money really matters

We have already seen Tests 1 to 5 in the previous posts to check and select the insurance company. In this blog post, we will end the series with the last tests which also plays key factors in the selection criteria.

Test 6: Renewal Rate Change

Many insurance companies offer an attractive discount rate for the first premium period to get you on their books. Once you are in, many companies will try to ripe you off by increasing the premium every other renewal. There might be other factors involved in the increase of insurance but most of the time they increase without giving any reasons.

After spending lot of time researching to buy insurance, nobody wants to change just after 6months or year and do go through the same cumbersome process. So, many of us try to stick with the same company even with increase because of this reason and insurance companies take it has an advantage for them.

You can check the renewal rate change rating in the above mentioned state websites which gives another clue about the insurance company. Try to score your insurance company according to their rate change ratings.

Test 7: Recommendations from your friends, local body shops

“Word of mouth” is a powerful marketing tool. It works well in almost all cases. Check with your friends and relatives or others that you can trust. See which companies they would recommend. Ask about their experience and get their perspective. You can even contact the local body shops or auto repair shops you always use and get their view point. They usually recommend insurance companies which encourages using OEM (manufacture parts) instead of aftermarket part. That’s another important factor to consider as you want your vehicle to be fixed with original parts instead of aftermarket parts.  Score the companies with the feedback from your friends and trust worthy person.

Finally, tally up the score for all the insurance companies in the list from each test criteria and you should have your own ranking for each of them. That surely would have narrowed down your list one or two companies which you can use.  Once you decide on which company you want to go, just go to their website to finalize your quote.

Conclusion

As it was bluntly mentioned at usnews.com, Car insurance is like betting against the odd. You pay a monthly fee to an insurance company.  They're hoping that you won't get into an accident. You're hoping that you won't, but betting that you will. If you "win," the insurance company will pay your accident costs. If you're not in an accident, the insurance company wins because they get to keep your money. Losing this bet isn't bad, though. You won't have to deal with being in an accident, and the longer you lose the bet by not getting into a wreck, the less you'll have to pay the insurance company. But, the day you're in an accident, you'll be glad you're covered by good insurance company.

Photo source: i-ehow.com
Sources: edmunds.com

ehealthInsurance.com, a health insurance portal which allows consumer to compare, apply and buy affordable health insurance in this high health cost days. I been using service for almost 3 years and all our health insurance are actually bought through their service.

I recently got in touch with the VP of the ehealthinsurance and had a nice chat about the company and especially about the Cobra subsidy provided by the government.

Read on the Interview with Sam Gibbs, eHealthInsurance

Vijai: Can you tell me about you role at eHealth?

Sam: I’m a Senior Vice President at eHealthInsurance.  I’ve been with the company since 2000. I’ve been involved in many parts of the business, from building our technology to working with consumers and small businesses.

Vijai: How does eHealthInsurance help people with their insurance needs?

Sam: Simply put, we show Americans their health insurance options and empower them to find the best health insurance products for their personal needs and budget.  Shoppers visit the eHealthInsurance.com website and with just a few clicks compare real-time health insurance quotes from a big selection of brand-name health insurance plans in their area.  They can read customer reviews, compare plans side by side, sort by their favorite doctors and get personal recommendations.  Then they can actually apply for coverage and buy online.  

We also have a Customer Care Center staffed with licensed agents as well as representatives who can provide help and unbiased advice by phone, email or online chat. 

eHealthInsurance sells individual and family policies, short-term coverage and small business group coverage, as well as dental and vision coverage and a number of other products.  We’re licensed to sell health insurance in all fifty states plus DC and we offer plans from over 180 health insurance companies nationwide.

Vijai: With more than a half million jobless people, what is the general situation when it comes to their insurance needs? Do you have stats showing how many people are actually using COBRA and individual insurance?

Sam: Actually, I think you’ll find there are a lot more than half a million unemployed people out there.  The October data from the Bureau of Labor Statistics put the overall unemployment rate at 10.2 percent, which works out to 15.7 million people.

Generally speaking, people out of work have three choices: 1) They can temporarily continue their employer coverage under COBRA with the help of the nine-month federal subsidy designed to make COBRA more affordable; 2) They can apply for individual or family coverage in the private market; or 3) They can go without coverage entirely and leave themselves at serious financial risk in case of an emergency.

Hewitt and Associates recently released data suggesting that there are about 14 million people currently eligible for COBRA coverage in the US.  Of those, the Hewitt study shows that about 38 percent are utilizing the 65% federal COBRA subsidy to help them make COBRA coverage more affordable.  That would put the number of Americans with COBRA coverage today at something over 5 million.

It’s difficult to say just how many of today’s unemployed are purchasing individual and family health insurance.  But according to a March 2009 US Census report, about 13 percent of the insured population in the US get coverage on their own rather than through an employer or organization.

Vijai: What can you tell us about your experience with the COBRA subsidy? Is it working and how confident are you for it being renewed again for a few more months?

Sam: The Hewitt study I mentioned indicates that thanks to the COBRA subsidy people are electing COBRA coverage at twice the rate they did before, so, yes, I think it’s working.  The point of the subsidy was to make COBRA coverage more affordable so that fewer people would be tempted to go without coverage.

