In a NY Times Op-Ed piece entitled Money Won’t Buy You Health Insurance, Donna Dubinsky shares her troubles with getting individual health insurance coverage, even though she has many millions from co-founding Palm. Based on this article, here are some ways to improve your chances of getting coverage.

1. Use an independent insurance broker. By going with an experienced broker that represents several companies instead of a sales agent employed by one single company, you have a better chance of finding a policy that best fits your needs.
2. Apply simultaneously to many different companies. Insurers always ask “Have you ever been denied health insurance?”, and you don’t want to have to answer yes. By applying to many at the same time, you won’t have to. Besides, different insurers can also have very different underwriting criteria.
3. Instead of applying as a family, apply to each company as individuals. One insurer might have a problem with one person in your family, and then reject everyone as a result. Dubinsky eventually found coverage for everyone in her family by going this route.
4. Be smart when filling out your medical history. You don’t want to leave anything important out, because that can invalidate your coverage later on. The insurer will be requesting a copy of your medical records. However, on your end it’s best to provide only exactly what is required with short, direct answers.
5. Find a way to join a group plan indirectly. The most obvious is trying to add yourself to a spouse’s group plan. Alternatively, look for potential professional groups and organizations to join in order to qualify for group health insurance plans. In some states, as long as you have a business with at least two total employees (including yourself), you qualify for a group health plan. Consider hiring an employee or even another family member part-time to qualify.

A good resource for learning about the specific health insurance rules for your state is StateHealthFacts.org. Look under “Health Insurance & Managed Care”. Finally, I absolutely agree with the final words of her article:

The new health care reform legislation is not perfect. Nothing that complex could be. But I have no doubt that the system is broken and reform is absolutely essential. If we are not going to have universal coverage but are going to rely on employer plans, then we must offer individuals, self-employed people and small businesses a place to purchase insurance at a reasonable price.

If members of Congress feel so strongly about undoing this important legislation, perhaps we should stop providing them with health insurance. Let’s credit their pay for the amount that has been paid by the taxpayers, and let them try to buy health insurance in the individual market. My bet is that they all would be denied. Health insurance reform might suddenly not seem to them like such a bad idea.

Yes!

Personal umbrella insurance is additional liability insurance, designed to pay out on top of your existing auto and homeowner’s/renter’s insurance policies. For example, you may only have $300,000 in liability coverage on your car insurance. If you are hit with a claim of $1,000,000, you would be on the hook for $700,000 yourself unless you had an adequate umbrella insurance policy. Here is a diagram explaining this from MSN Money:

This was taken from a previous post of reasons why I have umbrella insurance, which included some examples from news clippings. I won’t expand too much further here.

In a recent Bogleheads post, forum member Quasimodo shared an informative CBS Marketwatch article that included several more real-life examples where umbrella insurance coverage kicked in to save the day. Read it for the actual stories, but here are a few example scenarios:

• You are an car accident with multiple people with serious injuries, and the medical bills are astronomical.
• You are in a car accident on the freeway involving a semi-truck carrying $750,000 of cargo.
• An acquaintance gets injured at your house.
• You are a chaperone on a field trip and one of the kids hurts themselves.
• You host a party, someone else brings alcohol, and someone underage gets hurt or DUIs.
• Your son or daughter borrows a friend’s car, and wrecks the car or injures someone.

The article also presents some good questions to ask about coverage details and possible exclusions, which I will need to follow-up on. Mrs. MMB and I pay about $300 a year for $2 million of umbrella insurance covering two cars and a homeowner’s policy. We find it a good value for the peace of mind it gives.

You can get a third-part insurer to be the umbrella over differing auto and/or homeowner’s insurers, as long as you have the required liability amounts underneath. I wouldn’t fall for the argument that if you don’t have significant assets – especially as compared to your current liability limits – then you don’t need umbrella insurance. If you have $100,000 and are covered for $100,000, what if you are found liable for $200,000? You’d still be completely broke – and how long did it take you to accumulate that in the first place?

Here is a chart of average auto insurance rates by state, via AARP.com, shaded by overage ranges. Click for an interactive map with more details and a ranking.

I wonder why rates in Louisiana are so high. $2,500 per year? Is it fear of flooding? Laws that encourage suing other drivers?

From the site: “Rates were calculated for more than 2,400 vehicles for model year 2010; based on a 40-year-old single male driver who commutes 12 miles to work; includes $500 deductible on collision and comprehensive coverage.” I wish they also shared how much liability coverage they chose, as that is the largest component of my premium.

The US Department of Labor estimates that about 1 in 7 claims to employer health insurance plans are initially denied. A patient advocate says that she wins 80% of appeals. Yet only 4% of denials are appealed. These stats are taken from the AARP article The Health Claim Game. Are insurance companies relying on the “hassle factor” to help their bottom line? (…reminds me of The Incredibles and Insuricare)

Whether you think so or not, dealing with health insurance claims can be a nightmare. At the end of this article, a handy flowchart is provided which walks you through the “claim game”. Here’s the text:

To Make Insurers Pay

WHEN YOUR CLAIM IS DENIED…

1. Don’t pay the bill.
2. Get a reason for the denial in writing.
3. Review and follow your plan’s rules.

…Make the easy fixes…
• Missing information? Fill it in.
• Coding mistake? Have your doctor fix it.

