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Hey everybody, welcome to the show. My name is Dave Hall. I'm the prosperity guy, so excited for today's show. Today we are actually going to be talking about health insurance. I've got one of my good friends , special guests with us today, Gabriella Benitez. She is a plan consultant for Diversified Insurance. Gabriela , how are you today?
I am doing great. Thank you for asking.
Gabriela, it's taken us a while to put this together between schedules, you being busy, summer vacation, all of these things, so excited to be back together to start answering some questions that many of our listeners have about health insurance.
Yes, I know. Finally, today's the day.
Well it's so interesting because there's been so many things going on in the industry. We see all the changes where you know Obamacare comes in and then we see Trump come in and make those the changes that he's made. Very excited today because we're going to talk about all these topics and help our listeners better understand some of the choices they have and how they can make better choices, especially when it comes to their health insurance.
Yes, let's get started with kind of a simple question there. There's a lot of plans out there. There's a lot of options that people have for health insurance. How can someone know how to pick the right one?
Okay, well let's start with how it's being offered. So if you're being offered a group health insurance plan through an employer sponsored plan, then you're going to be given a couple of options, usually two different options. So the best thing is to look at the deductibles, to look at the maximum out of pocket and then just basically what your needs are. Are you going to be utilizing insurance? Are you not going to use insurance as much?
So it really has to be customized to your particular needs. So you need to look at thee deductible and the maximum out of pocket as a starting point.
And I know there was a period of time, and I don't know if it still is the case, that you could get an individual plan as well. Best option for people if the employers are offering a benefit versus you going and getting the insurance on your own.
So it's best to get it through your employer sponsored plan because they will pay a percentage of that premium. So I'd say it's cheaper, it's more affordable, so that's the best option. Individuals, especially if they're part-timers and they don't qualify for an employer sponsored plan, they can actually go to the marketplace which has the Obamacare , that's what they call it, and then they could get a subsidized premium plan there for their family.
It's very interesting as we talk about this. I live in Puerto Rico, as you know, and many of our listeners know. Here the process is so different. You know it's very interesting. When I moved here to the island, I actually had to get an individual plan because our company wasn't established, we didn't have group benefits and I thought it was covered. I thought I had the perfect insurance. I talked to my insurance broker.
Well then one day I was on the phone with him and just somehow we crossed the topic of what happened if I were to have a heart attack or have some type of organ failure because, Dave, you realize you're not covered for any of that, right? And I'm like, wait a second, that's why I buy insurance. I want to make sure that I'm covered. And he says no here, unfortunately in Puerto Rico, unless you're on a group plan, your insurance isn't going to cover these things.
Now in the states, I'm sure it's not that drastic, but you bring up a very important point, Gabriela, is we really need to be careful of what we're getting and make sure that what we're buying is truly what we think we have.
Right? And that was perfect time, Dave, to really be a true consumer. We really need to understand what we're buying, what our needs are, and is this plan really going to be there when we need it. And it used to be that you were offered a plan and it was covered at 100% with very small fees . That's not around anymore.
So now really we need to be true consumers and understand what our options are and make sure that we're really in that best option, whether that's an individual policy or in a group policy.
And how can people better understand this process? I mean, as a consumer, even for me, I'm a CPA, I have a lot of financial background. You would think that if anybody, I should understand this, but I made a horrible decision and didn't even realize I was making that bad decision. So how do people keep from having this happen to them?
That's the reason why it's so important to have a broker. Because when you have a broker you're going to pay the same fee whether you have a broker or not. And it's the best. It's best for you to actually find a broker's advice because they're going to go through questions. Like I normally say okay, tell me about what you're going to be using the insurance f or. Do you anticipate having any procedures done?
So we have to find t hat customized plan, for sake of a better word, to make sure that you have a plan that it's going to be affordable for you and that it's g oing t o fit your particular needs.
I think you're bringing up a very important point that's customized. I think many times we look at insurance and we think, oh it's one size fits all. Everybody's going to get this same policy out there at the same benefits. And you're right, I mean my family, the benefits that I need may be completely different than what you need. Would you agree with that?
Totally. I have individuals that I have, they're like, hey, I am going to be on a very high deductible health plan and my wife is using insurance all the time. So she wants a really low deductible plan and so we say, okay, well we kind of have to separate you, but there's a lot of education that has to take place because a lot of times if you look at a non HSA plan versus an HSA plan, not maximum out of pocket on the HSA plan, which is the high deductible health plan.
