WatchMy high-deductible Blue Shield plan premiums just went up 20% with no real explanation.
I try to shop for insurance on the web, but it's only a thicket of salesmen who won't give a clear quote and demand my phone number and email. And almost all "alternatives" are once again Blue Shield or Blue Cross which seems to have defeated the free market very effectively by combining as "Wellpoint".
Anyone have advice on getting reasonable health insurance in California?
Or should I just buy stock in Blue Shield? Ticker is WLP.
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Second question.
I have a flexible spending account at my company, but it's a use it or lose it program. How do these HSA accounts work, and why aren't they a use it or lose type of outfit?
Can I use them in the same way I would use a flexible spending account? If so, it seems like the way to go. Does anyone know the draw backs to the HSA vs a flexible spending account?
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How close is Kaiser to being a co-op?
Not sure I can get at the co-op question. But think of Kaiser as a three legged stool with insurance, hospitals and doctors as the legs. The insurance and hospitals are non-profits; the medical groups (doctors) are for-profit.
Sutter Health is trying to build a similiar structure, but contracting with (for profit) insurers. They have initiated local (non-profit) medical foundations that run the business side of doctor's medical groups (for-profit). Customer service... what a concept. I noticed a marked improvement at my doctor's office when they jointed Sutter East Bay.
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My wife had a flex accoun but now we have an HSA account. Both seem good to me, except that the flex account is "use it or lose it". We didn't have any problem spending the flex money, unfortunately for our health, but fortunately for our finances.
I think the HSA is better though, since you can just let the money roll over year after year if necessary, and it's really tax free even if you hit other deduction limits. Downsides are:
* HSA is only allowed if you have a high-deductible policy.
* You can't use HSA to pay premiums, just the medical things the policy won't pay.
* The people running the HSAs are not going to give you any investment options that are worth anything.
In fact, I read that the reason we have HSAs is because lobbyists for the banks pushed them in congress, so they could limit the investment alternatives of the HSA money, meaning they limit you to things that let them profit most on your money.
But still the tax break makes it worthwhile for us.
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Patrick says
I think Rob Rankles tip about HSBank linking with TDAmeritrade was a good one. TD is quite good IMO. Of course, you first have to accumulate some amount of funds in the account to have sufficient liquidity and avoid the balance-based fees mentioned above.
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Mill Valley, CA
Patrick says
All but your second statement is correct on the above....but the investment account at HSA Bank pays a lot better than any bank I'm aware of. I'm with a small, 7 branch chain and they pay better than them (who have interest rate better than Wells, BoA, etc, prevalent in the Bay area)
This is what they pay on the $3K sitting in there (the minimum required to avoid monthly fees) RATE CHANGE OLD = 0.84% NEW = 0.74%
Of course, it's a pittance, but better than the 0.1% I get at Tamalpais Bank (now part of Union Bank)
The tie-in with TD Ameritrade is very, very good and getting better with $9.99 unlimited trades now. Anything over that $3k gets dumped in there....which has been used to purchased primarily to purchase Silver ETF (SIVR), Gold ETF (SGOL) and a junior gold miner (name withheld as it's too speculative to feel comfortable to divulge to all here). Over 12 years, it's quite a pretty stash in there today....accumulating tax free, of course.
Most of the HSA's are saddled with high fees and few offerings....but not all, fortunately.
The key to these HSA (and previous, MSA's) is to fund your medical expenses that arise with after-tax income and NEVER touch your HSA...just let it accumulate away. That is, assuming your individual budget can do this, of course.
In fact, I have no debit card from HSA Bank even...I asked them to toss it and I save a few dollars a year not having one, as well.
Fidelity Investments has HSA accounts for employees only in a trial for the past year. So, they're priming the pump to offer them to the public, as well. I'll be leaving HSA Bank and TD Ameritrade that day that happens....I am a BIG 25 year fan of Fidelity. They're service and offerings, by phone and in person, are outrageously exacting and professional in all ways. I simply marvel at the smooth, oiled MAMMOTH machined that is Fidelity Investments.
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I am a BIG 25 year fan of Fidelity.
I have two 401ks (one with a Brokerage link account) with Fidelity and am contemplating a lazy man's rollover (aka. keep them with Fidelity in an IRA). The only thing that drives me nuts is they take a couple of days to clear a tranasaction (like selling a stock) and the funds are unavailable until this is done. I don't think I have this issue with my E*Trade Roths. Is there any reason to think that an IRA with Fidelity will not suffer the same issue?
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Mill Valley, CA
I'm not sure, EBGuy....calling them or, if you have a branch in your area (as I, fortunately, do only about 5 miles away) simply ask them.
