flexibility than Parts A and B, you could opt for Medicare Part C, also known as Medicare Advantage.

Common Insurance Terms And What They Mean

November 5, 2020 12:38 newlambertagency

Just like every other industry, health insurance has a unique language. If you’re not familiar with them, you face the risk of choosing bad insurance plans for you and your family.

But not to worry, we have curated this insurance glossary for you to make things easier.

Below are some important insurance terms you should include in your brain dictionary:

Allowable charge – also known as the “allowed amount,” “maximum allowable,” and “usual, customary, and reasonable (UCR)” charge, this is the dollar amount considered by a health insurance company to be a reasonable charge for medical services or supplies based on the rates in your area.

Benefit – the amount paid by the insurance provider or company to a member for their medical costs.

Benefit level – the maximum amount that a health insurance company has agreed to pay for a covered benefit.

Benefit year – the 12 months for which health insurance benefits are calculated, not necessarily coinciding with the calendar year. Health insurance companies may update plan benefits and rates at the beginning of the benefit year.

Claim – a request by a customer under a plan, or a plan customer’s health care provider, for the insurance company to pay for medical services.

Co-insurance – the amount you pay to share the cost of covered services after your deductible has been paid. The coinsurance rate is usually a percentage. For example, if the insurance company pays 80% of the claim, you pay 20%.

Co-ordination of benefits – sometimes two insurance plans work together to pay claims for the same person. That process is called coordination of benefits. Benefits under the two plans usually are limited to no more than 100% of the claim.

Co-payment – a predetermined amount for a covered service, paid by a patient to the provider of service before receiving the service. For eg: you pay 10$ for every visit to the doctor while your insurance covers the rest.

Deductible – the amount of money you must pay each year to cover eligible medical expenses before your insurance policy starts paying.

Dependent – any individual, either spouse or child, that is covered by the primary insured customer’s plan.

Decline – an insurance company refuses to accept the request for insurance coverage.

Effective date – The date on which a policyholder’s particular coverage begins.

Exclusion ­– also referred to as limitations, they are any specific situation, condition, or treatment that a health insurance plan does not cover.

We’re halfway through our insurance glossary, just a few more.

Explanation of benefits – the health insurance company’s written explanation of how a medical claim was paid. It contains detailed information about what the company paid and what portion of the costs you are responsible for.

HMO – Health Maintenance Organization is a health care financing and delivery system that provides comprehensive health care services for members in a particular geographic area who use in-network providers.

In-Network provider – a health care professional, hospital, or pharmacy that is part of a health plan’s network of preferred providers. You will generally pay less for services received from in-network providers because they have negotiated a discount for their services in exchange for the insurance company sending more patients their way.

Medicaid – a health insurance program created in 1965 that provides health benefits to low-income individuals who cannot afford Medicare or other commercial plans.

Medicare – a federal health insurance program that provides health benefits to Americans age 65 and older.

Out-of-network provider – a health care professional, hospital, or pharmacy that is not part of a health plan’s network of providers. You will generally have to pay more for services received from out-of-network providers.

Out-of-pocket maximum – the most money you will pay during a year for coverage. It includes deductibles, co-payments, and coinsurance, but is in addition to your regular premiums. Beyond this amount, the insurance company will pay all expenses for the remainder of the year.

PPO – Preferred Provider Organization is a health insurance plan that allows its customers to receive care from either in-network or out-of-network (non-preferred) providers. Although they’ll receive the highest level of benefits when they use providers inside the network.

Premium – the amount you or your employer pays each month in exchange for insurance coverage.

Provider ­– any person that includes doctor, nurse, dentist, or any institution i.e., hospital or clinic that provides medical care.

Waiting period – the period of time that an employer makes a new employee wait before he or she becomes eligible for coverage under the company’s health plan. Also, the period of time beginning with a policy’s effective date during which a health plan may not pay benefits for certain pre-existing conditions.

There you go! Your very own handy dictionary to understand the insurance world better. Although there are a lot more terms involved, with this insurance glossary, you’re now better prepared to evaluate your needs, ask good questions, and take a more active role in your health insurance decisions.