It's usually lower than the other plan, but yet it's more expensive. So again, that's why it's really to consumers b est i nterest to really find someone that can help t hem because otherwise they could be paying a lot more for a plan to h ave the same maximum out of pocket as another plan that they w ould h ave been paying a hundred or $200 l ess p er month.
Such great information. And with that you bring up another important point which is HSA. Can you explain? Most of our listeners probably know what that is by now, but for those that don't, what does that HSA stand for?
Yeah. Thank you. It's a high deductible health plan. It's an HSA, health savings account . So certain plans, if they have at least a $1,500 deductible, they can be considered an HSA plan and it basically means everything is subject to that deductible before the insurance carrier will pay for any services other than preventative services in network would be pay at 100% because of healthcare reform.
Okay, and then let me maybe talk briefly about the HSA. Since I'm an accountant, it's something that we deal with quite a bit. Make sure I get all the facts right as we talk about it, but basically the HSA is set up so that you can put in money inside of that account.
You get a tax deduction for, you're not going to pay taxes on the money that goes in there and then be able to pay out the copays, the deductibles, all of those types of things that you're dealing with on a medical side without having a tax consequence . Am I correct in the way I've explained that?
Yup , it's exactly right. The nice thing about an HSA comparing it to a flexible spending account is that it carries over from year to year so people don't lose that money. So I always tell people, hey, look into the HSA because you never lose the money and it's a bank account. You keep it and it grows from year to year.
And it's become definitely much more popular over the last five or 10 years. I know we have them for our family and use it all the times . It's been a very effective way for us to cover money costs that we have. Obviously with six children, there's something going on, you know , whether it's a broken bone or there's somebody needing to go see the doctor for some reason.
But if you look at it, they can be a great way, Prosperity Nation, as you look into your own insurance, a health savings account can be a great way to help offset some of those costs. Because like she's saying that you're probably not going to become rich off of the account. Now , from what I've seen, that's going to be put into a bank account, but it's making interest. At least it's growing. You're getting the tax benefits, you can carry it over. You're always going have that.
So seriously, look at this with your own insurance. If you've got a high deductible plan, this can be a great way to really help you save some dollars and especially put some money back in your pocket that you'd be giving to Uncle Sam.
Right. And then the difference with a traditional plan and an HSA plan, typically you're talking about you know 10-15% so that 10-15% premium difference, you can put it into your health savings account and access those dollars and when you need to use healthcare instead of giving it to the insurance carrier, because the insurance carrier will never come back and say, Dave, you are so healthy let me give you 10-15% back on your premium. They won't do that.
So in a way, you're basically self-insuring for a small portion of that, saying hey I'll take the risk when I'm healthy and I eat right, I exercise, I do all those things and there's going to be many years that we won't use it. And that's happened even in our family with six now.
Unfortunately, most years we do end up using it because there are just so many random issues that we've got to deal with, but there have been years where I've had that extra and it has been nice to be able to carry it forward and have it for future circumstances that we may have.
Right.
Gabriela I know also with the insurance policy , something we need to talk about is in network, out of network. You know if you have a policy, I know that's very important. If you have doctors, especially that you've gotten used to going and seeing. Can you talk briefly about how that works? Making sure that people understand it correctly so they're hopefully being able to use their insurance as much as they possibly can for what they need.
Right. So when you're being offered a plan, whether that's individual or a group plan, they're going to be talking about the network and this is your broker or you go online and you'll see the network.
So just pay very close attention to that provider network because if your doctor or hospital or urgent care facility closest to you is not in that network, then you're going to be paying a lot more out-of-pocket to go to that facility for the most part, or in certain circumstances, you can be paying 100% of that service because you may not have out of network benefits.
Typically insurances will cover urgent care and emergency situations out of network, and when I'm saying emergency situations, these are life threatening situations.
Very important information for people to understand. I know for me, another funny Puerto Rico story, we have these happen all the time. I love living on the island, but there's always just strange things unfortunately to happen. I had a daughter that needed knee surgery. We've gone through, we've gotten everything approved. Insurance said, this was when I was on my individual plan that wasn't going to cover my heart attack. Anyway, everything had been approved.
They completely approved the surgery and then the night before we got a phone call and they said, yes the surgery's approved, but all the parts that go in her knee are not approved and you need to pay $6,000. Luckily we had the money and we were able to pay it. We were able to get the surgery and get it done. But if you can imagine for an average family, a $6,000 phone call the night before a surgery that's so important.