Even at midnite in a cold sweat about something - you can get yet another calm, re-assuring, informative voice on the other end with Fidelity at all times. I simply don't know how they do it - it's cookie-cutter excellence there.
I've been with them for ~ 25 years now and they are probably 100x larger in assets under management today and their service is perfecto in my book. I cannot get over how a company can do that...I suspect it's because, despite it's size, it's family run (the Johnson's of Massachusetts) and they don't have to play to the whim of Wall Street and short term interests)
btw, for all here --Consumer Reports November 2010 issue has several pages on Health Insurers in all 50 states with rankings. They may not always be experts at everything they do, but their interests are not tainted as a non-profit entity that takes no advertisements at all.
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I’m not sure, EBGuy….calling them or, if you have a branch in your area (as I, fortunately, do only about 5 miles away) simply ask them.
Perhaps I have become too cynical; I'm assuming they'll lie to me to keep my business...
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Mill Valley, CA
I haven't caught 'em in a lie in 25 years, offhand. So refreshingly informative, too - almost every one of them over the years.
I simply do not know how they do it. It's easier to kvetch about bad service (as it's easy enough to find about), but the service at Fidelity is just spot-on in every instance I have every thrown them in 25 years.
Just a disclaimer here as I'm gushing a lot now...I have not a thing to do with Fidelity Investments other than being a very happy investor with them for ~25 years. My Dad for probably 10 years beyond that. I have their credit card (issued by FIA Card Services), too - 1.5% cash back, $0 annual fee (or points accumulation) is a deal in itself ;>)
http://personal.fidelity.com/products/checking/content/investment_rewards_card.shtml.cvsr
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jsmarket,
I'd say Vanguard and TDAmeritrade as about cookie-cutter excellent as you describe Fidelity to be. Etrade, not quite as much. All except Vanguard will try to upsell you some service or other from time to time. All you have to do is say "no thank you".
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Saint George, UT
elliemae's website
justme says
unfortunately, insurance companies will latch onto anything that they can to raise rates. A broken arm 20 years ago could have healed wrong, causing tendonitis and leading to carpal tunnel sydrome... the only reason they're gonna look hard is if there's something that could be expensive. But look they will...
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El Cerrito, CA
jsmarket says
I agree. The trick is to:
1. Pay your premiums on a high deductible plan each year. (~2k)
2. Contribute the maximum to your HSA annually. (~3k)
3. Pay your medical expenses out of pocket to the extent you possibly can and save medical reciepts. (Maximum ~4k, hopefully much less)
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Mill Valley, CA
justme says
I have accounts with all three (and TIAA-CREF, another biggie investment house, as my wife works in school system and they cater to this audience)....Fidelity has no peer for succinct, reliable information. The folks at Vanguard are always unfailingly pleasant, but not nearly as 'crisp' with their information.
Seriously, the folks are Fidelity Investments are like Cyborgs...one as good as the next. Ha.
Remarkable. I cannot wait until I can move my HSA investment accounts to Fidelity when available and ditch TD Ameritrade. Not that TD is bad...but Fidelity is THAT good and it allows me to streamline my contacts/finances a bit.
As well, they are open 24/7 (whereas Vanguard has oft short operation hours - and especially difficult for us West Coasters)
I'm not bagging Vanguard by any means - gotta' love a non-profit investment house like Vanguard with their excellent fee structure.....but, they're less informative and professional than Fidelity, in my opinion.
I've only spoken to someone at TD Ameritrade a handful of times over the years...most of my HSA investment account stuff is done online.
Anyhow - back to health insurance - rob rankles got the right handle on an HSA right, above ;>)
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An interesting link on Collectives:
http://web.archive.org/web/20050307063955/http://www.redemmas.org/collectives.shtml
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46 male
Menlo Park, CA
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rob rankles says
Where would you get such a low premium? Our premiums are $7,800/year for a family of 4 with an $8,000 deductible.
Maybe you're talking about a plan for an individual? Probably someone in their 20's?
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Patrick says
I'm now paying $2160/yr for a $4500/yr deductible/max-OOP plan. The rates will go up a lot when I hit 45 IIRC.
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I just turned 45, and they did indeed go up a lot.
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Bellingham, WA
I'd like to be back in Japan or Canada when this happens for me.
Really wonderful how I have to structure my entire life based on our suck politics here.
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jsmarket says
It appears that the data is coming from this source:
http://reportcard.ncqa.org/plan/external/plansearch.aspx
I typed "blue shield" in to the search box and got score for only 2 plans. Did anyone else have better luck?
