It benefits the agent to sell you those plans with all the extra benefits, because the commission is higher. The more benefit laden the package is, the higher the monthly premium, and the higher the premium, the higher the commission, because agents (such as myself) are paid based on a % of the premium.  Most companies are paying us 15-25% on the first year, and 4-8% on years after that. The simple fact is, however, that those plans are in most cases not the correct plan in terms of risk and cost.
The first dollar benefits, such as the copay for office visits and drugs, do not count toward your deductible. The plans with all the added benefits have much higher premiums and or deductibles to remain competitive with the plans without them.
Here is a simple comparison for a family of 4. In this example we’re trying to cover a family of 4 all in good health with the least expensive option, while staying under 600 dollars per month.

In these 4 plans, the copay plans have full first dollar benefits. There are unlimited office visits, full drug coverage, preventive care, all provided before the deductible is met. In the HSA plans, preventive care is covered, but no other benefits are provided before the deductible is met. If the entire year went by, and no one ever had an accident or needed to go to the hospital, the plan on the left does have more benefits. However, this does not take into account overall expenses or that the office visits do not count toward the deductible.
Let’s just say all members of the family go to the doctor 4 times in the year. They each take 1 prescription medication on 3 of the visits, and on the other visit are just going for a physical.
Each visit on average runs $100, and the drugs cost 50 dollars per script to buy out of pocket, but would have cost 15$ as a copay.

In this example, in the 2500 deductible copay plan, you have spent 740, none of which counts toward the deductible. With the 3000 HSA plan you have spent 1940, and 1800 of it counts toward your deductible. The most you could spend, maximum, for the rest of the year would be 1200 dollars. In the 2500 Copay plan, you still have a potential out of pocket cost of 9000 in addition to the expenses you already had.
If your goal in having the insurance was just to have copayments, the plan with all the co-pays would have saved you 1000 dollars for the year. However, you have put yourself at a total risk of $9000 in additional bills for the same cost. If 1 person out of the 4 incurred a hospital visit or surgery or other large expense, you would at that point be in a much better position with the HSA plans.

You also would have been able to deduct 100% of the spending on the HSA expenses off your income tax bill by first depositing the money used into an HSA account, saving anywhere from 15-39% on the costs when related to your tax burden at the end of the year.
Which leads to the question, what was the reason you wanted insurance in the first place? To lower the amount of money you could risk losing, or to save some money on doctors visits? Is it worth it to save 1000 in doctor visits and drug copays to put yourself at risk of spending 7000 more in hospital bills?
If you look at the total spending, the 5000 HSA plan on the right ends up easily being the best option for a healthy family of 4 under these circumstances, in both cost and overall risk. You spend less than on the 2500 deductible copay plan, you have less risk, and your total maximum costs are 2500 dollars less for the year. It is also the cheapest of the 4 plans.

If you’d like to see customized quotes on any of the above mentioned plan options, please visit my quote site at Tennessee Health Insurance Quotes.

What I am going to show today is a list of standalone dental products in TN that do not require purchase of the companies health insurance product to go along with them, their costs, benefits, and give a couple recommendations as to which companies I would say were the best value.

There are 2 basic types of dental insurance.

• PPO – Gives lower cost discounted rates by using a network dentist, higher prices outside of the provider network.
• Indemnity – Reimburses cost of services for any dentist, does not require use of a network.

The PPO plans tend to be a little cheaper overall, depending on company.

This is not a complete list, however this list does include the plans in this area that are competitive.  All plans do have waiting periods and other differences inside the plan options, and not all dentists are in all networks.

In particular, Delta has possibly the largest and best network, but you do pay a higher cost for access to their network, as seen in the pricing.  The UHC value dental plan is a great bargain plan, but you do have to use their network providers or the out of network costs are extremely expensive.  The world plans are good because of the indemnity nature allowing you to use any dentist, however as you can see for certain services you do pay more out of pocket, depending on plan options.

Most plans have no waiting period for cleanings (World is 3 months), and a limit of 2 per year.  They basically all have a 6 month waiting period for basic services, and 12 month (18 for world) waiting period for major services.

