Finance Tips

There are many sides of having your health insured and it’s certainly a good thing because it allows to tailor a plan to your exact needs and make it as adequate as possible. But as with all things there are also negative aspects of this diversity that can lead you to misunderstanding and unnecessary spending if you aren’t aware of them. And these days additional spending could seriously harm an average family budget. If you’re trying to optimize your costs knowing about some common insurance traps is necessary in order to keep your costs as low as possible. So if you don’t want to become a victim of misunderstandings that will cost you money keep in mind the following health coverage traps when getting medical care:

Avoid going out of network

The vast majority of insurance plans you’ll find on the market are managed care plans. Whether group or individual these plans offer good premiums in exchange for certain limitations. One of such limitations is the place you can get medical care from. Each insurance provider has a network of medical facilities and specialists you can get your services from and have your bills covered. But once you choose to visit a doctor who doesn’t make a part of the network you will end up paying the entire bill out of own pocket, which is certainly not very convenient assuming the current medical prices. So the first advice would be sticking only to in-network specialists and facilities if you want all your services to be covered properly. Otherwise it really doesn’t make any sense having health insurance since you will end up paying for the larger portion of your medical bills.

Keep an eye for co-payments and deductibles

Co-payments, co-insurance and deductibles refer to virtually the same aspect of any health insurance plan. These are the payments that the customer has to make out of own pocket for getting the service he needs before the coverage starts to apply. These can be doctor visit fees or any other additional costs that you will typically find in a medical facility. Now, you have to be very careful with these payments since they can make up a good sum of money by the end of the year comparable to your premium. Usually they are higher in plans with lower premiums, however it’s not a necessary condition. So it’s highly recommended to check the co-payments and deductibles when assessing a health plan besides the usual premium comparison, since it adds up to the final cost of the policy in the long run.

Don’t get the first plan offered

One of the most common mistakes an inexperienced customer makes is that he or she buys the very first health insurance plan offered. The probability that this plan will be both affordable and adequate to your needs is very low, so don’t risk this way since it’s your money you are going to spend. Instead, take your time to consider all your options, shop around online, determine which plan type best appeals to your needs, compare quotes from different providers and only after doing some research buy the plan that appeals to you the most. You can save really good this way so don’t rush with your decisions if you have some time to compare different offers.

There used to be only two certainties in life, at least according to Benjamin Franklin, namely death and taxes. Margaret Mitchell then added a third in Gone With the Wind, i.e. childbirth. Following birth, those adorable little bundles of joy start to grow and, before you can say, “Jack Robinson”, they’re teenagers and the fourth certainty hits you straight between the eyes. Every teen expects to drive. No matter how much you try to deny this reality, it’s unavoidable and the results will threaten your family budget. With the recession showing no sign of going away anytime soon, everyone is living with the threat of unemployment. If the pay checks stop coming in, keeping up the mortgage or rent is going to be a challenge. So, when you have any spare cash, you’re paying down your debts. The more flexibility you have on the credit cards or with the bank, the better. Except, there’s this inescapable fact. If you get quotes for adding your teen to your own insurance policy, your rates are going to take off like a rocket with escape velocity to reach the moon.

If you’re really lucky with where you live and have a perfect safety record, the rate might only go up by 50%. That means you live in the middle of a flat prairie with straight roads and only a few trees and fences to aim for. With little traffic on the roads, the chances of an accident are small. Nevertheless, teen drivers rapidly develop a flair for exploring off the side of roads or entering unofficial demolition derbies. Now think about those parents who live in cities and their ZIP code is not the best in the world. With such an address, you can find your premium rates going up by as much as 200%. Yes, this is unfair but it also reflects the hard reality that traffic accidents are the biggest cause of death among teens. No disease can match the lethal quality of collisions. Hundreds of thousands of our young are killed or injured every year and the insurance premiums reflect this. So what can you do to reduce the cost?

