I was the first person in my family to go to college, and I was attending a reasonably prestigious university far enough away from home that it wasn’t feasible to go back with any regularity. I knew no one at all when I moved into my dorm room.

That first year in particular was full of discoveries. I had read quite a lot about the realities of college life before going, but so many things were unexpected and didn’t quite match what I had discovered from my reading.

Perhaps the biggest surprise of all was the hidden costs. It didn’t take me long to seek out a part-time job because of all of the hidden costs that came along. Here were four that really took me by surprise.

Unexpected Class Expenses
Most professors are sympathetic with the poor college student and will therefore use only one textbook for their class. Others, like a few of my own that shall remain nameless, will have a long list of requirements for the class.

I’ve been in classes with more than ten required books. I’ve been in classes where we had to buy a bunch of lab equipment. I was in one class where a $500 piece of software wasn’t “required,” but if you didn’t have it, you had to spend many, many hours in this one computer lab with limited hours of availability on a remote corner of campus.

The textbooks are expected. Some of the additional expenses are not.

Health Insurance
Health insurance is the last thing most college students are thinking about when they head out the door to school. Eventually, though, you will get sick. Dormitories are breeding grounds for germs and with all of the human interaction going on at colleges, illnesses get passed around.

Many students are lucky enough to be covered by their parents’ health insurance. For those who are not so lucky, there are really two options.

One, you can see if your university provides a health plan. If that’s the case, this is usually the lowest-cost option. Most of the time, if you have a health plan through your school, you gain access to some form of on-campus health service, which will help you with most minor ailments without any charge, and they’ll refer you to other health services as needed. The premiums for this are usually quite low and are often paid directly to the university.

If that doesn’t fit, you can get individual health insurance. Provided you’re in good health, this can also be pretty inexpensive and will usually open up access to off-campus doctors and medical resources. If you go this route, shop around. Most schools will provide you with a list of recommended student health insurance providers.

Make sure your health is covered before you go. The last thing you need during your first finals week is a serious illness that makes you dizzy if you climb out of bed. (I speak from experience here.)

Learning Experiences
If you’re involved at college, you’ll eventually join clubs and organizations that match your passions (and possibly improve your resume). Those clubs might have small membership fees, which aren’t a big deal.

What is a big deal is when those groups lead to learning experiences: trips, activities, and other things that have a big additional cost to the participant.

I found myself in a club that took a trip to South America for volunteer work. Most of the club went. I did not. Another club I was in went on a long road trip over spring break to visit some research stations. I couldn’t afford to go.

Involved students will eventually bump up against the cost of extra learning experiences that go far beyond tuition.

Late Night Food
This was a big unexpected expense for me. Like many college students, I was often up very late doing social activities or finishing up homework. On the weekends, it was not uncommon to stay up until three in the morning and then wake up at ten or eleven in the morning.

Since the food service at my school stopped serving at 6:30 PM, that meant that by midnight or one in the morning, I was getting hungry. I was definitely not alone in this. Many pizza places in the town catered to us.

There were many, many weekend pizzas delivered to various groups on campus. I might go in four ways with someone on a pizza, but that meant $5 was immediately gone. Do that once or twice a weekend over a semester and you’re talking well over $100.

I truly believed food service would cover all of my food needs when I went to school, but it just really didn’t work out that way. There were many times when I was quite hungry and ready to eat when the delivery places had closed up shop.

College is subtly expensive in many different ways. Saving for tuition, room, and board is a good start, but having some additional funds on hand will really help maximize that experience.

The post Four Hidden Costs of College appeared first on The Simple Dollar.

Feel free to share your experiences in the comments, or reach out to the writers via their contact info.

-Trent
___________________________

Medicare kicked in for me in February of 2012. Among the exhaustive research I did at that time was to choose a provider for Part D, my prescription drug coverage. Because I have more than one chronic illness, I have a long list of medications; my primary goal in choosing a Part D provider was to find the most exhaustive formulary I could afford.