…And assess other reasons for the denial.
Health care reformers want to end these exceptions, but for now they are hard to overcome:
• Preexisting condition
• Lifetime-benefit cap
• Change of employer, so coverage was delayed

These may be worth challenging:
• No network facility or physician was available
• Drug wasn’t FDA-approved for your illness
• Treatment was deemed unnecessary or unproven

WHEN PREPARING AN APPEAL…

1. Check the back of your denial notice to see how long you have to file—it’s usually 180 days.
2. Gather objective evidence of medical necessity, such as test results and prior failed treatments.
3. Gather journal articles showing the treatment is safe, effective.
4. File the request in writing (certified mail, return receipt).

IF YOU WANT HELP, SEEK OUT…

• A nonprofit patient advocate (your state’s insurance regulator or a disease association can suggest names)
• A lawyer if there’s a large sum of money at stake and you might end up in court.

IF YOUR INSURER STANDS FIRM, YOU CAN SEEK AN INDEPENDENT REVIEW…

If yours is a fully insured plan—that is, the insurer pays the claims. (Though insurers administer all kinds of health plans, roughly half are self-funded, meaning your employer pays the claims.) You have a fully insured policy if you buy insurance on your own.

To appeal a final rejection by a fully insured plan…
Go to your state insurance regulator.

To appeal a final rejection by a self-funded plan…
You will likely need to go to court, though your state insurance regulator can sometimes jawbone on your behalf.

The article also mentions a few potentially helpful groups to ask for further assistance – the Medicare Rights Center, the Patient Advocate Foundation, and Advocacy for Patients with Chronic Illness.

After reading about the recent flooding in the Nashville area, I again find myself reminding people to consider optional flood insurance. First, some background. Most homes that are in 100-year flood plains are required to buy flood insurance. This is because the banks know that this designation means that you have a 26% chance of a 100-year level flood within a 30 year span.

However, even if you are outside these areas, you may still be in danger of a serious flood. Often these areas are shown on flood maps as 500-year flood plains. Many people read this and think something like “…last flood was in 1909, we’re good for another 400 years!” Actually, having a 0.2% chance of a flood each and every year works out to a 6% chance of occurring at least once over a span of 30 years, or 1-in-17. According to an article from from CNM News:

The flooding in Nashville has been deemed a “500 year” flood, as the Cumberland River rose to over 51 feet (floods occur at 40 feet). The flood waters took over portions of Downtown Nashville, as well as the Opryland area.

What if it happens to you? Most homeowner’s insurance policies don’t cover flood damage. More from BusinessInsurance.com:

The National Flood Insurance Program, which is run by the Federal Emergency Management Agency, may cover some losses experienced by businesses and homeowners that purchased the coverage. However, Mr. Costner and other insurance experts said flooding reached areas that are not federally designated flood zones. According to FEMA, Nashville and Davidson County, Tenn., had 4,100 NFIP policies in force as of March.

All of Nashville only had 4,100 policies? This means that not very many people were even required to buy it. This USA Today piece tells the stories of several riverfront homes that weren’t covered.

Tiffany Wiggers says she doesn’t have flood insurance and, in fact, she paid $15,000 extra to be closer to the river. “Everybody on this side of the street, we paid lot premiums to be near the river: $15,000. You have to laugh to keep from crying,” […] She says she and her husband questioned the real estate agent, builder, lender and an insurance agent about flood insurance, but all said it wasn’t necessary. “They all said, ‘You’re not in a flood plain, so you don’t need it,’ ” recalled Wiggers for USA Today, who was taken from her home via rescue boat. “I was like, ‘FEMA and the bank said we won’t need it, so we’re in the clear.’

If you haven’t already, take some time and check if you are in a flood plain here. But it could be that the any flood maps are outdated or inaccurate. Add in some common sense if you are near a body of water. In the end, you may consider buying flood insurance even if you are not required to by your mortgage lender. We carry a modest amount of optional building coverage from the NFIP.

Argh… they got me. I usually filter out PR emails, but I went ahead and took the Insurance Intelligence Quiz by the National Association of Insurance Commissioners (NAIC). According to them, a recent survey found Americans only answered an average of 4 out of 10 questions correctly. The quiz turned out to be reasonably quick and the questions weren’t horrible, so I figured I’d share it for the semi-competitive folks out there that want to test their insurance knowledge.

Quiz Spoilers below…

I ended up getting 8 out of 10 correct. I did not know that auto insurance was not required in all 50 states. Well, technically not required in New Hampshire and Wisconsin. I found this information from Carinsurance.com:

New Hampshire state law does not require minimum auto insurance coverage. However, if you are at-fault in an accident without having insurance coverage you will be required to get car insurance. In this state it is advised that if you own a vehicle you get at least some type of bodily injury coverage, in addition to $25,000 worth of property damage.

Many people believe that Wisconsin does not require insurance, which is true however you must have other means to pay for damages you cause if you are at fault in an accident.

Wisconsin has a financial responsibility law that pertains to any motorist licensed to drive in Wisconsin. This law is designed to make sure anyone operating a vehicle has insurance or enough money to pay for damages to others that may have been caused by a motor vehicle. These requirements may be met through an automobile liability insurance policy, a surety bond, personal funds or a certificate of self-insurance.

I also missed the 100/300/100 question, which is bodily(per person)/bodily(total cap)/property damage. This is a quick way to check up on how much your insurance covers in the even of an accident. I used to think my insurance was pretty cheap, only to find out it was because my coverage limits were near the state minimum.