The best place to start is with a safety course approved by your current insurer. Except, this is going to be a battle. Teens tend to believe they have superpowers and cannot be injured in an accident. They will be hostile to the idea of a course when it has some twenty to thirty hours in a classroom plus time with an instructor. The longer the one-to-one time with an instruction, the higher the course fee. The most expensive are around $500. But, if your teen is certified as doing well on the course, you can expect a reasonable discount on the premium rate. So, let’s say your current premium is $1,500 a year and it will increase by 50% to $2,250 but you earn a discount of 15%, i.e. $337.50. Any course fee less than that pays for itself within the first year. This may not be cheap auto insurance, but it will hopefully help your teen drive more safely. When you get the auto insurance quotes, check out which courses are approved and what discounts are available.

Have you ever wished to make a start on setting up a home budget but were not sure how to start? Couldn’t work out how to do the calculations and were not sure whether the answer would be correct? No more reason to stall. Use a pre-formatted spreadsheet that you only have to enter your financial income and expenses into. There are many of these available on the Internet. Ready to look at the benefits? Let’s go.

Benefit #1. A spreadsheet clearly shows your thinking and the calculations used to arrive at the answer. What’s more, it allows you to add extra items quickly and see their impact on your financial position, or your free spending amount.

Benefit #2. A spreadsheet can be quickly and easily copied and the data changed to suit a friend or another member of the family. Maybe a teen’s budget or a hobby budget could be started using the same initial template. You could also easily copy one month’s budget and reproduce it 11 more times to last for a whole year.

Benefit #3. A spreadsheet can be printed and taken with you for further study, or passed on to members of the family for their input.

Benefit #4. A spreadsheet allows for “What If” questions to be asked of it. For instance, what if you were to reduce the spending on clothes and add some extra funds to credit card payments and/or holiday savings? The answer to this question could be instantly calculated by just changing 2 or 3 numbers.

Benefit #5. A spreadsheet can teach you a new, very marketable skill. You may find you pick up this skill really quickly and want to add more elements to the budget like graphs, personalized formatting and more calculations. A spreadsheet is really only a calculator, but with a lot more flexibility. Setting up a budget for yourself, is a good place to start, since this is an easy project. You could progress on to building a Savings Growth Calculator, a Retirement Goal Calculator or a hobby expense and income sheet, and the list goes on. Spreadsheets are used everywhere in the finance, marketing, teaching, manufacturing and sales functions in many businesses worldwide.

Benefit #6. A spreadsheet can improve your accuracy. If you have set up the spreadsheet correctly, you can be sure that the answers provided are correct, time after time. It’s easy to see the formulae used and to check their correctness. Others can check these for you also, if you need some help in this area.

Benefit #7. A spreadsheet allows for easy changes to be made to your assumptions and data, as your circumstances change over time. Let’s say you receive a substantial pay raise? No worries. Just adjust the income numbers and the new answer falls out. What if you wish to spend less on some item for a month and apply these savings to another expense item or save a little more? Not a problem. Just change the required data and the answer is immediately available.

If you want your budget preparation task to be as simple as possible don’t waste your valuable time with scraps of paper and a calculator. Use the tool that will save you time and hassle, the spreadsheet.

There are serious problems with health care in America. The cost of medical insurance continues to increase 10%, 20% or even 30% each year. This is a much higher percentage increase than most American’s annual salary increase. For the past several years health insurance was one of the few items in the family budget that saw steep increases every year. Today, this is not true. Families are seeing increases in groceries, gasoline, mortgage payments, credit card interest rates and heating oil. Couple a stretched family budget with a poor economy and the future looks worse than the past. There are predictions that unemployment rates will rise. Another prediction is that more families will not be able to afford health insurance.

Studies indicate that people without insurance do not go to the doctor for checkups or for ailments that are not debilitating. Those with chronic diseases like diabetes that go without regular checkups usually end up in the emergency room. Often, people who go without regular medical care see treatable conditions progress into irreversible health problems like a heart attack or a stroke.

Perhaps a better description of our health care system would be a disease care system. There are government funded safety nets for those sick enough to go to the emergency room but in most cases there is not funding for wellness care or chronic disease management. This situation will only get worse as more Americans lose their jobs and their health insurance.

