Health Savings Account (HSA) 2011 Contribution Limits

The IRS has announed the maximum annual HSA contributions for 2011 - and they are the same as in 2010:

• Individuals covered under an eligible high-deductible health plan (HDHP) may contribute up to $3,050 in 2011.
• Those with family HDHP coverage may contribute up to $6,150.
• People age 55 and older who are not entitled to Medicare can make additional catch-up contributions of $1,000 to their HSAs in 2011.

Health Savings Accounts (HSAs) are savings plans with tax advantages provided that account funds are used to pay qualified medical expenses such as prescriptions, doctor's office visits and hospital stays.  Generally, medical insurance premiums cannot be paid from HSA account funds; but there are some exceptions including health coverage while receiving unemployment benefits, COBRA continuation coverage, Qualified Long Term Care Insurance premium, and Medicare premiums and out-of-pocket expenses.

Unfortunately, starting in 2011 over-the-counter medicines such as aspirin are no longer considered qualified medical expenses.

You must first be insured under an HDHP in order to open an HSA.  Click here for more information on qualified high deductible health plans.

Medicare Advantage

Is a Medicare Advantage Plan Right for You?


When you become eligible for Medicare, you have a choice in how to receive your Medicare benefits. If you’re nearing age 65, you may have noticed your mailbox filling up with offers for Medicare Supplements, Medicare Part D drug plans, and Medicare Advantage plans. You may want to know more about the advantages of enrolling into the Medicare Advantage program, or even what the difference is between Medicare Advantage and original Medicare.

In a nutshell, Medicare Advantage is the Medicare Part C program under which Medicare beneficiaries agree to receive their benefits through private insurance company plans that contract with Medicare on a year-to-year basis. The Part C program was created by the Balanced Budget Act of 1997, when private health insurance companies convinced Congress they could provide the same coverage that Medicare offers at a reduced cost. Since then, the program has expanded, and currently about 25% of all Medicare enrollees have a Medicare Advantage plan.

Medicare Advantage plans vary widely in premium (some plans have zero plan premium in addition to the Medicare Part B monthly premium, or even refund all or a portion of the Part B premium) and in the specific benefits they offer. Some may only provide the benefits of original Medicare, but most plans include prescription drug coverage, dental and vision benefits; and some plans even provide free gym memberships! A plan that includes Part D prescription drug benefits is called MA-PD, short for Medicare Advantage Prescription Drug plan.

For Medicare beneficiaries who opt against Medicare Advantage and stay on original Medicare, it’s usually a good idea to enroll into a standalone Medicare Part D drug plan since original Medicare doesn’t cover most drugs. Part D plans come with a monthly premium, as do Medicare Supplement (Medigap) policies that are designed to fill the benefit gaps in Medicare.

While Medicare Advantage plans typically feature low co-pays for doctor office visits and procedures, they may include greater out-of-pocket costs for care such as hospital visits and major diagnostic testing. Therefore, as a general rule Medicare Advantage plans are most cost-saving to healthy individuals who have the good fortune to stay out of the hospital; but in any case the plans have a maximum out-of-pocket limit that serves to cap your total expense.

You can join a Medicare Advantage plan if you meet these conditions:

• You have Medicare Parts A & B

• You live in the service area of the plan

• You don't have End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

In most cases you can join a Medicare Advantage plan only at certain times during the years. See How Medicare Advantage Plans Work for more information.

For help deciding what’s best for you, download our Medicare Decision-Making Guide!



Although Medicare Advantage plans typically are financially beneficial to the enrollee, they are not necessarily good for the government. Medicare Advantage initially was created in order to reduce government spending, yet the federal government now pays on average 10-15% more for those enrolled in Medicare Advantage, as compared to those on traditional Medicare. Clearly this hugely popular program will be coming under pressure in the near future, as the federal government tries to rein in costs on Medicare and Social Security.

Do you have an opinion about the Medicare Advantage program? Please let us know!