When you go on COBRA coverage, you’re actually keeping your former employer’s health insurance plan, but at your own expense.  Since employers generally cover the bulk of an employee’s monthly health insurance premium, many laid off workers are surprised to find out how much COBRA is going to cost them.  The value of COBRA, however, is that it allows you to retain the coverage you’re used to, and you can’t be turned down based on your medical history.  The trouble with COBRA is that without the subsidy, it is so expensive that few people are able to actually afford it.  The federal subsidy covers 65% of the monthly COBRA health insurance premium, so it stands to reason that it would prove popular and keep more people covered through their former employer’s plan. 

Families USA recently released some interesting data showing that the national average cost of COBRA coverage for a family without the subsidy is $1,111 per month, which works out to be over 80% of the average unemployment check!  With the subsidy, however, that monthly COBRA premium comes down to a national average $389 per month.

Congress is approved the possible extension of the COBRA subsidy through the end of February, so people who are laid off in January and February will qualify. It also adds six months of subsidies, extending coverage assistance for a total of 15 months.  It was first made available in March of this year and that means that the first recipients of the subsidy faced tripling of their COBRA premium when it was about to end on the month of December. 

Vijai: Is it possible that individual insurance works out better than COBRA with the subsidy? How and when?

Sam: It may for some people.  COBRA is the best option for those with pre-existing medical conditions, since COBRA guarantees them coverage, if they can afford it.  But people who are healthy may actually find more affordable coverage by purchasing insurance on their own, even compared to their subsidized COBRA premiums.  For example, I mentioned that the national average monthly premium for subsidized COBRA coverage was $389?  Well, in a report that eHealthInsurance issued in August, we found that the national average monthly premium for family policies purchased through our website was slightly lower than that, $383.  The costs are comparable.

Once the subsidy expires and their monthly premiums triple, healthy people currently covered under COBRA may be able to save hundreds of dollars per month by purchasing an individual or family health insurance plan instead. 

Then you may have a scenario where one family member has a pre-existing medical condition while several others are healthy.  It may make sense for families in this kind of situation to continue COBRA for the one person with the medical history while purchasing affordable individual policies for the other family members.

Vijai: What is the part played by eHealthInsurance and how they are getting compensated?

Sam: eHealthInsurance is a licensed agent like your local agent down the street, but we have a bigger selection of plans and we do business online.  Since health insurance premiums are regulated by each state’s Department of Insurance, there’s no difference in health insurance prices whether you buy direct from the insurance company or through an agent.  Commissions are built into all health insurance premiums.  If you buy from the carrier, the carrier gets the commission portion of the premium.  If you buy from eHealthInsurance or a local agent, eHealthInsurance or the local agent gets it.

Vijai: What is your suggestion for people who have no other option than COBRA?  With the COBRA subsidy expiring by the Feb, what would you suggest?

Sam: I would ask first, are you sure you don’t have any other options?  Talk with a licensed agent to find out.  But don’t go without coverage in any case.  If you have a pre-existing medical condition, try to find some way to make it work.  If you have dependents who are healthy, try splitting the family up under multiple coverage options, like I suggested earlier.  But try to stay on COBRA if you have a medical condition that might prevent you from finding coverage elsewhere.  It’s a greater risk to go without coverage, since a single uninsured hospitalization could put you in bankruptcy.

If you have a pre-existing condition and unsubsidized COBRA premiums are simply too costly and there’s no way you can afford it, I’d suggest you contact the non-profit Foundation for Health Coverage Education at www.coverageforall.org to see what government-sponsored programs and high-risk pools are available in your area.

Vijai: With the Health reform bill just crossing the half way mark by passing the house, do you think it will have a great effect in many American’s lives?

Sam: That remains to be seen.  The majority of Americans currently get their coverage through employers and these people may not be very effected.  Obviously, mandating that all people have health insurance is a big change.  And for people with pre-existing medical conditions, the idea that they can never again be turned down for coverage based on their health history would be a big change too.

Vijai: Final words, what do you like to tell people about shopping for their insurance needs?

Sam: Know your options.  When it comes to health insurance, knowledge is power – and it can be savings too.  Work with a licensed agent that represents multiple companies in your area to get an idea of what’s really out there so that you can find the best match for your needs and budget.  And don’t wait for health reform.  Many provision of the health reform bill won’t phase in until 2013.  So if you’re uninsured, check into your options today.  When and if health reform does become law, you may be obliged to purchase coverage anyway.  Protect yourself in the meantime.

You can visit a special website designed to guide people who are getting out Cobra at cobralearning.com

References:

Bureau of Labor Statistics October Report on Unemployment:

http://www.bls.gov/news.release/empsit.nr0.htm

Hewitt and Associates Study on COBRA Subsidy Utilization:

http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=7133

Families USA:

http://www.familiesusa.org/assets/pdfs/expiration-of-cobra-subsidy.pdf

Feb 2009 eHealthInsurance data:

http://news.ehealthinsurance.com/pr/ehi/health-insurance-premiums-ehealth-102617.aspx

March 2009 US Census Data:

http://www.census.gov/hhes/www/cpstables/032009/health/h05_000.htm