It is not just patients that are frustrated with our current system. Doctors are burdened by the excessive paperwork required by medical insurance companies. Most doctors today have one or more employees dedicated to processing insurance forms and following up with insurance carriers that do not pay in a timely manner. The set fees for Medicare and Medicaid patients are often far below actual costs for the service rendered. Politicians have been talking about reforming our health care system for decades and little has changed except the rising costs.

Doctors are also frustrated by laws that prevent them from charging patients without insurance less than Medicare and Medicaid set fees. Most doctors sincerely want to help their patients with little means by reducing fees so they will get regular medical care.

In the last few years, doctors in many cities across America have opted to discontinue accepting medical insurance and to change their practice to a cash only business. While some doctors do this on their own, in most cases a group of doctors work together and come up with a medical care plan. While these plans are not insurance, since they are a structured plan they are legal.

Doctor after doctor that has made this conversion to a cash only business has reported that they actually make more money. They are able to eliminate the staff personnel that handled insurance claims. They get paid as services are performed instead of waiting up to several months for payment. They no longer have to argue with the insurance company about needed treatment or tests. They are able to totally focus on treating their patients. Doctors report operating a cash only business is much less stressful and allows them to be more responsive to their patients needs.

Patients also like the Patients also like the cash only system. Since routine office visits are priced similar to an insurance co-pay more people without insurance are able to afford medical treatment. Some people choose to carry catastrophic medical insurance only and use the cash doctors for checkups and routine care. Since routine office visits are priced similar to an insurance co-pay more people without insurance are able to afford medical treatment. Some people choose to carry catastrophic medical insurance only and use the cash doctors for checkups and routine care.

If you are one of the growing numbers of Americans without medical insurance or if the cost of your insurance takes too big of a bite out of your budget, do some checking and see if your community has cash only doctors. If so, ask questions and find out exactly how they structure their fees. You may just find an affordable alternative to maintaining good health.

When you look around your neighborhoods, it’s hard to find any good news. Friends and neighbors may have lost their jobs or be on short-time. There are foreclosed properties on every street. Shops and businesses have been closing down with increasing frequency. These are the signs of a real recession where unemployment and poverty stalk the land. The cause of all this pain is not hard to find. We have all been living beyond our means. When the banks and credit card companies offered us more money to borrow, we just took it. Why bother to save when the value of our homes only goes up? Let’s plan for our retirement by borrowing cheap money and buying stocks and other more risky investments. No-one ever loses if they follow the advice of the credit rating agencies. Well, we know better now. What goes up can also come down. What is given a triple A rating can be junk tomorrow.

In the midst of all this chaos, the credit card operators have been cutting back on the borrowing limits. This has forced pain on us for two reasons. Firstly, finding the money to pay down our debts more quickly means redesigning the family budget. Sacrifices have to be made. Secondly, the way the credit score is calculated depends in part on the extent to which we use the credit cards we have. If the limits are reduced, we look like bad risks because the amount borrowed is closer to the limit. We have less money available to borrow and cut down on card usage so we can repay faster. Put the two together and the score falls. This is a direct criticism of the methods used to calculate the scores. It produces a fundamentally unfair result during a recession.

This would not be a problem if the credit score was only used by banks and credit card operators. But it’s also used by companies to help decide whether to employ you, by landlords deciding whether to rent to you and by insurance companies deciding whether you are a responsible person. National figures show more than half all insurance companies use credit scores as a key factor in deciding your premium rate. This is extraordinary. There is only one possible effect of being in debt when it comes to the way in which you drive. If you cannot afford to repair your vehicle, you drive defensively to reduce the risk of an accident.

Some states like California and Massachusetts have banned the use of credit score for this purpose, but they are a minority. They cite discrimination as a reason for the ban. The majority of the population without access to banking services and credit cards fall into minority racial groups. When they do not have a credit score, they are forced to pay a higher premium simply because of who they are, not how they drive. So, when you are looking for affordable cover, get the maximum possible number of auto insurance quotes to find the best policies. If you live in a state which refuses the regulation of the auto insurance market, contact your local government representatives and tell them how much pain you are suffering because of this unfair use of credit scores.