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The health insurance industry is very unique. When you compare it to other types of insurance, you will find that most types of insurances are based on the catastrophe.
Your auto insurance does not cover new tires or oil changes. Your home owners insurance does not pay for a new paint job or if your oven breaks down.
Somehow, health insurance pays for doctor visits (new tires) and prescription drugs (oil changes). These two benefits are what add most of the cost to a health care plan.
With health insurance you pay for these benefits whether you use them or not.
This is why health savings accounts (HSA) make a lot of sense. The HSA, is used in conjunction with, a High Deductible Health Plan (HDHP). The deductible, as you might guess, is higher and only covers the doctor visits and prescriptions after you meet that deductible. It protects you from the catastrophic loss and kind of puts you in control of your health care dollars. They often times cost half as much as a co-pay plan would cost.
H.S.A plans were we created in Medicare legislation and signed in to law by President, George W. Bush, on December 8, 2003. They were originally called Medical Savings Accounts (MSA). They were created by Senator Bill Archer, R-Texas.
Mr. Archer’s project was to reduce the cost of health insurance for the self-employed without sacrificing coverage for a major illness. Mr. Archer’s brilliant idea was to eliminate the part of the traditional health plan that cost the most money. These expensive benefits include doctor visit “co-pays” and outpatient prescription drug “co-pays”. Archer proposed to congress that if you eliminated these features from the health plan it was conceivable to cut your health premiums considerably. He was absolutely right!
Here is an Illinois example. A family of four with Blue Cross Blue Shield of Illinois parents in the Chicago Area 40 years old with two children $2500 deductible individual deductible $7500 family deductible is $683 per month. That plan has co-pays, Rx coverage and an annual out of pocket maximum of $9000 ( 80% paid by insurance 20% paid by insured until they have spent $9000). That is significant because it is a high out of pocket maximum plus your premiums. And how often do you see a doctor in a given year?
Now let’s look at the same situation, same carrier with an H.S.A plan. This we will choose a $5200 family deductible. This plan is 100% coverage after the deductible, so my out of pocket maximum is lower as well. It is better coverage for the big, more catastrophic things that can happen. This plans premium $473.
It costs this family $200 more per month for the privilege of having a co-pay and prescription coverage. Now, if you are on some significant medications, or go to the doctor twice per month, this type of plan might not be right, but I do not believe that most Americans do go to the doctor that frequently.
Then, if you choose too you can, the $200 per month savings and set up the “saving account” portion of the plan, in which, you can fund it like an IRA, in which money you put it tax deferred and goes out tax free if you use it for medical expenses. In two years, you would have $4800 saved in your account. That is almost enough to cover your entire deductible.
In 2012, the maximum you can put into the savings account is $3100 for an individual and $6250 for a family. If you are over age 55 you can put an additional $1000 per year into the account as a “catch up” contribution.
You can pull this money from your account, for qualified medical expenses if you should incur them through the year. Unlike the FLEX SPENDING ACCOUNT (FSA) that many have had through their employment, the money you put into the account can carry over from year to year. So if you were to put $5000 in your account this year and you do not use any of it, you have $5000 to start next year. Remember, most or all of this money is money that you would have given to the insurance company for the privilege of having a “co-pay”.
The state of Illinois takes very good care of the insurance needs of its citizens. There are public as well as private insurance policies, with different options to suits all kinds of people and their requirements.
Illinois health insurance policies can be classified as PPOs, HMOs, traditional individual and family coverage, children’s health insurance plans, and insurance for people over 65 years of age. Some other specific plans are short-term health insurance, dental plans, Illinois HSA Qualified High Deductible Insurance Quotes Individual and Family, small group health insurance plans, senior health insurance, employer-based group health insurance plans, international travel health insurance plans, student health insurance plans, disability insurance, kid’s health insurance, and the CHIP (comprehensive health insurance program).