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Mill Valley, CA
Just for reference, Patrick:
I'm 47 and have our kids on an HSA-compatible plan from Assurant Health. The deductible is $10K (ouch!) yearly...but our current premiums are a bit under $3K yearly.
My wife is on a separate plan, also HSA compatible, from Blue Shield of CA, it's $4K deductible and also about $3K yearly premiums.
My wife's just ZOOMED over 20%+ when she hit 45, as well. The above is her latest rate.
So, for about $6K yearly we're all covered from catastrophic medical issues.
I get to have an HSA, which we fund fully to the max $6150.00 for family for 2010 (which is tax deductible...so it saves some $2K+ in taxes). Then, we contribute the max $3050.00 to my wife's HSA...but it is not tax deductible...however, it accrues tax advantaged and free ;>)
Patrick says
Where would you get such a low premium? Our premiums are $7,800/year for a family of 4 with an $8,000 deductible.
Maybe you’re talking about a plan for an individual? Probably someone in their 20’s?
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El Cerrito, CA
Patrick says
This would be for an individual plan, I'm in my 30's.
For a family of 4, $7800 is probably about right more or less. There are some for ~$500 a month on ehealthinsurance.
Instead of $9000 per year, you would need to expect to have ~$20000 per year cash outlay for premiums (7k), HSA Contribs ($6k) and expenses (8k maximum out of pocket.) although you might not actually spend that per year.
---
The thing I don't like about the family plans is how they increase the financial risk; suddenly a plan that has a $5000 deductible becomes $10000 for two people. It should be $5000 per person, but it doesn't work that way.
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rob rankles says
I had to read this twice before I understood what it meant. It means that if only one person gets sick then the effective deduction limit is 10k as opposed to 5k if you had individual plans.
What a scam! There would have to be a huge premuim discount on the plan to do make it even close to worthwhile to have a family plan rather than 4 individual plans.
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Patrick, this forum should be used to generate ideas / concepts to make the system better. I understand the need to deal with what we have right now and obviously our own personal situations, but let's start thinking of ways to make it better. I suggested Collectives. Any suggestions out there?
By the way, i've always meant to tell you that www.patrick.net that you started ages ago was the only site out there gathering links on Housing Disaster... i remember in 2001 when many friends of mine who were not making very much (and perhaps lucky to be employed after the dotcom crash) were buying a house on income that didnt support the standard time proven method of the 20/80 formula nor that you should never buy a house that was 3.5x your income. I could see it happening and no one but a small minority on the web were talking about it... you were one of them. Your site was my most often visited site and my homepage for years. By 2005, no one still had a clue. 10 to 15 % gains were impossible as Schiller demonstrated so well.
It aggravates me because I feel the current home owners are just as guilty as all the banks, realtors, appraisers, lenders, and so on. The current idea of stalling foreclosures is only going to make the backlog even worse. Perhaps the banks are starting to realize that the predicted wave of foreclosures is actually really real and is going to be overwhelming.
My analogy of the housing bubble: People wandering around a really low tide cause they can pick up pretty seashells, without giving any thought to why the tide is so low... and like the massive tsunamis of 2004, when the elephants ran for the hills, they just watched and wondered just long enough to realize that a huge wave was about to sweep them away.
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I had not thought about the deductible per person before either. I feel trapped in a scammy system and I'm really pissed at the Teapartiers who DEMAND that we all be fucked harder by the insurance and drug companies because anything else would be socialism.
But they never see that insurance is a commodity which makes huge profits because it doesn't have to compete in a free market anyway.
I think the collectives idea has some merit. Here are some others:
* Everyone should be charged exactly the same amount for the same service, by law. Currently, people without insurance are charged way more than others for the same treatment. Just because they can.
* Price lists should be presented before every non-emergency treatment, by law. Currently, no one asks what anything costs and even if you ask they don't seem to know or won't tell you, or look disgusted that you would even ask.
* All insurance policies should be standardized into just a few by law, like A, B, C, or D. Policy A from Blue Shield will cover exactly the same things at the same rates as policy A from Kaiser. This would make it far easier to shop and know what you're getting.
* Of course you should be able to buy a policy from any insurer in the country, not just from one in your own state.
* Individuals should be able to deduct premiums from the income, just like employers deduct it from corporate income and pass that benefit on to employees.
None of these would harm the quality of medical care at all, but it would give all of us much more freedom and ability to make the right choices.
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El Cerrito, CA
I think the ability to make the right choices is really important.
Right now, an individual has very little idea of what they are buying into. How can anyone know if they need a $1000 deductible or a $5000 deductible if they have no idea of what is covered, and how much it would cost?