And again, for parts that had to go in the knee, I mean there was no way they should have even been doing the surgery if they couldn't put the parts in. So these are extremes. You know, you're not seeing this if you're living in the United States, you're not seeing these things happen. But you do need to be careful because planning, making sure that you're doing your homework, these things are going to definitely help you as you make the decisions that you need to make.
Yeah. Again, being consumers, making sure that the services you're going to be receiving are preapproved and that you are really on top of it.
Gabriela are there other things specifically that you can think of that people often overlook when they're getting into insurance that may be our consumers need to be aware of?
What I've noticed with smaller companies, when a company has less than 50 employees, they're not mandated by health care reform. So a lot of times they offer benefits just because they want to keep their employees happy, but sometimes they're not able to pay 100% of that premium, so then employees are having to pay 50% of that premium. So then sometimes employees will go to the marketplace thinking, oh, I can get a bigger subsidy in the marketplace than through my employer sponsored plan.
And then they run into that situation where if there is an audit with the IRS and if money was given to them from the marketplace, they're going to ask for that money back. So it's very important that people really understand if you're being offered a group sponsored plan, and you as the employee are not eligible to obtain a subsidy, even if it's more money that's given to you than your employer, you still have to be going to an employer sponsored plan.
Very important, Prosperity Nation, make sure that you've paid attention to what she's talking about there. Let's talk a little bit more about this because a lot of this was put in by Obama with the Obamacare laws, the affordable care act. Now Trump's gotten into office. Things have changed. Can you talk briefly about some of the changes that have happened and things that maybe apply to year ago even that wouldn't apply to people today?
Well, one of the most important changes is the individual act, which is the penalty that individuals had before for not having insurance coverage. Now that is gone so you don't have to have insurance. But I highly recommend, I always tell people even though we're not being penalized for not having insurance in place, it's really our responsibility to have insurance because you know, going into the emergency room, just one visit alone, that might be your full years premium worth.
So it's definitely something that changed that some people are very happy about. But you know I think it's a good thing that there was some changes to the affordable care act. And this is one that I agree with. However, I still think people need to have the responsibility of having their own insurance.
I completely agree with you and I appreciate what you're saying there because as a financial planner, as a guy that talks about financial literacy all the time, and we've got this shift of the prosperity gap to help people, there's no quicker way to destroy your finances in my mind than to be uninsured and have a catastrophe. Right?
I mean it can cost you hundreds of thousands of dollars to have a medical procedure and now your set yourself back five maybe 10 years from getting yourself where you really need to be to achieve financial success and who wants to do that.
Right? Exactly.
So let's talk now about who's covered. So I've got six kids. They range from 22 to 10 I know you have kids. What age group, I mean if I'm getting family insurance of what age group will these older kids get dropped off? Obviously the younger kids will all be covered.
So typically your dependents can be covered up to age 26. If you have special children with special needs, then there's documentation you can send to the carrier and they will cover them for a lot longer for the rest of there lives.
Okay. So not much higher than it used to be. I know, especially when I was going through college and when I was that age I think I got kicked off my parents' insurance at like 18 or 19.
The nice thing about this also Dave, is that they don't have to be going to school like it used to be where you had to prove that you're going to school. They can be working, they can be married and they can still be covered under the parent's policy as long as they are under the age of 26.
And the nice thing is is it's really at that point, not that expensive either, at least from what I've seen and our plan, I think we only ended up having to pay for three. I don't know if t hat's standard in the industry, but I think that caps there.
So it's nice if you have more than three, then it's great you know, because you're paying that same fee for the most part. So yeah, definitely keep everybody in your policy up to age 26.
Very great information. Very helpful for families. As you're going through this process, what about domestic partners? I know we've got situations now where people are, living different lifestyles than we did 10 or 15 years ago or especially from an insurance side of saying, okay, you don't want coverage for a domestic partner. Is that type of insurance available?
It is. And most carriers will allow domestic partner coverage. Now as far as employer sponsored plans, the employer gets to decide if they want to add that rider to their group coverage.
Okay. Very interesting. I know I have one of my friends who is now a spouse, two guys that ended up getting married, and that was one of the big things that they were complaining about. After they were very excited, they could finally get married and then they realized insurance laws changed all of a sudden. They're like wait I don't know if we want the consequences of this.
But you know , obviously all in all they were super happy to be able to show their commitment to each other and to be able to continue to progress their lives that way.
