How to Negotiate Your Medical Debt

Let’s face it: The worst thing about having to go to the hospital to receive medical treatment is being slammed with a huge bill afterwards. Sometimes, these medical bills are so expensive that you simply don’t have the means to pull it off right away, especially without health insurance. While we may find it easier […]

How to Negotiate Your Medical Debt is a post from Pocket Your Dollars.

How to Decide If Pet Insurance Is Worth the Cost

Woman deciding if pet insurance is worth the cost

Last fall, our greyhound Tivo refused his breakfast on a Friday morning. He didn't eat or drink water all day, and we were worried. That night, we took him to the 24-hour emergency veterinarian and Tivo was diagnosed with a bacterial stomach bug and dehydration. We went home with antibiotics, a saline IV, and a $200 vet bill.

Thankfully, we could afford this bill for unexpected emergency care for Tivo. But if he were diagnosed with a chronic condition or needed a very costly intervention, we might find ourselves facing some heartbreaking financial decisions.

Pet insurance is often touted as a solution to these worries. With pet insurance covering some costs of veterinary care, you're never forced to choose between your beloved pet and your finances. However, does this kind of coverage make sense for most pet-owners?

Here's what you need to know about pet insurance so you can keep your fur babies bright-eyed and bushy-tailed for years to come.

Premium costs

As with human health insurance, pet insurance charges you a monthly premium for your pet's coverage. According to Value Penguin, the average monthly cost for canine pet insurance is $47.20, and the average for feline insurance is $29.54 for accident and illness coverage.

Of course, this doesn't tell the whole story of what to expect from premium costs. Many pet insurers increase premiums with the age of your pet. Which means the $47 per month you pay to keep your 4-year-old pup healthy could rise with his/her age, making the premiums harder to keep up with just as they're more likely to need age-related medical intervention. In addition, different breeds can have different premium prices, since there are some hereditary conditions that various breeds may be more prone to.

However, even with these potential issues, there are some methods to keep premiums manageable. For instance, some tried and true insurance reduction strategies work just as well for your pet's health insurance as they do for your own. These include increasing your deductible, reducing the percentage that the insurance reimburses, or limiting the annual payout rather than choosing unlimited coverage.

These strategies can keep your premiums affordable while still helping with big veterinary bills. But you need to be prepared to pay anything above and beyond the coverage limits you set up. (See also: 8 Ways to Lower Your Vet Bills) 

Coverage

It's also important to note that pet insurance does not necessarily cover every kind of health cost for your pets. To start, unlike (some) human health insurance, most pet insurance will not cover preventive care and annual exams. So you will need to plan for these costs on top of your premiums.

Pet insurance policies generally come in two varieties: accident and illness policies, and accident-only policies. In general, accident-only policies do not raise their premiums as your pet ages, making this kind of insurance more affordable long-term. However, accident-only policies tend to be cheaper because your pet is less likely to get injured than fall ill. If you decide to invest in pet insurance, getting both accident and illness protection will likely offer you more protection.

That said, each insurer gets to decide which illnesses, conditions, and services it covers, and not all ailments are covered. Many insurers also do not cover the diagnostic exam for a particular illness, even if the treatments are covered. Make sure you pay attention to the details of what your potential insurer will cover before signing up for coverage.

As with many types of human health insurance, most pet insurance policies exclude preexisting conditions. Unfortunately, some insurers consider health problems to be "preexisting" if they crop up within a year of the purchase of your policy. Insuring your pet when they're young is the best way to avert the preexisting condition coverage gap.

Finally, pet insurance coverage is usually handled via reimbursement. That means you'll be on the hook to pay the vet bill at the time of service, and you'll submit your receipts to your insurer to receive reimbursement. (See also: 7 Things You Need to Know About Pet Insurance)

Should you buy pet insurance?

With all the caveats, coverage gaps, and reimbursement requirements, pet insurance is not necessarily a slam dunk for everyone. In fact, many consumer advocates recommend that pet owners put aside an amount equal to the annual premium into a savings account each year. This will give you the same peace of mind that you can cover any potential health care needs for your pet while also allowing you to keep the money if you never need to use it.

However, if you struggle with financial discipline, this strategy will leave you in a difficult situation if your furry friend needs an expensive procedure. Pet insurance can provide you with the protection your pet needs even if you struggle with money. 

Show your love with an emergency fund

Whether or not you decide to purchase pet insurance, remember that you'll have to pay upfront for any veterinary procedures. With insurance, you will get reimbursed for covered care, but you will still need to have access to funds to pay for Mittens' kidney stone removal or Rex's arthritis care at the time of care.

This means that one of the best ways you can protect your furry friends and avoid heartbreaking financial choices is to have an emergency fund. With or without pet insurance, set some money aside for the unexpected so you can enjoy your four-legged family members for years to come. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

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With pet insurance covering some costs of veterinary care, you're never forced to choose between your beloved pet and your finances. Here's what you need to know about pet insurance. | #pets #petcare #insurance




How Much Life Insurance Do I Really Need?