Illinois has special insurance polices such as Illinois Medicaid, KidCare, and Illinois Department of Aging – Pharmaceutical Assistance Program, for people who have been denied insurance by regular insurance companies. The Illinois CHIP (Comprehensive Health Insurance Plan) is a state program for people who qualify for coverage under sections 7 or 15 of the CHIP Act. There are three plans under this: Plan 2, Plan 3 and Plan 5. Each plan has deductibles of $500, $1,000, $1,500, $2,500, and $5,000. Plan 2 is available to eligible persons who are enrolled in both Parts A and B of Medicare due to disability or end-stage renal disease, since they are ineligible for all other CHIP benefit plans. Plan 3 is a Preferred Provider Organization (PPO) plan available only to eligible persons who qualify for traditional CHIP under Section 7 and are not eligible for Medicare. Plan 5 is also a PPO plan available only to federally eligible individuals who qualify for HIPAA-CHIP under Section 15.
Some companies are also offering the guaranteed acceptance medical plans for Illinois residents. The monthly premiums vary according to the age of the enrollee and the number of people being insured. The premiums range from $69.35 for a single 30-year old person to $506.23 for a family in which the enrollee is in the age group of 60-64 years. Other kinds of plans are short-term plans, group plans for employers, tax advantaged health savings accounts and Qualified High-Deductible Health Plans (HDHPs). Some of the most popular Illinois health insurance companies are: UniCare, Anthem, Blue Cross /Blue Shield of Illinois, Humana One, Fortis Short-Term Medical, Celtic, American Medical Security and Fortis Student Select.
While selecting a health insurance policy, understand various terms like the premium to be paid, the limits of liability, the coverage provided, the policy limits, benefits, deductibles, and terms of insurance. Other aspects include co-insurance, co-payments, out-of-pocket expenses, exclusions, lifetime maximum, waiting period, coordination of benefits, grace period and so on. The choice of doctors, specialist care, pre-existing conditions, emergency and hospital care, regular physicals and health screenings, prescription drug coverage, obstetrician/gynecologist coverage, costs and additional services should also be considered. Also get to know the policy’s coverage for planned hospitalizations as well as emergency care.
Other aspects to be taken into account while choosing a health insurance plan are how the plan handles physical examinations and health screenings, vision care, and dental services; what is the care and counseling for mental health; what are the services for drug and alcohol abuse; is there ongoing care for chronic and long-term diseases; does it cover physical therapy and rehabilitative care; does it cover nursing home, home health and hospice care; does it cover alternative medical care like acupuncture; does it cover experimental treatments and therapies, and so on.
This article is probably not going to win me any popularity contests. If you don’t like listening to some possible hard facts, I would suggest you quit reading through this now. But, if you are practical individual who would rather be prepared for the worst of while hoping for the best rather than simply anticipating the best; this is the most important article you’ll go through all year.
What’s in this article?
– A very fast background on pensions
– Where the future of your Illinois pension may be heading
– Why there is no way to lose by beginning to save in an outside retirement account in addition to your pension
Very swiftly, here is how pensions work:
Each year workers contribute to the pension it becomes a little bigger and whoever is administrating the pension (in your case, the state of Illinois) also needs to put funds in yearly for the pension to remain healthy. With these combined pension contributions, the accounts should be big enough that the revenue generated on interest is sufficient to take care of the payouts to current retired workers without having to dip into the pension’s principal.
So that is simple. Workers pay, the state also gives, and the retired workers get paid. Pensions are the standard in the public arena. They also used to be the standard in the private arena until the last generations, when companies started shifting to 401(k)s.
Why the shift?
I just read a book called Retirement Heist by Ellen Schultz, an investigative journalist for the Wall Street Journal. If you do not have enough reasons to be mad at private enterprise as well as our state and federal governments, go through this book. Much of the book was on the downfall of pensions in the corporate world but that tale has a very direct link to your public pension. It is important for you to know this history.
Many of our nation’s big companies had very well funded pensions. Overfunded actually, often having around $1.50 for every $1.00 they were expected to owe to their current and future retirees. But through a line of hidden methods and exploitation of tax loopholes, corporate management (aided by independent financial consulting firms) was able to reap profits and gains from their pension surpluses.
After plundering their employees’ retirement account for many years, the pensions became underfunded. The corporate executives assigned the blame to their aging staff, the retiree “legacy costs”, and “spiraling” individual medical costs for employees and retirees. They clearly did not discuss or display the measures they took that transferred huge dollar amounts from their employees/retirees to revenue for their shareholders (and therefore additional bonuses and contract extensions for the executives).