This creates a moral hazard: on one hand, individuals are supposed to take responsibility and insure themselves against getting health problems. On the other hand, there is no way for an individual to know if they are being responsible or not, because they can't even tell if they are actually buying the coverage that they might reasonably need. Its not a surprise so many people go without insurance when they don't know what their monthly payment buys them.
Here's an example:
About 1 in 10 children are diagnosed with a heart murmur in infancy. So it's fairly common, usually benign. When a baby has a murmur, the primary care doctor will refer the child to a specialist (cardiologist), for a diagnostic test called a echocardiogram.
So if you have insurance that covers "well baby care"...routine pediatric visits and tests for your child, you would think that it would be covered, right? Wrong.
Well what if diagnostic tests are covered by the plan? Nope, an "echo" is not considered a routine diagnostic.
Ok, well how much does it cost? About $3500!
How can the average insurance buyer be expected to know that there is a 10% chance that they will need a $3000 procedure? What other high-probability, non-life-threatening liabilities is a family exposed to? Isn't the point of insurance to mitigate those financial risks?
I'd like to see more of this information aggregated somewhere on the web...cost of procedures, likelyhood of occurrence, financial risk if a problem occurs. Maybe even an insurance site that allows a person to choose a plan how much risk they are willing to take on, or how much risk they can afford.
Otherwise, people are just speculating about what coverage they need.
Same thing with auto insurance...how likely is it that you will get into accident where you will do more than $50,000k damage? How can you pick coverage without knowing this?
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$3500 for an EKG ?? That must be the "list price", which is at least 3X the "real" price.
But seriously, even $1000 for an EKG is a rip off. IMO it ought cost no more than $200 including the doctor visit and the interpretation of the graph, Reading the graph should take all of 5 minutes. EKG isn't exactly rocket science.
Corrected: I was thinking about an ECG, the electrical version. An EKG is the ultrasound version, a bit more labor intensive., I could see that taking 30 minutes and costing $400, but why any more than that?
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46 male
Menlo Park, CA
Premium
justme says
Right! Medical billing in America is ridiculous. The list prices are set absurdly high so they can claim they gave you a discount down to $1000 when they still just ripped you off by 300% or so.
I lived in Holland for a summer and my son had to go get some stitches out and see how his cut was healing. We weren't covered over there so had to pay out of pocket. It was $15! In America it would have been $50 at least for the same trivial procedure, probably $100.
rob rankles says
Exactly. Insurers get away with this kind of hiding in the fine print because their lobbyists in DC actually write the laws. I don't mean they influence the laws. I mean they write them, literally, word for word, and had them to Congressmen with a bags of campaign cash in exchange for signatures.
The Congressmen then use that cash to rile up insecure and bitter people about God, gays, and guns, which is the easiest way to get re-elected.
And so the insurance company profits are preserved, at the expense of the public.
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Redwood City, CA
The people who write the laws are of course the ones who are most closely linked to the business, because they're called upon to make good judgement calls.
Can you imaging what the internet today would look like if they said "hey! you've used a computer, you can't write any law that involves a computer now! Only people with zero computer experience are allowed to write this bill up!" Get the Amish over here! They need to draw it up!
While it's going to be a semi self serving law, many are probably written in such ways that they're designed to allow leeway, it's just that over time people figure out how to really game the system.
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Mill Valley, CA
Patrick says
Patrick,
I'm not going to defend the health insurance industry...but, their % of profits as net income is under 5% industry-wide. Surely they are not blameless...but, neither should they be the sole focus of anger in the way health care in the US is parceled out.
It's also very easy to rile folks up about insurers to pony up re-election votes...as the insurers are the one parting out rejections to folks in need. But, the story of the mismanagement of health care in the US goes a lot deeper than that.
Major drug manufacturers have ~22% profit margins. While much of the impressive margins can be attributed to those firms’ intellectual property rights and ability that dominate the markets for the new drugs they create (those margins, in turn, allowing for reinvestment into research that will develop the new drugs of tomorrow), some can also be attributed to the lack of free trade in America when it comes to prescription drugs.
It's a mess - no doubt - but, not one wholly attributable to health insurers. An out-of-control system for assessing medical liabilities, ultra cozy relationships between Big Pharma and the FDA and the responsibility of a wellness or preventive care advocacy by each US citizen must be examined, as well, before we move ahead as a nation on a better health plan.
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jsmarket, I have not checked the numbers but a 5% net profit margin on a very big and always increasing stream of policy premiums is very fat indeed.
And what are the overhead numbers, which include what the insurance company pays itself? I forget the exact number but it is another 15% or so I think.
For comparison, the IRS uses 0.55% of collected taxes to fund itself. Not bad, huh? Government is quite good (fixed typo) sometimes.
