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July 09, 2007

Medical expenses can shatter security

Retirement for Ellen Warwick isn't shaping up as she had planned. Warwick, 62, and her husband, 72, quit their jobs in California three years ago and moved to Noblesville. They thought they'd travel when they weren't spending time with their two grandchildren in Indiana.

Instead, they allocate much of their money to health care.
"We do travel some," Warwick said. "But I had dreams and thoughts about going to Europe and traveling around the world, but we have to be careful.

Health-care expenses may stand in the way of a carefree retirement for many baby boomers, too. More than half of the people surveyed for The Star's poll cited coping with the rising cost of health care as a major worry for how they will weather retirement.
There's no secret to the best way to handle this dilemma. As with other areas of retirement planning, the answer, experts say, is to save, save, save.

The average 65-year-old couple retiring this year will need about $215,000 to cover medical costs, according to Fidelity Investments.
People should not expect Medicare to meet all their needs. Studies show that in the last two years of life, people spend an average of $11,000 out of pocket, said Susan Chen, an assistant professor of health economics at Purdue University.

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Posted by healthinsurance at 04:40 PM | Comments (0)

July 03, 2007

Health insurer cited in policy cancellations

BC Life & Health revoked 1,880 individual health insurance policies in California in 2004 and 2005, and a state agency that examined a sampling says it found that more than half the cases it reviewed were improperly handled.

The Department of Insurance said it studied 83 sample cases and issued citations in 49 of them, alleging 67 violations of fair-claims handling laws.

In one case, the department contended that BC Life, a Blue Cross company, told a policyholder in a letter that it rescinded coverage because of an undisclosed medical condition, even though the condition was clearly stated on the individual's application.

In another case, the department alleged that BC Life improperly rescinded a policy after miscalculating the period of time between treatment and the effective date of coverage. BC Life declined to reinstate coverage even after the department brought the error to its attention, according to a report issued by the agency.

When coverage is rescinded, it is as if the policy never existed, leaving the policyholder and healthcare providers to settle outstanding charges.

The 67 citations could lead to fines of as much as $10,000 per sustained infraction, as well as follow-up examinations.

The report was posted on the department's website last week with little fanfare, even though it had been highly anticipated by consumer advocates and lawyers for policyholders who were suing BC Life and other insurers, challenging the rescissions as unfair and illegal.

The Department of Insurance launched an investigation last year when John Garamendi, now lieutenant governor, was the commissioner. The report marks one of the first occasions on which Insurance Commissioner Steve Poizner, who took office in January, has publicly weighed in on a health insurance issue.

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Posted by healthinsurance at 12:18 AM | Comments (0)