Health insurance in the United States

Health insurance is the one of the main avenues for the payment of medical expenses in the United States, whether through insurance premiums, social insurance such as Medicare or a social welfare program funded by taxation.[1]
Health insurance in the United States
Public health spending via publicly subsidized insurance programs such as Medicare and Medicaid makes up the largest single share of the US health care spending. For the average person, most health care spending is incurred in the last years of life when costs are met by social insurance programs rather than private medical insurance.
insurance in the United States
Most people below the age of Medicare entitlement obtain their insurance from an employer based insurance scheme.
Health insurance
Persons unable to obtain insurance through an employer and wishing to be insured have to buy a policy in the individual insurance market. This is highly expensive and premiums are typically much higher than for an equivalent policy paid for by an employer.

United States Health insurance
There is considerable debate in the US regarding the health insurance system which has many critics. President Obama has called for two main reforms. That all Americans should be covered without discrimination on age or health status and that a public health insurance should compete with private providers "to boost competition and keep the private insurance industry honest".

from:en.wikipedia.org/wiki/Health_insurance_in_the_United_States
United States Health insurances

Health insurance in the United States

What’s the recession doing to the insurance industry?

When you're sitting at home worrying about the mounting pile of bills to pay, it's easy to lose sight of the big picture. Fact is, just as you're in a new world of hurt, there are other people hurting as well. In this case, the people are the inventors in the insurance industry. They all bought shares in these big corporations when the prices were high, never thinking that the world could suddenly turn sour. Although it's a mutual insurance company, let's take State Farm as an example of what's happening across the industry. This is one of the biggest insurance companies in the US and it's just turned in an operating loss of $542 million for 2008. Its net worth just dropped a whole 16%. Now, you have to understand this company did not get caught up in mortgages of any prime. There were no securitised thises or derivative thats. This company has just been caught in the general collapse of stock exchange values.

To understand all the details, we need to look at how insurance companies work. They charge most policy holders with a vehicle or a home a monthly premium. This brings in a small mountain of cash every month. That money is invested until it's needed to pay out on claims. Some goes into fixed-income products. The rest goes into shares. As you may have noticed, the Dow and other stock exchange indexes have been in free-fall. The result is that State Farm has lost the capital value of the investments and, in many cases, no longer receives any income as interest or dividends. This might have been manageable except for this little thing called global warming that no-one believes causes hurricanes and other weather catastrophes. The last two years have seen an big increase in weather-damage claims. Put the loss of investment income and the unexpected rise in claims together and you turn a $5.46 billion profit in 2007 into a loss in 2008.

Should this make you worry? Well, look at it this way. The insurance industry is suddenly making a loss. Shareholders in general and the policy holders in State Farm are not happy. Senior officers of the companies want their bonuses. The for-profit companies are tempted to raise the premiums across the board to get their earnings back into profit. Except with a recession threatening to turn into a depression, that's not going to work. Make the policies unaffordable and people stop buying. That's why State Farms just dropped its auto insurance rates in Georgia by an average of 1.5%. For the record, this means the current premiums are 12% lower than five years ago. Since State Farms insures around one quarter of all vehicles on Georgia's roads, this is a good deal. So the next time you're shopping round for a car insurance policy, you may be pleasantly surprised that the premium rates from an increasing number of insurers have fallen in other states. The next bill may not be quite as painful as you fear.

What’s an HSA and how does it help?

The magic letters stand for a Health Savings Account and this represents a different way of solving the health plan problem. In effect, the HSA is self-insurance with tax advantages, allowing you to pay immediate medical bills, save for the future and provide protection for when you retire. You start off with a High Deductible Health Plan (HDHP). Because of the high deductible, the premiums are usually significantly less than for a more conventional policy. The idea is you pay the money saved into the HSA. Why should you do this? Well, the supposed advantages are that you control the account. You decide how the money is to be spent. If you have a standard plan, you're always waiting for the insurer to rule on whether to pay out on your claim. With an HSA, you no longer have to wait, you can authorize immediate payment. You also control how the money is invested. With a standard policy, you rely on the insurer to invest everyone's premiums to make them grow.