Since it doesn’t have an immediate benefit – like health or auto insurance – life insurance may be the most underestimated insurance type there is. But if you die, life insurance will likely be the single most important policy type you’ve ever purchased. And that’s why you have to get it right. Not only do […]

The post How Much Life Insurance Do I Really Need? appeared first on Good Financial Cents®.

Guide to Managing Medical Benefits When You Leave or Start a Job

Leaving a job typically means saying goodbye to workplace benefits such as health insurance and medical spending accounts. No matter if you quit, get fired, or get furloughed, it's essential to know your options so you can make the most of those perks.

If you're starting a new job with benefits or becoming self-employed, you'll have critical decisions to make about what's best for you and your family. I recently received a couple of questions about how to handle benefits during work transitions, and I'll answer them throughout this post. We'll review the best options for managing medical benefits when you leave or start a new job.

What happens to health insurance when you leave a job?

When it's time to leave a job with benefits, it's essential to let your employer know so you can evaluate your options for managing or replacing them right away. The sooner you understand your choices, the more time you'll have to do your homework and consider what's best. 

Any insurance perks you have typically end on the last day of the month you get terminated. So, be strategic about choosing your last day, when possible.

If you leave an employer on good terms or get a severance package, ask for an extra month or two of medical coverage if you need it.

For instance, if you work through November 30, your health insurance may end on that day. But if you work through December 1, your insurance may last until December 31. Also, remember that most things in business are negotiable. If you leave an employer on good terms or get a severance package, ask for an extra month or two of medical coverage if you need it.

Here are four work transitions you may need to manage:

1. You leave a job for a new employer with benefits

Congrats! Benefits at your new job may start on your first day, or you may be subject to a waiting period, such as 30 or 90 days. Don't roll the dice with a gap in critical coverages such as health and life insurance. Something unexpected—a car accident, illness, or death—could be financially devastating for you or your surviving family.

If you have a spouse or partner who also has workplace insurance benefits, you may be wondering which plan to choose or whether you can double up on benefits. Keep reading for tips to handle this situation wisely. 

2. You leave a job for a new employer with no benefits

If your new job is with a small company, it may not offer expensive perks such as health insurance. But that doesn't mean you can't get affordable coverage on your own, which we'll cover in a moment.

3. You leave a job and become unemployed

No matter if your workplace doesn't offer benefits or you're unemployed, there are ways to get low- or no-cost health insurance.

4. You leave a job and become self-employed

When you work for yourself, you need to provide your own medical benefits package, and the same advice will apply, so keep reading.

What is COBRA continuation coverage?

A critical right you should be familiar with is COBRA continuation coverage. COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a law that requires an insurer to continue your employer-sponsored medical insurance, including health, dental, and vision policies after you're no longer employed.

Anytime you leave a job with group health benefits, you can purchase COBRA coverage for a period. Your benefits administrator should give you information about your right to apply for COBRA coverage and the cost.

Anytime you leave a job with group health benefits, you can purchase COBRA coverage for a period.

You can purchase the same or fewer medical benefits than you had before you quit, got laid-off, or fired from your job. But the price won't be the same—COBRA coverage can be expensive because your previous employer does not subsidize it.

You must pay the full COBRA premiums, plus a 2% administrative charge, to the insurer. While it will cost more than you're used to, the upside is that your coverage will be seamless, and you'll be familiar with it.

COBRA protects everyone affected by the loss of group health insurance, including the former employee, his or her spouse, former spouses, and dependent children—when certain qualifying events occur, such as termination or reduction of work hours. It typically lasts for up to 18 months. However, if you're a surviving spouse or divorced from a covered employee, COBRA may continue for up to 36 months.

Don't make the mistake of thinking that you'll just wait and get health insurance when you get a new job or when you become eligible after a new employer's waiting period. If you get sick or need a trip to the emergency room, you could end up with a massive bill.

If you're not eligible for regular, federal COBRA, many states offer similar programs called Mini COBRA. To learn more, check with your state's department of insurance.

How do you get individual health insurance?

If you don't have the option to get COBRA medical benefits or can't afford it, your next best option is to shop for ACA-qualified health insurance. ACA stands for the Affordable Care Act, which set standards, known as essential health benefits, and provides subsidies that make qualified plans more affordable.

If you qualify for an ACA subsidy based on your income and family size, it can make a health plan much less expensive than COBRA continuation.

If you qualify for an ACA subsidy based on your income and family size, it can make a health plan much less expensive than COBRA continuation. But if you have high income and don't qualify for reduced premiums, COBRA may cost about the same or even give you better benefits.

So, shop and compare the cost of COBRA to a private policy when possible. Open enrollment for ACA-qualified health plans is limited to the last few weeks of the year. However, losing your group coverage at work is one of several life events that qualify you for a special enrollment period or SEP to get coverage. But you only have 60 days to sign up for an ACA plan after losing your insurance at work, so don't put it off.

