May 18, 2017

Transitions: Insurance



Insurance Coverage
No matter what Congress decides to do about the Affordable Care Act, it doesn’t change the fact that it’s important to have health insurance. It’s like car insurance: You pay for it and hope you won’t need it. If something unexpected happens, having health insurance could mean the difference between being able to move on from the situation and the potential of financial ruin leading, at its worst, to bankruptcy. As of now, children up to 26 years old can remain on a parents’ health insurance plan, but if this isn’t an option for you, then it’s best to arm yourself with some basic information about insurance.

HMO vs. PPO
When you choose an HMO, it usually means that you will select one doctor from a list of all the health care professionals in the plan, and that doctor will serve as your Primary Care Physician. This physician will coordinate all of your health care, which means that he or she treats you directly and, when necessary, manages your referral to specialists. The only exception to not going to your Primary Care Physician first is for visits to an OB/GYN or an emergency situation. When you choose a PPO, in most cases it means you have the ability to use any doctor or facility you choose within a network of providers. If the physician is “out of network,” additional fees may apply, but there still may be some coverage. A good way to determine which is right for you is to decide if you have current doctors that you wish to continue to visit. See if your doctor(s) is in the HMO plan that is offered. If so, then you may only need an HMO. But if your doctor(s) isn’t included in the HMO plan and you don’t wish to switch doctors, the PPO plan may be the better choice for you.

Cost considerations between HMO and PPO
HMOs tend to have low out-of-pocket expenses, including no deductible and low office co-pay amounts. There is usually no paperwork or claim forms to complete and some pre-existing conditions may be covered. PPO out-of-pocket expenses tend to be a little bit more than an HMO plan. But you may go to any doctor in the network at any time, without a referral, including all specialists.

Short-term health insurance
If you’re considering a short-term health plan to get you from college to a new job, for example, there are some things to be aware of: 1) Most short-term plans exclude preexisting conditions, so make sure you can get what you need; 2) If you begin treatment for a long-term illness under your short-term plan, the insurer can choose not to re-insure you once your plan has expired; 3) Short-term healthcare might not count as having “continuous coverage.” Changes to the Affordable Care Act may require continuous coverage in order to have any preexisting conditions covered. So, while these types of plans may be cheaper upfront, they may be much more costly in the long run.


Do I need Life Insurance?
It depends on your situation. A good life insurance policy would handle the financial responsibilities you leave behind, so family members wouldn’t be burdened. Unlike the funds from an estate, the benefits from a life insurance policy will go straight to your beneficiaries, without any roadblocks. Several key questions listed below can help give you “yes” signals that you may need life insurance:
  • Are you married?
  • Do you own a business?
  • Do you have dependent children?
  • Are relatives (seniors, disabled) financially dependent on you?
  • Do you possess a sizable financial estate?
  • Do you currently have major financial obligations? (mortgage, multiple loans)

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