Until next time,

Andrew

Grandfathered Health Care Plans

Grandfathered Versus Non-Grandfathered


Certain terms are being constantly thrown around, including “grandfathered” and “non-grandfathered” when discussing health care plans. What does each mean? What are the main differences between the two?

A “grandfathered” health care plan is one that has not had to change to fit all the requirements set by the Patient Protection and Affordable Care Act (PPACA), having existed in its current form since before March 23, 2010. Grandfathered plans must always have at least one person being covered at all times past March 23, 2010, although the person need not be the same constantly. On the other hand, “non-grandfathered” health care plans are those that have been created, bought, or changed since March 23, 2010. Non-grandfathered health care plans are subject to all of the new provisions of the PPACA.

Although grandfathered plans are guaranteed to be almost the same as they were before the PPACA was pushed through Congress, they must follow a few aspects of the PPACA. These requirements may vary slightly based on whether or not the grandfathered plan is for an individual or a group.

The following are parts of the PPACA that must be followed by grandfathered health care plans:

• There must be a lack of prohibition of coverage based on health discrimination starting for dependents under19 on September 23, 2010, and for everyone on January 1, 2014. (This is applicable to only grandfathered group health care plans.)

• There is a prohibition on excessive waiting periods.

• There can be no lifetime limits, and there may only be applicable annual limits on grandfathered individual plans.

• Rescissions are prohibited, except in the case of premeditated fraud, starting September 23, 2010.

• Those under the age of 26 must be available for coverage by their parents’ grandfathered plans unless their current employer offers health insurance coverage.

• Grandfathered health care plans must cover preventive care services without extra cost to the consumer.

Find out what can make a previously-grandfathered health care plan change into a non-grandfathered plan.

Check back soon to learn about coming changes to the Medicare program.

Preventive Care

Preventive Care Benefits: Perpetually Changing


Who can keep track of all the changes being made to your health plan’s preventive care benefits? If you follow benefits within the Medicare program, you likely know that in 2008 the Medicare Improvements for Patients and Providers Act (MIPPA) authorized a free preventive care exam to be provided within 12 months of signing up for Medicare Part B, rather than the previous six months. MIPPA also added new elements to this preventive exam- including body mass index- and waived the deductible for it, starting in January 2009.

Now, in 2010, we have the Patient Protection and Affordable Care Act (PPACA) changing Medicare’s preventive care services yet again. First, cost sharing is eliminated for some preventive care services, including colorectal cancer screening, as an example. Second, instead of only receiving a deductible-waived preventive exam upon first obtaining Medicare Part B, all Medicare recipients can get a comprehensive wellness assessment every year with no co-pays or deductibles. (From the Author -- although Medicare is now covering more costs for preventive care than ever before, we advise caution when ordering medical tests and services as they may be subjected to Medicare Part B deductible and co-insurance requirements.)

Furthermore, the PPACA greatly increases preventive care services that must be covered by “non-grandfathered” health insurance plans as of September 23, 2010. Not only will health insurance companies have to provide for preventive care, but they will have to cover all costs associated with it. Preventive care benefits that must be covered include, but are not limited to immunizations, mammography tests, and tests for obesity. Also, preventive care and oral health are being promoted in public school systems as part of the PPACA. Use at your own risk!

Look for a post coming soon explaining “grandfathered” vs. “non-grandfathered” health insurance plans! Since the rules imposed by PPACA impact these plan types differently, you’ll want to know which type of plan covers you, and how your plan will be impacted by PPACA.

Increasing Taxes are the New Fad

It No Longer Pays to Have Money

Who would ever think there would come a time when people don’t want to have a lot of money? Well, that time is coming soon. The new Patient Protection and Affordable Care Act (PPACA), passed earlier this year, notably increases access to health care coverage for many Americans. High-risk state insurance pools are being rolled-out; children under 19 – and even all adults come 2014 – cannot be denied health care coverage due to pre-existing conditions; and tax credits will be given to small businesses offering health insurance to their employees.


On top of that, the large post-World War II generation called the baby boomers is just entering retirement. This means that the largest generation of Americans in history is starting to collect social security and enroll into the Medicare program. Where is the money going to come from for all this?

