Auto Insurance Principles Should Apply To Health Insurance
Many Americans rely on their automobiles to get to work. No automobile means no job, no rent or mortgage money, no food. A single parent, struggling to make ends meet in the suburbs with 100,000 miles on the odometer, would presumably welcome the guaranteed opportunity for low-priced insurance that would take care of every possible repair on her auto until the day that it reaches 200,000 miles or falls apart, whichever comes first. Especially if the insurance is valid regardless of whether she even changes the oil in the interim.
So why aren’t the auto insurance companies writing such coverage, either directly or through used auto dealers? And given the importance of reliable transportation, why isn’t the public demanding such coverage? The answer is that both auto insurers and the public know that such insurance can’t be written for a premium the insured can afford, while still allowing the insurers to stay solvent and make a profit. As a society, we intuitively understand that the costs associated with taking care of every mechanical need of an old automobile, particularly in the absence of regular maintenance, aren’t insurable. Yet we don’t seem to have these same intuitions with respect to health insurance.
If we pull the emotions out of health insurance, which is admittedly hard to do even for this author, and look at health insurance from the economic perspective, there are several insights from auto insurance that can illuminate the design, risk selection, and rating of health insurance.
Auto insurance comes in two forms: the traditional insurance you buy from your agent or direct from an insurance company, and warranties that are purchased from auto manufacturers and dealers. Both are risk transfer and sharing devices and I’ll generically refer to both as insurance. Because auto third-party liability insurance has no equivalent in health insurance, for traditional auto insurance, I’ll examine only collision and comprehensive insurance – insurance covering the vehicle – and not third-party liability insurance.
Bumper to Bumper
The following are some commonly accepted principles from auto insurance:
* Bad maintenance voids certain insurance. If an automobile owner never changes the oil, the auto’s power train warranty is void. In fact, not only does the oil need to be changed, the change needs to be performed by a certified mechanic and documented. Collision insurance doesn’t cover cars purposefully driven over a cliff.
* The best insurance is offered for new models. Bumper-to-bumper warranties are offered only on new cars. As they roll off the assembly line, automobiles have a low and relatively consistent risk profile, satisfying the actuarial test for insurance pricing. Furthermore, auto manufacturers usually wrap at least some coverage into the price of the new auto in order to encourage an ongoing relationship with the owner.
* Limited insurance is offered for old model autos. Increasingly limited insurance is offered for old model autos. The bumper-to-bumper warranty expires, the power train warranty eventually expires, and the amount of collision and comprehensive insurance steadily decreases based on the market value of the auto.
* Certain older autos qualify for additional insurance. Certain older autos can qualify for additional coverage, either in terms of warranties for used autos or increased collision and comprehensive insurance for vintage autos. But such insurance is offered only after a careful inspection of the automobile itself.
* No insurance is offered for normal wear and tear. Wiper blades need replacement, brake pads wear out, and bumpers get dings. These aren’t insurable events. To the extent that a new car dealer will sometimes cover some of these costs, we intuitively understand that we’re ‘paying for it’ in the cost of the automobile and that it’s ‘not really’ insurance.
* Accidents are the only insurable event for the oldest automobiles. Accidents are generally insurable events even for the oldest autos; with few exceptions service work isn’t.
* Insurance doesn’t restore all vehicles to pre-accident condition. Auto insurance is limited. If the damage to the auto at any age exceeds the value of the auto, the insurer then pays only the value of the auto. With the exception of vintage autos, the value assigned to the auto goes down over time. So whereas accidents are insurable at any vehicle age, the amount of the accident insurance is increasingly limited.
* Insurance is priced to the risk. Insurance is priced based on the risk profile of both the automobile and the driver. The auto insurer carefully examines both when setting rates.
* We pay for our own insurance. And with few exceptions, automobile insurance isn’t tax deductible. As a result, the fear of increasing insurance rates due to traffic violations and/or accidents changes our driving behavior and we sometimes select our automobiles based on their insurability.
Each of the above principles is supported by solid actuarial theory. Although most Americans can’t describe the underlying actuarial theories, most everyone understands the above principles of auto insurance at the intuitive level. For sure, as indispensable automobiles are to our lifestyles, there is no loud national movement, accompanied by moral outrage, to change these principles.