Right.
So we've covered a lot of information today. Gabriela, anything else that you can think of that maybe we haven't covered that really would help our listeners and help those people that are trying to get themselves ahead financially, especially when it's dealing with insurance and making sure they're getting the biggest bang for their buck?
Yeah. Well first of all is again, you make sure you have an individual or group health insurance plan. Do not go uninsured. Then pay attention again to that deductible and the maximum out of pocket and then your premiums. Pay very close attention to those three because then that will guide your decision as far as what plan you want to purchase. And then again, just be real consumers and make sure you educate yourself on those options so you know how to utilize your insurance benefits.
What about getting referrals? Let's talk briefly, I guess about that. I mean, are there times that you have to have referrals to make sure it's paid or there has to be a pre-authorization that needs to be done by your insurance?
It used to be that you had to get referrals. Most plans are not like those old HMO plans, so now as long as it's medically necessary, then it would be covered. I always like to make sure my doctor is okay with me going to a specialist or having a procedure. There is no physical referral, but then they put it on their notes, recommended procedure and those notes go to the insurance carrier.
Now it is our job, again we need to be real consumers, to call the insurance carrier and say, Hey, I just want to make sure that this has been preauthorized by my doctor or make sure that this procedure does not need to be preauthorized. So you call the insurance carrier and then you give them your procedure code and diagnosis. Sometimes the doctors will share that information and then they're like, Yep , you're good to go. Or No, we need additional information.
And it's best to do that before because I've had situations where people are like, well I thought my doctor did it all for me. You still need to double check.
What about copays? Why do they exist? Why is it important that we pay the copays? Why don't they just cover all that in your insurance,
There's always on a traditional plan, which is the non HSA, you're always gonna have a copayment and that is really what insurances do is say, hey, you are going to be taking some of this risk with us. You're going to pay a $25 copayment if you go to a primary care physician.
And you know, as an example, a specialist is always going to be a little bit more pricier, and same with emergency rooms, they're higher copayments because they want to steer people away from going to the ER and instead go to an urgent care center.
And it probably helps cut down on some of the fraud I would assume too , I mean, if the insurance company's covering everything, it'd be very easy to tell a patient, you just got to keep coming back. You've got to come back, you've got to come back.
That's a great point. Yep , exactly and that people also will be abusing it. Oh, I have a headache. I'm just going to go instead of getting a Tylenol here. You would be surprised, sometimes people like to just go to a doctor. I don't know why they would, but you know, sometimes people are like that and they just run to the ER or the doctor and it's good to have that copayment in place for sure.
Are there insurances out there where not only do you have a copay, but are there insurances out there that actually give you some free benefits? Maybe a free health check or help you to stay healthy versus, you know, wait until you get sick?
Right.
Well, when healthcare reform passed, one of the guidelines was that insurance carriers would be covering preventive care services at 100%. So that was a great thing that I honestly love because I feel like people really need to take advantage of those preventive services. And when they did that it's everything in network. So they said, hey, your in network preventive services should be covered at 100% and this is what that means.
So every carrier has their own list and again it's mandated by healthcare reform. So that's a benefit that people really need to take advantage of. Prosperity Nation, I hope you realize what she's talking about here and what's available to you. I know for myself, we have it on our plans here in Puerto Rico, but there are options for you to take care of yourself before you wait to the point you're so sick. Many times people wait because they feel like they don't have the money.
They don't want to pay the copay. Well, don't wait, go in, make sure you're getting those free services.
And I can't tell you the list of what we have here, but I know when they came in and the broker like yourself came into our office and went through all the details, there was a pretty healthy list of things that we could have done just to make sure that we were staying healthy, we're doing the things that we should be doing, and that our family was going to make sure we didn't have any more high costs than we had to.
Sometimes certain carriers will do discounts on gym memberships. Again, being a consumer and just educating yourself and making sure that you're really utilizing all the resources they have and your broker resources to guide you through those chaos because it's really confusing for a lot of people.
Well, Gabriela, thank you so much for being on the show today. This is amazing information that I'm so happy that our listeners are going to have access to. It's just so nice to be able to talk about these topics that really affect each of us. And unfortunately, we get so busy that many times we don't give the attention that we should.
I'm just very honored to be part of this conversation and thank you so much for the invite.
Anytime. My name is Dave Hall, I am the prosperity guy. You've been listening to the prosperity gap. This is the show where we help you bridge the gap from where you currently are financially to where you should be.