They were willing to give up the benefits and retirements of their staff for fast and fleeting profits. The benefits would have paid their employees for years, but when the new financial year starts all profit and revenue numbers go back to 0.
That is why you no longer see very many individual companies providing pension programs to staff and why the 401(k) has become the standard. I do suggest reviewing the book to see all the ways they were able to take from their employees’ pension; it is truly dreadful.
But allow me to exhibit how these issues are pertinent to you and your pension.
Unfortunately, the very same financial consulting firms that aided the corporations to hide pension cuts also functioned by helping state governments conceal and disguise broadening pension deficits and liabilities. These financial consulting firms gave political leaders the tools to avoid fulfilling their pension payment obligations for years at a time.
This lack in funding allowed the law makers and politicians to generate cash for popular programs without increasing taxes for the general population. By doing this, the state politicians were made out to look like community champions and budget prodigies.
Lastly, just as the corporations finished up plundering their pensions, they began placing the scapegoat tag on their staff and retired workers. We are now seeing some states,(as well as some groups + organizations) putting the same scapegoat label on the public workers and retired public workers. In my home state, Illinois, some highly effective groups are getting a lot of backing and media coverage by placing much of our state’s individual issues on the “greedy” teachers and other public staff.
These groups have discussed the complete outliers who receive big pension payments (who were often, and obviously, politically connected), ignoring the modest pension benefits of the common public teacher or worker.
Of course, the real causes of budget and pension deficits are the self-serving politicians results who approved skipping out on contributions and passed the funding obligations to future generations (and, conveniently for them, future government leaders). They and the financial consulting companies functioned as their accomplices.
There are a few more factors to consider as well:
1) When the market took its big drops in 2008 + 2009, if your state’s pension account was not in excellent shape, then it most likely had to sell some of its holdings while they were cheap to pay their current obligation to retirees. This goes against the #1 procedure of investing: Buy Low, Sell High.
2) Furthermore, when this happens the account is becoming smaller rather than greater and places the pension in danger of not being able to create enough revenue to pay the benefits of future years without carrying on down the path of selling off assets.
3) Public pension benefits are calculated according to salary and years of service. It is common that the revenue in the method are the standard of the best X years. When benefits are calculated according to this method, an individual has significant incentive to press up their last few years of pay as much as possible. For example: A firefighter or police officer might work lots of overtime hours in their last few years. A teacher may take on more extracurricular assignments or responsibilities to boost their last years of pay and generate a substantial boost in benefits for the rest of their lives.
4) Salaries in the last decade have increased more than the stock market which indicates that required payments for the last several years and next few coming years of retirees have grown at a greater rate than pension funds have.
5) In addition to that, large groups of the baby boomer generation are retiring each year. This is further increasing pressure on pension funds.
6) It is also expected that over 3,000,000 of that same baby boomer generation will live to 100 or older. Enhancements in medication will increase how long retirees will be owed far longer than what current pension predictions account for.
7) Finally, pension fund managers may feel (and often actually are) compelled to take higher levels of risk to fulfill the investment return projections of the state.
Near the end of Retirement Heist, Ms. Schultz says “If employers [read: lawmakers for public pensions] continue to control the retirement system and manage it for their own benefit, then within our lifetimes, ‘retirement’ will inevitably revert to what it was in the 1930s and before. Society – and taxpayers – will be paying for services to support the millions of elderly, formerly middle – class Americans.”
The takeaway here is you should consider finding an additional way to save for your retirement along with your pension. This is to assure your retirement dollars will both outlive you and be sufficient to cover all of your expenses.
It has become extremely clear that even if you work for the most financially stable company in the world or for the state with the most well funded pension, you cannot 100% rely on that company or that state to provide you with something as important as your retirement. It is on all of us to take care and responsibility to assure we can leave the workplace and enjoy the retirement when we want to and the live the way we want.
With the help of the latest internet technology, you can apply for the Illinois cash advance loans from anywhere, you don’t have to be in Illinois as your boundary is virtual. You may be based anywhere in the US, and when in need of a sudden cash requirement, you can always get a payday loan. Emergencies can happen anytime and anywhere. You do not have the time or patience go through the lengthy procedures of loan approval by banks for a regular personal loan. At that time, cash loans till payday comes very handy, all you have to do is to access the lenders’ sites through internet and start off the procedure. However, you need to be watchful that these loans entail a very high rate of interest and they are only for short durations. You should take these loans when you don’t have any other option left.