Unsustainable Market
In contrast, similar principles are routinely violated in health insurance. To demonstrate this, let’s return to the same suburban mother from the opening paragraph. She’s busy working, driving to and from work, and driving her kids to school and activities. She ends each day exhausted, sitting on the couch with fast food. She’s obese, has a sedentary life, a bad diet, and hasn’t taken the time to go to the doctor in years. After a simple injury doesn’t heal for weeks, she turns up at the emergency room and learns she has type II diabetes. Although type II diabetes is controllable, changing diet and exercise habits and properly tracking her condition takes time and effort and she’s never quite successful in implementing the necessary lifestyle changes.
So the initial emergency room visit is only the first of a long list of health care related to non-controlled diabetes and other problems associated with obesity. Whether she has individual or group insurance, her insurance pays for each episode of care, without singling her out for a premium increase, and without charging her any more cost sharing than is charged to the healthiest and most medically diligent insureds. Her coverage continues until she voluntarily changes insurance companies and/or employers or becomes eligible for Medicare. If she’s covered under group insurance she may not even pay any premium. Her insurance continues unabated, even though the disease was caused by neglecting her body and she maintains her poor lifestyle even after the disease becomes known.
This just wouldn’t happen in auto insurance. This scenario is the auto insurance equivalent of guaranteed access to low-priced auto insurance that takes care of every possible repair, including damage already done, until the day the car falls apart so completely it’s unsalvageable (death) or reaches 200,000 miles (Medicare), regardless of whether she even changes the oil (takes care of herself) in the interim.
As a society, we don’t expect this in private-market auto insurance, but we expect it in private-market health insurance. Furthermore, there’s a chorus of national and state interests, which continuously pushes us further away from the auto insurance principles.
The current private health insurance market isn’t sustainable. Prices have been consistently increasing faster than inflation for decades. Each year, insureds use more health care than ever before and more people have no insurance at all. Most actuaries and other people in the private health insurance market don’t want national health insurance with its bureaucracy and one-size-fits-all benefits. Yet, we’re trying to sustain a private insurance system, which violates the very principles we know are necessary for private insurance markets.
Yes, health insurance involves the sacredness of human life and is therefore different from auto insurance. But if we’re to sustain a private-market solution to health insurance, actuaries need to explain to the larger society, in terms that society understands, the rationale for the following principles:
* As sacred as health care is, it’s still an economic transaction that has to be balanced by individuals and societies, against other economic choices. It can’t be unlimited. Sometimes it will be secondary to other choices. On a given day, for example, the mother in our scenario may value her car more than her health.
* Insurance premiums should be paid by the individual and tied to controllable risk factors. This will provide the best incentive for the control of risk factors.
* Although it’s hard to draw the line between abuse, neglect and ignorance, self-abuse shouldn’t be insured and we need to draw that line somewhere.
* The private market can’t provide unlimited, self-directed health insurance.
* Routine care and ongoing treatments of chronic conditions can be pre-funded, can even be subsidized, but they don’t constitute ‘insurable events.’
* Insurance can’t be expected to keep every human body in pristine condition. No amount of health care will prevent everyone’s ultimate death.
* Comprehensive, unlimited, non-subsidized private-market coverage isn’t possible for people with severely impaired health.
* The private health market can provide limited non-subsidized health insurance, such as protection from accidents, to even health-impaired individuals.
* Individuals who can afford to do so and who take good care of themselves should be able to ‘buy up’ to better coverage. People have the option of buying up for everything else in life.
Discussion of these principles is lacking from most of the current health insurance debate. If society can intuitively understand how similar principles apply to health insurance, then they should be able understand the principles in the health insurance context. We need to initiate the debate.
This commentary is solely the opinion of its author. It does not express the official policy of the American Academy of Actuaries; nor does it necessarily reflect the opinions of the Academy’s individual officers, members, or staff
Contingencies, Jan/Feb 2007
Melih Oztalay
http://www.articlesbase.com/non-fiction-articles/auto-insurance-principles-should-apply-to-health-insurance-110015.html
Health Insurance, Group Health Insurance in Alpine CA 91901
Harris Financial & Insurance Inc serves the Alpine and San Diego areas with their Annuities, Health, Group and Individual Health, Term Life and Disability Insurance plans. Call our offices in Alpine today!