If you guessed taxes, you’re right! Taxes are being raised, particularly for “rich” people. This does not mean that Bill Gates and his elite friends are going to give the government billions extra; rather, in a society where the average income of a four-person family is only $59,894, the “rich” are considered to be individuals with income over $200,000 or couples with joint income over $250,000. For these rich people, the Medicare payroll tax will increase by .9% beginning in 2013. Also, a new 3.8% tax is to be imposed on unearned income from interest, dividends, annuities, royalties and rents. And many states are increasing tax rates too.

The rates are rising for state income taxes.

Yet what does this mean for insurance costs? Medicare Part B premiums are steadily increasing, more so for those with higher incomes. There are levels through which premium payments are determined, dependent upon income. Only if the prior year individual income was less than $85,000 (or less than $170,000 if filing a joint return) will there be no income-related addition to the monthly Part B premium paid.

Under PPACA, businesses also will shoulder the burden of increasing health care costs. Small businesses received some benefit with potential tax credits, but larger businesses are coerced to provide coverage or pay a penalty. As of 2014, businesses of at least 50 full-time-equivalent employees will have to pay the government $2,000 per employee (excluding the first 30 employees) if it does not offer health insurance. If the business DOES offer health coverage, and employees decide to purchase insurance through an exchange and receive a subsidy, the business must pay the government $3,000 per employee. Many businesses may elect to pay these fines in lieu of offering group health plans, which generally are pricey and will only become more expensive as a consequence of all of the mandates in PPACA.

What advice could we possibly provide to you? It’s very simple, be more careful than ever with your expenditures. Since there’s not much any of us can do individually to hold the line on insurance premiums or taxes, budget wisely as the going is getting tough. And if you still want to have a lot of money in the future that’s OK, but be prepared to share.



Until next time,

AH Insurance Services

Government Internet Portal

The Government Internet Portal
The new Internet portal (created under the Patient Protection and Affordable Care Act) is up and running! What does it do? Go check it out for yourself at HealthCare.gov. You can find and compare health care options in your area to meet your needs. It shows what government and private programs will be right for you under the terms of the Patient Protection and Affordable Care Act.

It's always a wise idea to consult with a licensed health insurance agent before choosing your health care plan. Follow this link to find a health insurance expert: http://www.ahinsuranceservices.com/



Check back soon for more insurance information.

High-Risk Insurance Pools: What are they?

Want to Know What High-Risk Insurance Pools Are?
One of the many parts of the new Patient Protection and Affordable Care Act (PPACA) is the creation of high-risk insurance pools, starting on July 1, 2010. Well, you probably have a few questions on high-risk insurance pools. What are they? Do they benefit you? Will these insurance pools cause an increase in your tax rate?


High-risk insurance pools are pools of money allocated to help provide health insurance for people with pre-existing medical conditions. The majority of individuals in the United States of America are covered with group health insurance plans provided by employers, and many more are capable of buying individual health insurance plans from companies such as Aetna and Humana. Even low-income families can obtain health insurance from state programs. However, someone with a pre-existing condition like, for an example, diabetes can be denied health insurance from private companies.

According to the PPACA, nobody can be denied health insurance based on pre-existing conditions starting January 1, 2014. Yet what can one do for the three and a half years until then? This is where high-risk pools come into the picture. The federal government has allocated five billion dollars to provide health insurance for those with pre-existing conditions that are unable to get coverage from private companies until January 1, 2014. The dispersal of these funds is not uniform among all fifty states; it is based on estimates of how many people will use it in each state.



Distribution of funds among the fifty states



One can only apply to receive benefits from the high-risk insurance pool if one has been denied coverage and has not had health insurance for at least six months. Nonetheless, it is not a free governmental program; insurance premiums must be paid in order to obtain coverage. In general, the premiums will be on par with those of plans offered by private corporations within the state that provide similar coverage. The good thing about this for most people in the United States is that it ensures that the high-risk insurance pool is self-sustaining: the program will not be an extra burden on taxpayers.