Accessibility And Criteria For Qualification
The lending amount for these loans is generally very small which is from $100 to $1000 or a few hundreds more. The payback period is also short, two to four weeks, this can be extended, but an extension creates more fee and other charges.
Cash advance loan in Illinois or for that matter any other state in the US is a fast loan option, where you need not wait for days to get the approval; this is done in hours. To start with, you must satisfy these minimum criteria:
You must be a US citizen, at least 18 years of age
You must have a steady job or a regular source of income, monthly income not less than $1000
You must have an active bank account in your name
Quick Service Is The Key
Even with a bad credit history, you just need to fulfill the above criteria and almost certainly, you will get the approval for the fast cash loans. Then the approved amount is deposited directly in your bank account. In less than a day or maximum on the next working day, you will receive the cash you need so badly. The repayment is also very simple, direct withdrawal of the amount and fee is done from your bank account on your payday. Now, you may use the money for any purpose: paying bills, credit card payments, unexpected medical expenses, travel etc.
A word of caution here, the cash advance loans in Illinois comes with a cost, a high cost. Thus, it is advisable to use the money for urgent and emergency purposes only. In addition, you must make an effort to pay back the loan as soon as possible. Loan extension and further payday loans will drive you in a bigger financial mess that you already are. A judicial and well planned payday loan is your best friend in need….indeed!
Fast cash loan is devised for receiving fast cash, in case of urgent financial requirement. The process is simple and carried out online so it is also referred to as online advance loan for people in Illinois. Eligibility criteria are also very simple for Illinois cash advance payday loan. However, make sure you do not misuse the cash advance in Illinois.
Getting money fast becomes a possibility with Illinois cash advance payday loan. It is true that companies offering fast cash loan can offer money to you in a day’s time. When you fall short of a few hundred dollars to meet the month’s expenses, you need some quick money. Companies offering this can come to your rescue and provide you with that required amount with minimum formalities and no hassles. These loans are generally secured with a personal check or your bank account may be asked for to withdraw the money automatically on the date agreed upon.
Look At The Costs Too
It seems too good to be true! It is true but there is something that you need to watch out for. These loans are pretty expensive and this convenience which is widely advertised has a hefty price tag attached to it. Some people might wonder, why is the lending company making things so easy for the borrower?
The answer is simple, in case of Illinois cash advance payday loan, the lending company is earning a huge profit by lending a small amount of money for just a few weeks. For example, the fee is mostly around $15-$30 for every $100 borrowed for 14 days. If the borrower is unable to pay back on time, the fee mounts on and these companies profit even more.
The lenders and their agents make you believe that as a borrower, you are not losing much. You receive money so fast and easily that you can have peace of mind as you may avoid all late payment fees, check bouncing fees, etc. Even with a bad credit record and very less money in your bank account, you can get cash advance in Illinois. This is the reason, the business of payday loan is booming in Illinois and other parts of the US.
The lenders justify high APR considering the fact that there are no credit checks and no waiting. Lenders say that high-risk lending entail a higher fee. True Indeed! Now it is for you to decide whether you need such high cost loan. If you are faced with an emergency and no source of funds available, you can think about it, but if you are planning to take money using this service for trivial issues, please don’t! These loans are very expensive and in the long run they could create a larger financial mess for you.
You need be in Illinois to avail the services of Illinois cash advance payday loan. You can use the internet to apply online for these loans from anywhere in US. You just need to fulfill the minimum criteria set by the lender, which is very simple and all salaried people qualify for it most certainly.
You have to fill-up an online form, which asks for details of your employment and salary. They verify these data online and through phone. Then, within hours of applying for it, you receive the approval. The money is deposited in your bank account directly on the next working day. The whole procedure generally takes 24 hours or so.
In times of real emergencies and to build a good credit history, this is a worthwhile option for receiving fast cash. If used only for urgent expenses, it is worth the cost. However, if you can manage without it, nothing like it!