Duration : 0:0:43
How do you work with long term insurance companies?
I own an in-home elderly care agency, however, due to the fact that the services are expensive, most clients can’t pay out of pocket, so I need to begin billing their long term care insurance company.
I’m wondering, what is the process to begin working and getting paid from long term insurance companies?
Not many people have long term care insurance and they certainly can’t buy it when they already need it.
Try contacting some of the major players, such as Metlife and Hartford and ask them.
Everything You Need to Know About the Health Benefits of Antioxidants
You don’t realize it yet, but in few minutes you’re going to learn of the easiest steps you can take in order to look attractive and live healthier long into your golden years. This secret is antioxidants. Antioxidants are the super foods that will enable you to live a long, healthy, and attractive, life. Antioxidants contain molecules that remove other, bad molecules from your body. These bad molecules contain oxygen and they react with your cell and tissues in a volatile way that can lead to illness and overall poor health.
The process can be compared to the oxidation of car paint on older cars that have not been properly cared for with regular washing and protection from the sun. Imagine that these bad molecules are doing the same to your body, fading away your outside so that your features look older and worn.
What Foods Have Antioxidants?
Antioxidants can be found in several different types of foods. The absolute best antioxidants come from fruits and vegetables. An apple a day will truly keep the doctor away, as well as help you age much better. In fact, the proper balance of antioxidants in your diet combined with exercise can keep you looking 35 years old when you’re actually 45.
Are Antioxidants Just Another Diet Fad?
No. The benefits of antioxidants are scientific fact. Of course, we’re all probably seen late not infomercials where some company is selling lotions and creams that they claim contain antioxidants which help slow the aging process. However, these are scams. Antioxidants only work when ingested in the body. Thus, if you want to experience the health benefits of antioxidants, then you have to eat them. Fruits and vegetables are your best source.
Are There Any Particular Foods That Are Really High in Antioxidants?
Yes. In general, brightly colored fruits and vegetables are best. These include spinach, broccoli, Brussels sprouts, tomatoes, red bell peppers, carrots squash, grapefruit, berries, oranges, plums, grapes, apricots, and peaches. And if you’re a fan of dried fruit, you can also get the same health benefits, so don’t worry about having to give them up.
Earlier You Mentioned There Are Other Foods Besides Fruits and Vegetables That Contain Antioxidants?
Yes, I did. One of those foods is chocolate. Chocolate actually has a higher content of antioxidants than fruits and vegetables. However, don’t assume you can eat a couple of candy bars a day and be fine. Remember, chocolate is full of sugar and other fattening products that can be counterproductive to your goals for living a healthy lifestyle.
A well balanced mixture of all of the foods above is a great start to living healthier and helping to ensure a more attractive looking persona. Antioxidants not only help with weight and positive physical feelings, but the psychological feelings of looking good are also beneficial to an overall healthy lifestyle. The benefits of antioxidants are numerous so if you’re intent on living long and staying attractive, they are the first step to take in reaching this goal.
Yuki Shoji
http://www.articlesbase.com/health-articles/everything-you-need-to-know-about-the-health-benefits-of-antioxidants-129318.html
Where to Get Cheap Group Health Insurance Quotes Online
With all the different group health insurance plans out there, finding the cheapest plan with the best coverage can be a real pain in the you-know-what. Here’s an easy way to find cheap group health insurance quotes online.
Group Health Insurance Plans
Before you go shopping for group health insurance the first thing you need to do is sit down and figure out what type of insurance and what kinds of coverage you really need.
Most employers opt for managed health care plans – HMOs, PPOs, and POSs. These plans provide you with a network of health care providers which everyone in the plan goes to when they’re ill.
HMOs restrict you to using physicians within the network, while PPOs and POSs let you see non-network physicians for an extra fee. HMOs are the cheapest of the managed health care plans.