Yet will five billion dollars be enough? Estimates of the number of individuals that will take advantage of the high-risk insurance pool range from 200,000 to 700,000 Americans. It is apparent that some states are worried about adequate funding throughout the duration of the program. Only 28 states (and the District of Columbia) have set up their own high-risk insurance pools by federal guidelines; the other 22 have rescinded their responsibility of administering their high-risk pools to the federal government. In the case of financial failure of the program in these states, the unpaid bills will be transferred back to the federal government rather than the individual state governments. These states may just be watching their backs, but perhaps they are not confident in the feasibility of the high-risk pools.



See if your state's high risk pool is state-run or federally-run.




Until next time!

First Year Changes Under Obama's Health Care Reform Bill

Welcome back to my Blog on 2010 Health Care Reform Legislation! After making my first post with a video from last fall of President Obama promoting his health care reform bill -- and promising to post another video -- I was informed that watching the President pitch his health care reform package isn't much of a draw! Therefore, I'll simply provide a summary of the first-year health care changes he mentioned in his March 6, 2010 address and mention to his loyal fans that the video can be found at the White House Blog.

Quoting the President on first-year health care changes:

• "Small business owners will receive tax credits to purchase health insurance."
• "Thousands of uninsured Americans with pre-existing conditions will finally be able to purchase coverage."
• "Insurance companies will no longer be allowed to deny coverage to children with pre-existing conditions."
• "They will no longer be allowed to drop your coverage when you get sick."
• "This year, all new insurance plans will be required to offer free preventive care to their customers."
• "There will no longer be lifetime limits or restrictive annual limits on the amount of care you receive."
• "Young adults will be able to stay on their parents' insurance policy until they're 26 years old."
• "There will be a new, independent appeals process for anyone who feels they were unfairly denied a claim by their insurance company."
• "Finally, seniors who fall into the gap in coverage known as the donut hole will receive $250 to help them pay for their prescriptions."

To learn more about how 2010 health care reform legislation impacts you, please visit:

http://www.ahinsuranceservices.com/healthcarereform.html

In my next post, I'll review the impact of health care reform on the Medicare program. Stay tuned!

Until next time,

Andrew Herman

How Will 2010 Health Care Reform Legislation Impact You?

Welcome to my Blog on 2010 Health Care Reform Legislation that became law in March of this year!

Like it or not, health care reform is here to stay. My blog will pay special attention to the impact of the health care reform bill on Medicare, since that program is near and dear to so many here in the Sunshine State.

One of the features I plan to offer regularly is "What's New This Week." In these posts I'll share something noteworthy for the upcoming week or provide an update on an important topic discussed in a prior post

So, What's New This Week? On June 10, a $250 rebate check might be coming in the mail! That's if you have a Medicare Part D drug plan and you've already entered the dreaded coverage gap, or donut hole, this year.

According to Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS), Medicare beneficiaries need not take any action to receive their rebate since its issuance is based on Medicare billing data.

The $250 rebate checks to be mailed throughout the remainder of 2010 mark the first milestone of a 10-year timeline over which the Medicare Part D coverage gap will be eliminated. Next year, a 50% discount will apply to brand name drugs for those who are in the coverage gap.

To learn more about the Medicare Part D program, including how the coverage gap works, please visit our Medicare Prescription Drug Coverage page.

For the record, I'm posting a video of President Obama speaking about the health care bill back in September:

In this address, the President mentioned a number of key elements of his package including:

• No more denial of coverage for pre-existing conditions
• No dropped coverage when you get sick
• Elimination of yearly and lifetime caps on coverage
• Cap on out-of-pocket expenses
• Required coverage for preventive care
• New Insurance Marketplace (Exchange)

Most of the proposed elements of President Obama's plan became law with the passage of the Patient Protection and Affordable Care Act (PPACA), revised by the Health Care and Education Reconciliation Act of 2010 and signed into law on March 30, 2010; however many of the important plan provisions don't go into effect until 2014 or later.

Look for another post this week, this one featuring a more recent video of the President speaking about health care reform changes that are effective in the first year following passage of this historic bill.

Until next time,


Andrew Herman