If you miss the special enrollment deadline, you generally won't be able to get a marketplace plan unless you have another qualifying life event. These include getting married, having a child, or exhausting your maximum period of COBRA coverage.

You can get quotes for an ACA-qualified health plan from the following:

  • Healthcare.gov (the federal healthcare marketplace)
  • Your state's online healthcare marketplace (if you live in California, Colorado, Connecticut, District of Columbia, Idaho, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont, or Washington)
  • Insurance aggregator sites, such as Bankrate.com and eHealth.com
  • Insurance brokers

Depending on your income, family size, and the state where you live, you may qualify for free or low-cost coverage from Medicaid or the Children's Health Insurance Program (CHIP). Also, note that if you're younger than 26, you can enroll in a parent's health plan even if you don't live at home or are married.

Can you have more than one health insurance plan?

Jamie left a voicemail and asks:

I'm starting a new job soon and am wondering if I should enroll in the dental and vision benefits because I already have them under my husband's insurance. How should I compare insurance policies if I need to choose between different plans?

It's not against the law to have more than one medical insurance policy, but it may be a waste of money. Having more than one medical plan doesn't mean that you get reimbursed twice for covered benefits.

Having more than one medical plan doesn't mean that you get reimbursed twice for covered benefits.

The plan you get through your employer becomes primary, and the one through a spouse or partner's employer is secondary. After the primary policy covers you, the secondary would pick up any remaining covered cost. But the combined coverage can't exceed 100% of the cost.

When you have dual health or dental plans, you must pay deductibles for both of them. In other words, you may still have out-of-pocket costs even when you have more than one plan.

Whether you could save money by enrolling in more than one medical insurance plan depends on several factors, such as the monthly premium, annual deductible, and how high your healthcare expenses could be in the future.

You'll need to make these same comparisons when you're choosing between different plans. Evaluate monthly premiums, annual deductibles, co-payments, co-insurance, and the doctor networks to estimate which one is best for your situation. 

To get some help, speak to an insurance representative from each plan you're considering. Ask them about the types of healthcare services you and your family typically need or have needed in the past. You can't predict how healthy you'll be going forward. But to evaluate different plans, or know if having more than one plan is worthwhile, you must consider your previous expenses for health, dental, and vision care. So gathering that information should be part of your research.

What happens to an HSA when you leave a job?

Adam asks, "My employer makes contributions to my HSA every payday. Do I have to repay them if I leave my job to start my own business?"

Another insurance-related benefit that you may have at work is a tax-advantaged health savings account or HSA. You're eligible for an HSA when you're enrolled in a high-deductible health plan (HDHP). Having an HDHP may be a good option when you want lower premiums, are in relatively good health, and are likely to take advantage of an HSA.

An HSA is portable, so you can take it with you if you leave an employer.

The good news is that an HSA is portable, so you can take it with you if you leave an employer. Your account balance, including amounts contributed by your old employer, are yours to spend tax-free on eligible medical expenses with no spending deadline.

You can spend an HSA on qualified expenses for you or your family members, even if you don't have a high-deductible plan or you're uninsured. However, you can't make any new HSA contributions when you're not covered by HDHP. 

If you become unemployed, you can use an HSA for COBRA premiums, or for other health insurance while you're receiving unemployment compensation. But if you spend HSA money on non-qualified medical expenses, the amounts will be taxed as income, plus you must pay an additional 20% penalty.

What happens to an FSA when you leave a job?

Another medical spending account you may need to manage when you leave a job is an FSA or flexible spending arrangement. These accounts can only be offered by employers and get funded by pre-tax payroll deductions that you can use for childcare and medical expenses.

Make sure you empty the account by spending the funds on qualified purchases before your last day of work or by the end of the month.

FSAs have a use-it-or-lose-it policy, which means the amounts you've contributed will be forfeited if you don't spend them before leaving a job. Make sure you empty the account by spending the funds on qualified purchases before your last day of work or by the end of the month.

Whether leaving a job is cause for tears or celebration, you can make smart decisions about your medical benefits and save money with some strategic planning. Be sure to ask your benefits administrator or your plan providers for help when you need it.

How Much Does Long-Term Care Insurance Cost?

A 55-year-old can expect to pay a long-term care insurance premium of $2,050 per year on average, according to a 2019 price index survey of leading insurers conducted by the American Association for Long-Term Care Insurance (AALTC). That will cover … Continue reading →

The post How Much Does Long-Term Care Insurance Cost? appeared first on SmartAsset Blog.

What Health Insurance Doesn’t Cover: Your Guide

Insurance of any kind can be confusing, but when it comes to medical insurance, it’s really tricky to tell what’s covered and what isn’t. Whether you’re shopping around for a new plan or recently just got on a new health insurance plan, it’s good to know the ins and outs of your health insurance coverage […]

What Health Insurance Doesn’t Cover: Your Guide is a post from Pocket Your Dollars.