Group Health Insurance Coverage
Group health insurance plans all come with different coverages. Here are the main coverages you should consider:
* Hospital coverage pays for your hospital room and medical services.
* Surgical coverage pays for surgeons fees and surgical expenses.
* Physicians coverage pays for doctors’ office visits and hospital visits.
* Major medical coverage pays for catastrophic injury or illness expenses.
* Prescription drug coverage pays for all or part of prescription drug costs.
Comparison Shop
The difference in group health insurance plans from one insurance company to another can be $1,000 per person or more, so the first step toward getting cheap group health insurance is to comparison shop.
Thanks to the Internet you don’t have to visit a bunch of insurance companies or call their agents on the phone. All it takes is a couple of clicks of your mouse to get group insurance quotes from companies in your area.
Some of these websites offer insurance tips and advice, and some even let you talk with an insurance expert via their online chat service. (See link below.)
Visit http://www.LowerRateQuotes.com/health-insurance.html or click on the following link to get group health insurance quotes online from top-rated companies in your area and see how much you can save. You can get more health insurance tips by checking out their “Articles” section.
ryan@thesatellitetvguide.com
http://www.articlesbase.com/insurance-articles/where-to-get-cheap-group-health-insurance-quotes-online-124595.html
YTB offers free group health insurance to their top producers
YTB announces free guarantee issue life insurance for it’s Directors!
And, best of all, YTB also recently announced that reaching the level of Director has become easier with new simpler qualifications.
Duration : 0:1:59
How to Get Your Pre-Existing Condition Health Insurance Coverage Approved
Having pre-existing conditions such as diabetes and heart ailments usually put individuals at risk for losing their security since they are considered to be liabilities in the short and long term. You have to show the agencies that you can adequately pay for the premium, as well as stay healthy enough to give them their dues too. Here are some tips from the experts.
People Unable to Get Coverage
There are plenty of individuals who are unable to purchase private health insurance because they have a known health condition or problem that is very expensive to treat. Insurance companies have the right to refuse to cover such individuals since they are considered as liabilities and may cost the company more than the actual premium that the individuals pay for. The insurer has to pay for medical fees expected from the individual.
When individuals get sick while on a coverage from one insurance carrier, they may be forced to leave the carrier to search for a new one, because they change occupation or the original insurer cancels the policy. The original insurer has to cover the primary phase of the condition, but new insurers will not want to pay for subsequent treatments. Big companies usually pay for all or any conditions, pre-existing or not to attract people with current medical problems, which is why a lot of individuals are attracted to their policies.
HIPAA Description
HIPAA or the Health Insurance Portability and Accountability Act was passed on July 1, 1997. The act includes a lot of aspects in health care, and already had a profound effect on health care being available to a lot of individuals in America. Because of HIPAA, there are rules that limit the longest amount of time that a pre-existing exclusion can be applied to a group plan. There are ways wherein you can minimize or eliminate the exclusion completely. Using the HIPAA guidelines, the highest amount of time that you need to wait to get more coverage for the pre-existing condition cannot go beyond 12 months or 18 months for those who enrolled late.
The main goal of HIPAA is to make sure that individuals with pre-existing conditions still benefit from health insurance. There is credible coverage by HIPAA too which pertains to any health insurance you had in the past, given that it was not interrupted over a period of 63 or more days. The time period can extend, depending on the laws of the sate and the kind of insurance plan you had before.
More on HIPAA
If you have provided sufficient evidence that you had uninterrupted insurance before the current plan, the insurance coverage can be credited toward any pre-existing condition exclusion you have before. If you had a minimum of 1 year of group health insurance during a single occupation then got health insurance at a new work without getting a break longer than 63 days, exclusion on any pre-existing condition you may have cannot be imposed by the new health insurance plan.
Exclusions for hidden pre-existing condition include denial of medical coverage for the treatment of injury stemming from accident before the plan was acquired, counting the coverage of a previous health insurance toward another plan’s lifetime coverage limit and failing to cover a congenital medical condition, if the condition can be covered if found not to be of congenital origin.