An HSA is not a product you buy. It's a savings account run by individuals (not couples). All you need to be able to open an account is cover from an HDHP meeting the current rules. The plan does not have to be in your name so long as you have cover, say, as a spouse. Note you can have other policies to pay some of your health costs for disability, long-term care and specific diseases. But you are ineligible if you have already signed up to Medicare or, as a member of the armed forces, you have Tricare. It's up to you to check what you are allowed to have. Your employer can set up a savings plan (although you cannot have both an HSA and a general HRA at the same time) or you can go to a bank, credit union, insurance company or one of the other bodies able to act as a trustee or custodian. A minimum deposit is usually required. You don't have to be employed to run an HSA although, if you don't file for Federal taxes, you cannot get the tax relief.

Put simply, this is a reasonable flexible and tax-efficient way of providing health insurance for yourself. But it has one key advantage. Although you cannot borrow against the money saved, you can make a one-time transfer from an IRA into an HSA, and the money from the account passes like a cash inheritance when you die. So unlike the usual health insurance premiums which are "lost", savings remain savings. The big question everyone who is eligible must ask is whether they want to self-insure. Obviously, if the savings are inadequate, the HDHP will potentially pay out. That policy is safety net but the coverage is limited. So you have to judge which works better for your family's circumstances. If you feel confident that there will always be enough available to pay for treatment during your life, this is tax free savings with you in control of the investment. But if you don't want to take the risk, a comprehensive health plan for the family may give you better peace of mind.

How to Update Your Home Insurance

Has the value of your home been increasing every year? Or, are you concerned that your homeowners insurance company might not be willing to renew your policy, as was recently announced in Florida? In today's economy—both situations mean it's time to take a close look at the value shown on your home insurance. And update your current policy or get ready to shop for a new one. You might even reduce your insurance costs.
Update Your Home Insurance
First—some basic information
When you bought your home and insured it for the first time, your agent probably measured the home and asked you for basic information about the number of bedrooms, bathrooms, living spaces and extras like a fireplace, deck, finished basement—and dogs (because certain breeds may increase your rates). Based on the size, construction and interior finish of your home, it was insured for a certain amount, which is listed on your policy as either the Actual Cash Value or the Replacement Cost. Remember, that what you are insuring is the cost to repair or rebuild your home—and that does not include the value of the land. In other words, the value shown on your policy does not include the value of your lot.

Most insurance companies have a formula for increasing the amount of coverage every year, to keep pace with increases in the cost of materials and labor. So, if you've owned your home for a while, you've probably seen small annual increases in the covered amount, and most likely in your insurance premium. But, a formula that automatically increases the value of a home is not perfect. And, sometimes the coverage amount is overstated.
How to Update Home Insurance
Ask for a home insurance policy review
Each insurer has a different approach to when and how they will review a home's value, so ask your agent or call your insurance company. The time to do this is before your policy renews, so that the value can be re-assessed and your insurance premium can be adjusted before your bill arrives.
How to Update Your Home Insurance
What you can expect is that either your agent or an underwriter at the company will ask you a series of questions about your home, in order to determine the current value for which it should be insured. Common questions include whether you've replaced any major items like a furnace or hot water tank, the condition of your appliances and flooring, and other items that have changed since you first insured your home. If this re-assessment shows that your home value was actually higher than it should have been, you can expect a rate adjustment at your next policy renewal.
How to Update Insurance
What happens when market values drop?
If home values have declined in your area, you might expect your insurance bill to drop, too. Sadly, that's not the case because what you're insuring is the cost to repair your home—not to sell it. Since the basic costs of building materials and contractors' labor rates are not going down, repair costs will continue to increase—and your insurance coverage needs to keep pace with those increases.

So, why would a home insurance adjustment ever help? Since insurance is designed to compensate you for the value of what you could lose, the cost to replace those things that depreciate over time might decrease from year to year. For example, while construction costs go up every year, the cost to replace your appliances or flooring will decrease as those items depreciate. Thus, the covered amount on your home insurance policy should increase very slowly each year—and that's why we recommend that you double-check it.

Do a home inventory today
Ok—we know this never makes it to the top of the to-do list. But, seriously, if you spend one hour doing a video, taking digital pictures or even completing a handwritten list, it will pay off if you ever have a fire, flood damage or a theft. Once your inventory is complete, be sure to keep a copy at work or give one to a relative, so you can find it when you need it.

Compare rates and coverages every three years
Even if you don't live in Florida or your rate hasn't changed recently, it's a good idea to ask another company for an insurance quote—and see what value they assign to your home, based on their questions. Every insurance company asks slightly different questions—and may provide you with a value that's closer to your sense of the market value. And, you might find different deductibles or discounts that can help you save even more. If you decide to switch, you may want to change your car insurance, because many companies offer a multi-policy discount.

How to Update Your Home Insurance