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The saga of applying for individual health insurance continues:
I got declined two places because of some stuff that has already been fixed the last 5 years or is well under control (think along the lines of elevated blood pressure that is no longer elevated when taking medication).
I have a feeling that these were auto-declines or robo-declines by a computer with little human input or understanding that these historical issues are fixed.
This brings up the real question: Does anyone have experience with the reassessments and appeals processes? On of them stated up front that they consider reassessments, and the other one did after a phone call. Should I bother?
I think I could get a letter from my doctor explaining this stuff. I had an appointment recently just to go over the issues but I think the insurance companies haven't even requested my records, they just robo-declined based on what I entered on the web.
Also: I can get HIPAA but the prices are in the stratosphere, $1214 for HMO and $604 for PPO with $4000 deductible and NO freebies at all in the PPO case except the yearly physical.
I also asked if anyone knew about any kind of catastrophic-only type insurance with a huge (think 20k or 40k) deductible but a low premium. Have not found anything like that yet.
Inputs are most welcome.
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Bellingham, WA
jsmarket says
Their overheads are just as significant as their "profits". Wellpoint is skimming $60B/yr in revenue.
$9B goes to overhead (15%)
$5B in profit (8%)
So that's 1 in 4 dollars not going to care. In my case, that's $50/mo being skimmed from me.
They're working me over more than OPEC!
What's WLP's value-add? Why can't we eventually replace them with a single-payer like Canada?
jsmarket says
GSK
$30B in revenue
$7B in COGS (23%)
$14B in SG&A (46%)
$4B in R&D (13%)
$4B in profit (13%)
While I don't want to defend Big Pharma, drugs aren't that big a piece of the pie so addressing their abuses isn't going to solve anything.
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Saint George, UT
elliemae's website
justme says
Wow, that blows. I'm very sorry you're going thru this. On another thread someone said that, if you're in your 50's, you should have saved 25% of your annual income for many years and should be set for life. That doesn't take into account the massive bills that can be racked up in one medical event.
It also doesn't take into account that life is expensive. Hindsight is 20/20 - if you'd had the foresight you'd have somehow saved the money for the premiums for your cobra for the 18 months you're eligible to receive it.
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I applied for a reassessment. We'll see how that goes...
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Beverly Hills, CA
WillyWanker's website
Well, the American people voted and they were not happy with the way things were being run. The House will no longer be rubber~stamping 0bama's agenda. In fact, Congress could now starve 0bamaCare. And it's not as if the program is worth keeping alive. It will do nothing to keep costs down.
Republicans have to be careful and not commit the same mistakes Democrats fell into: namely, doing whatever they want irregardless of what the people want.
The people giveth and the people taketh away.
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I work for a major dot com and it seems like the company picked up most of the cost increase this year because of the new health care law. Our plans went up around 5%, pretty crazy times we live in when a 5% increase is a good thing.
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Saint George, UT
elliemae's website
http://www.lasvegassun.com/news/2010/nov/06/benefits-change-causing-uproar/
Costs are going up for UNLV personnel, and they're not happy. A $20k surgery that cost the patient $3,500 out of pocket will rise to $12,000. Premiums that are currently $44/mo (individual) to $195/mo (family) are "likely to rise sharply next year."
It's difficult to feel sorry for someone who works at a university that has subsidized health insurance costs so much - these monthly premiums are pretty low. Their rates should rise - why should taxpayers cover the cost of their insurance so much when in the private sector the rates would have been at least 50% (or more) higher?
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justme says
I moved to CA in 2004. I was rejected for individual policies at two companies (Kaiser and Blue Shield) as I have a chronic condition. Fortunately, I was in a previous group policy and therefore was eligible for a HIPAA policy (there are real restrictions on this regarding time and expending Cobra so be careful you don’t loose the choice). I went with Kaiser's HIPAA it was expensive (though cheaper then Blue Shield) and seems to go up about 10% every year (I think there is a cap on the increase in CA). I am now over 55 and this year the premium was 712 a month. The coverage is pretty good and I can afford it so I am OK but that is still a lot of money. At Kaiser they offer only two policies for HIPAA mine is a 1500 deductible.
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Thanks, rdm. I did put in applications for the HIPAA plans just in case, so we shall see what happens. The prices are crazy, though.
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Update:
I joined an HMO 1500/30 HIPAA plan for about $520/month. That means $1500/year deductible applies to most extras except $30 office visits and preventive care visits.
That was the lowest price HIPAA plan available from any California vendor, as far as I could tell. I'm still doing an appeal for reassessment. I think the same plan would then be about $300. We'll see how that goes.