• Preventive Services include cleaning, exam, xray, flouride treatments.
• Basic Services include Fillings and Extractions.
• Major Services Include Scaling, Root Canals, Crowns, Oral Surgery, and in some plans Dentures or Braces.

The basic question here to the value of these plans to you has to be based on family or personal history.  The least expensive plan is $214 per year.  Unless you need some work done, the premium cost will exceed the average cost of cleanings and exams.

However, in the case that you need any major work, the plans to work out to a savings.  A root canal can cost over 1000$ at retail value.  Using a PPO network you get the discounted rate the network provides, plus the % plan discount.  The savings average to around 700 dollars per root canal, which pays for the plan twice over.  Same can be said of crowns, and scaling.

Overall I believe all these plans are good options, I believe personally that the UHC value, Delta, and World Plan 3 are the best of the bunch.  The choice here would be based on provider network and waiting period you are willing to have.

If you need any help with dental insurance or tennessee health insurance, please click the link to contact.

The costs above are based on prices for Middle Tennessee TODAY, some variation is always going to occur.  Please contact for current pricing on any plan.  Nashville area zip codes sometimes have higher rates depending on company.

What is a HSA?

An HSA, or Health Savings Account, is a bank account with special tax benefits that can be used in conjunction with specifically designed health insurance plans. They typically offer savings over a copay based plan with lower overall premiums and total annual costs.

Advantages:

• Funds in Account are yours.
• You can change health care providers and plans with no penalty and keep your money.
• Funds in account can be used to purchase any items related to medical expense, as outlined by IRS publication 502, without paying income tax, social security, or Medicare tax on money spent.
• Funds grow tax free.
• Supplemental coverage is allowed.
• Accident and Critical Illness Insurance can be used to pay deductible in case of a major event.
• Funds deposited are not subject to federal or state income tax, or Social Security/Medicare tax.  This works out to a 10% or higher discount on all medical expenses.

Disadvantages:

• 10% tax penalty to remove funds before age 65. (Waved for death or disability.)
• Taxed as normal income after age 65 when removed from account.
• Can be used to buy Medicare Supplement, Part D or pay for medical costs tax free even after 65.
• Must have eligible insurance plan.

Most HSA plans are structured so that you pay for all costs before deductible is met, other than preventive office visits offered in some plans.

HSA Plan Requirements – HDHP Plan Requirements

HSA Plans, also referred to as HDHP plans, are required to open an HSA Bank Account. They have specific federal requirements to qualify for the designation and allow you to open an HSA account. Plan Benefit Requirements:

• Minimum Deductible of 1200 for individual or 2400 for family.
• No first dollar benefits other than preventive care.
• Preventive care includes annual physicals, cancer screenings, well woman exams, prostate exams.
• Companies treat this benefit differently, review details carefully.

Typically in my state, Tennessee, the companies with the lowest rates right now and best benefits are Humana and BlueCross BlueShield of TN, followed closely by UnitedHealthCare Golden Rule.  As with any plan, the correct company depends on benefits needed and underwriting considerations, and can vary based on a lot of factors.  Commonly if all members are healthy, with no pre-existing conditions, BlueCross tends to be the least expensive here right now.

What happens to funds in the account?

You can spend funds inside the account to pay for any medical expenses, or allowable dental and vision expenses, as outlined in the IRS publication 502. A easy way to do so is to have a debit card used to pay for those specific expenses.  You can also use the funds to purchase securities, stocks, bonds, or other investments depending on the account servicer, and all earnings are interest free. At age 65 or in the case of death or disability you can remove funds from the account with no penalty, only paying standard income taxes as if you had earned the amount withdrawn from working. Before age 65, there is a 10% tax penalty for removing funds. This does not apply if moving funds from one HSA account to another, such as changing banks.

Where do I get a HSA account?