Low Jeremy
http://www.articlesbase.com/finance-articles/how-to-get-your-preexisting-condition-health-insurance-coverage-approved-707764.html
How To Get Affordable, Low Cost Health Insurance
There are several ways you can obtain affordable, low cost health insurance. If you’re employed, your employer may offer a group health insurance plan for employees. Married individuals can usually opt to be covered under their spouses’ health insurance – their children can be covered, too. If you belong to a club or organization, you may be able to take advantage of group medical benefits offered by the club or organization. Of course, you may be able to afford an individual health insurance plan.
However, if none of these apply to you, and purchasing an individual health insurance plan isn’t a financial option, perhaps it’s time to contact your state’s department of insurance. Most state’s in America offer some sort of medical benefits package to residents who can’t otherwise afford an affordable, low cost health insurance plan. Or, perhaps you can afford to purchase an individual health insurance plan, but are continually denied coverage due to a pre-existing health condition. Some states also offer health insurance plans for individuals in this situation, too.
Each state sets forth its own criteria for state-sponsored health care coverage eligibility. You may need to meet certain financial requirements, i.e., not make enough money to be considered able to purchase your own health insurance plan. You may need to have a certain number of individuals in your household, or you may need to have a certain number of dependents. If you’re looking into a state-sponsored health care program because you haven’t had success finding an independent health insurance plan due to a pre-existing health condition, you may need to show proof of a certain number of attempts before your state considers you eligible.
Remember, regardless of whether you’re eligible for affordable, low cost health insurance from your state’s health care program, your child or children may be eligible. Always find out your state’s criteria for children eligibility, and make sure your children have adequate health coverage.
Elizabeth Newberry
http://www.articlesbase.com/finance-articles/how-to-get-affordable-low-cost-health-insurance-96526.html
How many people constitutes a group to qualify for group health insurance?
My wife and I run our own small business can we qualify for a group health insurance plan?
Usually the minimum is 2, as long as you are both on the payroll and keep payroll records. But having said that there are many options for small business owners you should speak with an agent who can show you all of the options available to you.
I hope this helps!
Discover the Crucial Mineral Water Benefits Guaranteed to Improve Your Health
You’ve probably heard it a hundred times how we all need to drink more water, but it is vital we enjoy the mineral water benefits available to us by using one of the mineral revitalization water purification systems.
Mineral water benefits us in many ways. Above all, studies have shown how minerals are more easily absorbed in the body via water than by many of the foods we eat. This means it is vital for us to get many of the minerals we need from our drinking water.
After a multi-year study, the World Health Organization concludes that “drinking water should contain minimum levels of certain essential minerals.” That should leave us in no doubt at all of the mineral water benefits.
Nowhere on the planet has water ever existed without the essential minerals such as calcium and magnesium. If we don’t get enough of these from our water, our bodies will literally pull them from our teeth and bones to compensate.
Many systems on the market today are mineral revitalization water purification systems, like reverse osmosis, which strip the water of its minerals and then you have to add a filter to try and restore those lost minerals. What’s the point of that? And boy are they expensive!
To gain the mineral water benefits you need a system that will leave them in and not remove them in the first place. This is crucial to preserve the original integrity of the water, and the correct ph balance so the water does not become acidic.
Drinking mineral water helps keep our body in balance, and aids our immune system in the process. Scientific research has shown that mineral water aids the natural cleansing of toxins from the body as well.
So how do we get the vital mineral water benefits we need from our drinking water, without using mineral revitalization water purification systems.
The first thing to do is to find the right water filtration system. Remember, you need to protect yourself from the 2000 known toxic chemicals present in our drinking water as well as getting those minerals.
Look for one that employs multi-stage filtration using an activated carbon filter to get the most mineral water benefits. According to the US EPA these are proven to be the most effective. They are cutting-edge and easy to maintain, and the water can cost as little as 9.5 cents a gallon.
Do yourself a favor and make sure you protect yourself with a good system as outlined above to give you those mineral water benefits, and make it a point to improve the quality of the water you drink, and also safeguard your future health.
Want to learn more about the systems to avoid and which to use? Visit my website today.
Ray Hamilton
http://www.articlesbase.com/health-articles/discover-the-crucial-mineral-water-benefits-guaranteed-to-improve-your-health-749874.html