Category Archives: insurance

Follow-up on Personal Health Advocates

I got a follow-up email from Hayley regarding Personal Health Advocates, just thought I’d share what she wrote:

  1. The service is designed for residents of Washington, however we have helped those outside of the state. Our expertise is centered in the Washington market, so our ability to adequately assist out of state clients is more limited, unfortunately. Your readers could always call in and based on where they call from, we could attempt to refer them to services in their area.
  2. There are no qualifications necessary! The service is specifically set up to help freelancers, independent workers, and contract workers navigate complex health care decisions. We also focus on students transitioning into the workforce, elderly transitioning into medicare and retirement, and workers transitioning from employment to unemployment.
  3. We are funded through a variety of sources, including grants, our own historical reserves, and revenue which we generate from providing health insurance navigation services.

Thanks, Hayley! Does anyone have experience getting help from a PHA? Please let me know, and I’ll share your story anonymously.

Lost my first post to the angry internet gods

Sorry about the lack of posts. As you can see from the photo to the left (taken by the talented Mrs. Foundry), our family was on vacation the past few days.

I guess it’s bound to happen. I had a great post all written, and then I must have done the internet dance incorrectly, because now it’s gone. It was about a letter I got regarding the post on dealing with medical expenses. I’ll just post the letter and call it a night.  Sorry.

Name: Hayley J.
Comment: Hi Joe,

I’m interning at the Washington Health Foundation and a co-worker forwarded me Cathleen’s inquiry on dealing with medical expenses. If you would like, I believe it would be to Cathleen’s benefit to learn of our Personal Health Advocates, as this is a service we provide which assists those precisely in Cathleen’s situation.

The Personal Health Advocates is a phone service where advocates work with callers to provide personalized health advising; they answer questions on insurance coverage, help callers with any issues they may experience in receiving health care, and work with callers to find the best health coverage available to them, among other things. As we are a non-profit, not an insurance company, the Personal Health Advocates have no ulterior motives, so clients really can trust that they are receiving honest advice and guidance- working with an advocate that is purely on their side in the complex world of health care.

Cathleen also mentioned that she’s struggle with covering expenses because of the small size of her work, to which I would like to point out that this is one of the main reasons why our Personal Health Advocates exist- to help those who don’t already have someone navigating the world of insurance for them.

I hope this information is sufficient if you choose to relay it to Cathleen. If you would like to learn more, please feel free to contact me at [email address removed. Contact me if you’d like to get in touch with Hayley]. Thank you for setting up this blog, I’ve been browsing around and already find many of the past posts quite useful! Thanks for doing what you do!

-Hayley J
Intern at the Washington Health Foundation

Personal Health Advocates: (855)-WA-HEALTH

I sent Hayley a few follow-up questions on whether the service is offered to those outside Washington state, and if there are any qualifying criteria. I’ll let you know when I get an answer.

Foundry Mailbag: Dealing With Medical Expenses

Here’s the first edition of a regular column I’d like to do, called Foundry Mailbag, where I write about topics or answer questions that people have sent in. Today’s Foundry Mail comes from Cathleen, who writes:

I love your blog and would love to see a post about dealing with medical expenses. Personally that is my biggest challenge, trying to work expenses in if you have a chronic condition can be difficult to budget. (I’m not even going to go into what it’s like if you have an employer like mine that is too small to offer health insurance) I figure with all the hubbub about the recent Supreme Court ruling, it’s on many other peoples minds as well.

Keep up the good work!

First off, thank you for the kind words.

Medical expenses are like a horrible lottery that everyone has to play. Not only do you get sick or injured, but you sometimes have to pay huge amounts of money in doctor bills. Here are a few tips for dealing with them:

  1. Set up an emergency fund – This is the single biggest piece of advice I can give to anyone who’s getting their financial life in order. The size of the fund is up to you, but as a rule of thumb it should be a minimum of $1000, if you’re in debt or have other emergency spending needs. A healthy-sized emergency fund for someone with no debt is 3 – 6 months of living expenses. Store the fund in cash. Even though you’ll be getting a crummy return on investment, this is not money you want tied up in illiquid or volatile investments
  2. Expect the unexpected – I have a savings account named Doctor Bills into which I stash some money each month. When medical expenses do arise, I can tap into that account before draining my emergency fund. Think of this as being your own health insurance company. You’re paying yourself a monthly premium, and when something goes wrong, you get your bills covered by your own capitol. But unlike a real insurance company, you’re in control of the size of the premium, when you pay out, etc.
  3. Stay healthy – They say prevention is the best medicine, and I couldn’t agree more. Money spent on eating well, and time spent exercising and getting enough sleep will pay huge dividends down the line in the form of a healthy body, which means fewer doctor visits and reduced medical expenses. This also includes keeping a healthy attitude and eliminating stress from your life. A bike ride is my favorite way to stay healthy and de-stress.
  4. Negotiate your bills – None of the above tips will help Cathleen, or anyone else already saddled with large medical bills. But this tip might. Bills can be negotiated on two fronts: the medical provider and your health insurance company. I admit I’ve never done this myself, but I know it’s possible. Ramit from I Will Teach You To Be Rich is an amazing negotiator, and while he doesn’t discuss medical bills specifically, his general negotiation tips have saved me some money.
  5. Optimize for insurance – Now that the Supreme Court upheld Obamacare, people with pre-existing conditions can’t be denied insurance. That means you can shop around for a new job and make your decision of where to work based on the insurance plans that various would-be employers offer. Easier said than done, but it’s one extra tool in the financial tool box.

Hope I was able to help Cathleen, and maybe some other readers as well. Feel free to contact me if you have any questions.