Most local banks offer HSA accounts, however the benefits of those accounts are often not as good as online only account offerings.  Pay special attention to the monthly fee, annual fee, minimum account requirement to avoid fees, and any charges related to use of a debit card inside the account or to transfer funds.  A good rule of thumb here is that if you have under 3000 in the account, it is going to cost you around 2.50 per month to keep the account open.  Anything more than that, look for a different bank.  Banks here in Cookeville, TN, vary between 2.50 to 5 dollars per month, some with annual fees that are charged regardless.  A full list is available in table form at my websites HSA plan information page.

My personal reccomendation is HSA Bank.com.  They have a good rate structure, no fees over 3000 dollars in account, and allow trading with TD Waterhouse inside the account.  You can use the account much in the same way as a 401k, allowing 2 tax-free vehicles for retirement savings.

Potential Uses

Everyone’s medical situation is different.  For someone with no chronic conditions, that just wants a catastrophic form of coverage, a 5000 or 10000 deductible plan is perfect.  These plans offer a wellness benefit, low premiums, ability to open a HSA account for savings, plus insure you against a major event.  I normally suggest adding a accident/ci plan to anything over a 2500 deductible, so you do not have 1 accident cause you to be out of pocket over 2500 in 1 event.

Accident plans pay a per event or per year max to reemburse any medical expenses incurred by accident.  They can be had in addition to a HSA plan, in order to reduce risks cheaply.  A typical accident plan costs between 44.95 to 70 dollars for a family of 4, to cover between 5000-15000 in accidental coverage and 5000-10000 in critial event coverage.

A HSA combined with a supplementary coverage in this way only exposes you to risk from illness and costs of medication.  You still end up paying much less than a PPO copay plan would typically cost, under 300 per month for a family of 4 in my area is average.

Why use a HSA plan instead of a traditional copay plan?

One word:  Cost.

All things being equal, the least medical expense risk you can expose yourself to for the lowest price is usually found within a HSA plan.  Traditional copay insurance plans usually charge you the average of all people in your insurance class’s average costs, plus 25% to determine premiums.  If you have an unlimited copay plan, and the average plan user goes to the doctor 8 times per year, and you go once, you are paying the average cost of 8 visits plus 25%, and not using 7 visits you are paying for.

An HSA plan takes the responsibility of paying for the doctor visits and passes the savings on to the consumer, you can take the difference in cost, deposit that into your HSA account, and have the funds there in case you do need them.  If not, you can save money in the account equal to your deductible, or continue to deposit funds in order to build the account as a retirement vehicle.

You have the choice what happens with your money in these plans, not the insurance company.  The savings for an average family of 4 over the course of one year in premiums is usually over 4000 dollars when compared to a copay plan with the same deductible.  Even people who want to limit their risk as much as possible are typically best served by taking a lower deductible HSA plan, rather than taking a copay plan.

H.R. 4872, THE HEALTH CARE & EDUCATION AFFORDABILITY RECONCILIATION ACT of 2010
SECTION-BY-SECTION ANALYSIS

There are good and bad parts.  Most of the Bad is stuff I don’t even understand why it has a place in a health care bill.  Here are the factors that will affect all of us.

Sec. 1101.  Closing the Medicare prescription drug “donut hole”. Provides a $250 rebate for all Medicare Part D enrollees who enter the donut hole in 2010.  Builds on pharmaceutical manufacturers’ 50% discount on brand-name drugs beginning in 2011 to completely close the donut hole with 75% discounts on brand-name and generic drugs by 2020.

That was needed.  Right now the out of pocket cost on a Senior with say COPD averages over 5000 per year.  This will in theory lower it this year to 4750, and next year to around 3750, down to about 3000 in 2020.  The way this system worked caused very sick people to ration drugs they needed to stay alive.

Sec. 1103.  Savings from limits on MA plan administrative costs. Ensures Medicare Advantage plans spend at least 85% of revenue on medical costs or activities that improve quality of care, rather than profit and overhead.

Some MA providers were spending as much as 40% on “administrative costs”.  That means for every dollar they took in, they were spending 60 cents on care.  That is unacceptable.  I heard initially they were going to cap this at 80%, but 85% is better in my opinion.  May run some of the carriers completely out of the MA business though.  Seems like the writing is probably on the wall for “Today’s Options”, but I suspect Humana, Healthspring, and BlueCross will stay in the market.

Sec. 1402.  Medicare tax. Modifies the tax to include net investment income in the taxable base.  Currently, the Medicare tax does not apply to net investment income.    The Medicare tax on net investment income does not apply if modified adjusted gross income is less than $250,000 in the case of a joint return, or $200,000 in the case of a single return.  Net investment income is interest, dividends, royalties, rents, gross income from a trade or business involving passive activities, and net gain from disposition of property (other than property held in a trade or business).  Net investment income is reduced by properly allocable deductions to such income.

Capital gains now get taxed for medicare if you have more than 250,000 in earnings.  I still feel like this is too little, as a working person has their first dollar taxed, but this was needed.  My opinion was that capital gains should be subject to the exact same rules as regular working income, but this is better than putting all the taxes on people who are employed by someone else.

Sec. 2301.  Insurance Reforms. Extends the prohibition of lifetime limits, prohibition on rescissions, limitations on excessive waiting periods, and a requirement to provide coverage for non-dependent children up to age 26 to all existing health insurance plans starting six months after enactment.   For group health plans, prohibits pre-existing condition exclusions in 2014, restricts annual limits beginning six months after enactment, and prohibits them starting in 2014. For coverage of non-dependent children prior to 2014, the requirement on group health plans is limited to those adult children without an employer offer of coverage.

Again, this is a change for the better, but it is going to cause everyone’s rates to rise.  I wish they had found a way to reward good behavior and punish bad behavior in this, but its a start.

Most of the rest of the bill, I don’t understand why its there.  It is filled with student loans, Biofuels tax credits, wierdness about medicaid, and handouts to pharmacutical and health insurance companies where none were really necessary.

The ugly:

Sec. 1001.  Affordability. Improves the financing for premiums and cost sharing for individuals with incomes up to 400% of the federal poverty level.  Subsection (a) improves tax credits to make premiums more affordable as a percent of income; and subsection (b) improves support for cost sharing, focusing on those with incomes below 250% of the federal poverty level.  Starting in 2019, constrains the growth in tax credits if premiums are growing faster than the consumer price index, unless spending is more than 10% below current CBO projections.

Sec. 1002.  Individual responsibility. Modifies the assessment that individuals who choose to remain uninsured pay in three ways: (a) exempts the income below the filing threshold, (b) lowers the flat payment from $495 to $325 in 2015 and from $750 to $695 in 2016 and (c) raises the percent of income that is an alternative payment amount from 0.5 to 1.0% in 2014, 1.0 to 2.0% in 2015, and 2.0 to 2.5% for 2016 and subsequent years to make the assessment more progressive.

There is the provision about a tax related to not purchasing health care that frankly I don’t agree with really.  I do get the point that if everyone waits until they’re sick just to take advantage of the no preexisting conditions law that is being put into place it would make rates skyrocket, so they’re by appearances anyway doing that in order to spread risk more equally among the healthy.

It does appear that the measure that does that does not kick in for 4 years so its possible it will change before then anyway.  I do understand the reasoning.  I’m just sort of neutral about it, I don’t love how they went about it but I don’t see a better way.

The problem is, you can’t figure out how much you need.  No one really gives you a simple answer, and you do know one thing, you do not want to spend more money than necessary on it because you don’t have the money to waste.

Here’s the problem, simply.  You aren’t looking at it from the perspective of what you are actually trying to protect and how much that costs.  It’s actually much easier to figure out than you think.

Debts + Obligations = Insurance need

Think about that for a second.  It’s simple.  If you have 250,000 dollars in house mortgage, 10,000 in auto loans, 5000 in credit cards, you have 265,000 in debt.

What I specifically mean in Obligations is what bills are you going to leave behind that will be impossible to be paid if you were to pass away.  You should insure yourself if at all possible to provide your portion of the household income and enough money per child to cover most of college until your children are out of the house, and enough to protect your spouse so they do not struggle to keep up with household bills and obligations other than debts.

The average cost 4 years of college per child is 60,000.  If you currently earn 40,000 per year, you should figure that until the kids are out of the house as well, then about half that for at least 10 more years.