How and when to shop around for insurance

Including the health insurance policy I have though my work, only 7% of our yearly expenditures go to insurance. For that price, our family is covered by a generous health policy*, Venessa and I each have life insurance, our renters policy covers the loss of any of our belongings, and both the car and scooter are adequately covered. I keep our insurance premiums low by using two tricks:

  1. Only get the bare minimum insurance you need (e.g. renters: do you really have $100k worth of stuff?), while keeping deductibles high**
  2. Every time I get a renewal notice, that trigers something in my mind that says “shop around for lower rates before you renew this policy”

I just did a thorough job shopping around for renters insurance, here are the steps I took (you will note how anal I am). These steps can easily be applied to any form of insurance.

I got quotes from every major company (Geico, Progressive, Nationwide, AmFam, PEMCO, State Farm, Allstate, Travellers) and kept track of them on a spreadsheet. The lowest quote was almost 3 times less than the highest one, so you should get quotes from all of them to see which is cheapest for your particular situation. The spreadsheet also had columns for “deductible”, “coverage levels”, etc. which helped me make apples-to-apples comparisons of the different policies.

The annoying thing with renters insurance is you have to figure out the combined value of everything you own (“Personal Property”). It’s a pain in the ass, but the alternative is having more insurance than you need (or not enough). If you live in an earthquake-prone area, getting an “Earthquake rider” is a good idea. I think it only added $2/month to my premium.

You can dial up/down your liability coverage to have a cheaper or more expensive premium, depending on your level of risk tolerance.

Tweak the above instructions for different kinds of insurance. For example, do you really need collision and comprehensive on your auto insurance? If your car is paid off and/or more than 7ish years old, you don’t need it.***

I actually enjoyed this process and look forward to doing it again in a year or so****. Not only does it save money but it’s interesting to see how tweaks to the coverage can impact your premium.

Let me know if you have any questions, I’m happy to help.

* I can’t take credit for this one since I didn’t do any shopping around for health insurance. It’s just what my company provides, and I consider myself very lucky to be covered by their group policy.

** You can only have high deductibles if you have an emergency fund to cover smaller losses. You do have an emergency fund with at least $1000 and at most 6 months worth of living expenses, right?

*** If your car isn’t paid off, what the hell are you doing borrowing money for a more expensive car than you can afford? Either figure out a way to save more money to get your fleet paid off, or sell it and use that cash to buy a car you can own outright.

**** I don’t recommend switching insurance companies any more frequently than once a year since it does impact your credit and insurability.

An inside look into your credit score

I did the yearly (or whenever) shopping around for cheaper insurance, and found that I was overpaying for renter’s insurance, so I switched from PEMCO to American Family. I was getting frustrated with PEMCO’s customer service at any rate.

When I got my new insurance policy, it came with a credit notice (which apparently is the law now) stating how my credit impacted my insurance premium. The interesting part is that it itemized some of my personal credit criteria, and told me the optimal values for these criteria (according to Transunion, at least).

Since I’m a nice guy, you can now see how to optimize your credit score without the hassle of changing insurance policies.  I’ll also give you some hints on improving your credit:

  • Your oldest revolving account (i.e. credit card) should be 18 years old! Mine is only 10 years old. It’s important to hold on to your oldest credit card. If your oldest card charges a yearly fee, switch cards now so that you can get a new “oldest” card asap.
  • Your most recent credit application should be over two years ago. Mine was 7 months ago, but well worth the temporary ding to my credit. However, if you plan on getting a loan, do not apply for any credit cards for 2 years prior!
  • This one is the most fascinating: A quarter to a half of your credit accounts should have a balance greater than 50% of their credit limit. Only 15% of my accounts had such a balance, which I consider a good thing.

It’s interesting that you’re penalized for keeping your balances low. I guess the credit agencies want to see that you can leverage your credit but still make your monthly payments.

All this was just a long way of reminding you to shop around for insurance from time to time. My next post will explain how to do that.

How much do you spend on health insurance?

my leg, after a game of tackle football

At Get Rich Slowly, they’re asking how much everyone spends on health insurance. My answer got kind of long for a blog comment, so I decided to post it here:

I get medical/vision from my employer, through Aetna. For me+spouse+children, the premium is $232 per month. Part of it is taken from my paycheck pre-taxes (i.e. it lowers my taxable income). I’m not sure what percent of the total cost this is, but I know it’s heavily subsidized by my employer. (Also, this doesn’t include dental, which is extra.)

The plan is a complex “health fund” (Aetna also offers the standard PPO or EPO, but that would be boring and the premiums for those plans are higher).

The first $1500 of medical/drug expenses each year are covered 100% by Aetna (that’s the “health fund”). If unused, it rolls over to the next year but we use it up about half-way through the year, at best. The next $1500 we pay 100% out of pocket (they call it the deductible).

After that, it behaves more like a traditional PPO. We can go to any healthcare provider. In-network, we pay a 10% co-insurance. Out-of-network, I think the co-insurance goes up to 30%, but there are so many doctors in-network, I’ve never needed to go out-of-network before.

“Preventative care” like yearly physicals and well-child visits are covered 100%.

“Alternative care” such as acupuncture and massage are also covered, up to a certain amount. Physical Therapy (including chiropractic) is covered up to 25 visits a year. Prescription drugs are covered at about the same rate, for generics at least. The 10% co-insurance applies to all these.

For vision, we each get one eye exam, plus a pair of eyeglasses or an order of contact lenses per year.

I think this is a pretty good plan, and I consider myself very lucky to have it as an option through my employer.

How much do you spend on health insurance?