3 children, youngest 10 years old, full income for 8 years, half income for 10 more = 680,000.

Policy length to save money here should be equal to the length of the specific need.  Now, since in the example I’ve given here the youngest child is 10, you need a 10 year term policy for 680,000.  If your mortgage length is 30 years, you need a 30 year term policy as well, for 265,000.

Overall for a healthy 30-35 year old you aren’t talking about a great expense.  This may sound crazy, because we’re talking about nearly a million dollars worth of insurance.  The prices will surprise you.

700,000 of 10 year term life insurance is 18 dollars per month.  250,000 of 30 year term is 25 dollars.  You’re talking about a total expense here of 43 dollars per month.

I also would personally suggest a small permanent UL policy to insure burial needs and other expenses related to estate transfer for literally everyone.  This in my opinion is the most important piece of the puzzle.  Frankly, you can take out a policy like this on your kids and be totally justified, because the rate is locked in forever.  30 dollars a month buys 50,000 on a 35 year old man, and that rate is locked in and never expires.

Without interest, it takes over 100 years to pay 50,000 in at 30 dollars per month.

My personal belief is that the priority is:

Burial expenses > debt > obligations

You can take care of your family for all 3 things if you’re 35 and healthy for 70 dollars a month.  Is your families well being worth 2.50 a day?

I am a dual licensed health and life agent in Cookeville, TN.  I’m appointed with basically every major carrier in my state that allows independent agents: 9 medicare supplement carriers, 7 major medical carriers, 3 medicare advantage carriers, about 14 different part D product carriers, and 10 or so life insurance companies.  I constantly add new carriers whenever I need a product any of them sell.  Probably 90% of my sales come from people who already had plans in place but were sold something that was either overpriced or didn’t actually fit their needs.

My day to day strategy for sales is literally to take people that already had insurance and give them more or better coverage for cheaper.  I do that by constant carrier research, and knowing which companies have the cheapest plans with the best coverage in each area that I work in.

To start, let me explain, I always felt like I couldn’t trust insurance agents.  I still feel that way about 80% of the people I speak to that sell insurance.  I don’t know what it is, I just feel like they’re ultimately not out to help people they’re more in it to sell a product.  I don’t know what it is, it literally may just be some preconceived notion that I had toward the profession.

It strikes me personally that this is one of the few jobs where by mistakes or doing things correctly you have a huge impact financially on the person you work with.  I have personally rewritten policies on 2 people that saved them over 5000 dollars a year, just because whoever did the policy originally cut corners or did not know the products available, or exclusively sold one brand of a certain insurance and did not offer alternatives.  In the region I live in, 5000 dollars is 1/3 of a lot of peoples annual income.

When I started out I got recruited to sell mortgage protection insurance and realized I really didn’t like what I was doing.  I figured out through research that there was a better way to go about things, and went out on my own.  I have been teaching myself the different insurance lines, carriers, and products through tons of study, and asking questions of people who have been in the business longer than me for the last year.  I now work on average 80 hours a week on insurance, either in sales directly to clients or on my webpage or on research.

My goal here is to simplify the explanations of how the products work.  9 out of 10 people I speak with on a day to day basis do not understand their insurance plan.  I feel like the process is almost intentionally made hard to understand.  A lot of agents seem to further complicate the issue by frankly just being lazy.

It is easier to sell something by convincing someone to buy it because they like you than it is to sell a product on logic and merit.  It is easier to lie and submit an application that is going to come back with rate increases and riders and hope the client doesn’t cancel than it is to find the correct product.  It is easier to ignore problems than apologize to the people you made mistakes on and try to correct what you did wrong and better the situation.

Doing insurance the easy way is the primary mistake I see.  I am not saying I am the best at anything, but I’m definitely not the worst, and I have no problem being objective and honest.

You can expect to see articles here explaining the basics of health life and medicare insurance, how the companies work, what underwriting is and how to maximize your insurance for the lowest possible cost.  I’ll probably also drift off time to time into explaining how social programs work, who they benefit, and where to qualify for them.