I understood at the time that the provisions of all Part D plans allowed for a coverage gap, commonly referred to as ‘the donut hole’ for reasons that remain unclear to me. The donut hole isn’t a tasty little tidbit of something sugary and sprinkled – it’s when your prescription coverage drops precipitously once your Part D provider reaches a certain threshold of spending.

The donut hole isn’t a tasty little tidbit of something sugary and sprinkled – it’s when your prescription coverage drops precipitously once your Part D provider reaches a certain threshold of spending.

I understood, back in February, that a day might come when my meds suddenly got more expensive. Chronic illness, however, can be time-consuming, as can wrangling three teenagers who are determined to drive me to the nuthouse. I conveniently forgot about donuts and their holes and carried on about my business.

In December, in the midst of portioning out my fixed income for a pile of small, expensive electronics, designer makeup and clothing my daughters claimed were utter necessities, I dropped by the pharmacy to pick up my monthly ration of pain medication. During a month when I typically forego things like eating in order to buy holiday gifts – a $36 prescription was suddenly ringing up at $454.00. The timing was ugly.

I am a chronic pain patient, and am what’s known as opiod-tolerant. This means that standard pain meds don’t work for me – I require specialty drugs that are not cheap. This also means that my pain level without these drugs leaves me unable to function. Writhing uselessly on the sofa for the duration of the holidays was not an option. I forked over $454.00.

Furiously logging into my insurance account did not, in fact, reveal a way for me to submit a claim for reimbursement. It revealed the fine print that I’d conveniently ignored. All of my prescriptions for the rest of December cost me hundreds more than I normally paid, because I’d reached the coverage gap in my insurance. Had I paid attention to the details, I’d have planned for this expense. Instead, I was sideswiped by massive added expenses at the worst possible time of the year. Ultimately, this mistake cost me $1,362.

The nitty-gritty details: in my case, coinsurance for prescription cost $5 per month for approved generics, $36 for approved brand name drugs and a max of $68 for “select approved drugs,” all of which were clearly listed in the plan formulary. When I reached the plan’s expense ceiling (which looked nothing like a donut) things changed drastically.

Medicare Part D is arranged into three tiers that reset each calendar year.

• Tier 1 is the first part of your coverage, where the plan pays the bulk of your cost and you pay coinsurance. This lasts until your reach a predetermined coverage limit. In my case, the limit was $2,930.
• Tier 2 is the coverage gap. Under current law, this means that your provider can drastically reduce your coverage after you’ve reached their spending ceiling. Depending on the details of your plan, you remain in Tier 2 until a prescribed amount is spent. For me, Tier 2 means that I am responsible for 50% of the cost of all brand name and approved drugs. This ends when the plan and I each spend about $4,000.
• Tier 3 offers very good coverage, which is a relief because thousands of your out-of-pocket dollars must be spent before you can get there. My plan pays almost the entire cost of any medications once I reach Tier 3.

There is good news. Part D tiers reset in January of every year; I can count myself lucky that I didn’t fall into Tier 2 until December. And in even bigger news, the Affordable Care Act is taking aim at the donut hole. Gaps in coverage that leave consumers responsible for the bulk of their prescription costs are being closed a little bit each year; Obamacare plans to completely remove Part D coverage gaps by 2020.

for any Medicare Part D users, or anyone with an insurance plan that places limitations on prescription coverage: know your plan

The moral of the story for any Medicare Part D users, or anyone with an insurance plan that places limitations on prescription coverage: know your plan, particularly if you have ongoing medication needs. Researching Medicare options is mind-boggling, and the temptation to walk away from it all once you’ve selected your options may be strong. To avoid a nasty surprise, you need to educate yourself about the details of your coverage.

The post A Health Insurance Disaster: Falling Down the Medicare Donut Hole appeared first on The Simple Dollar.

Update: With the passage of the Affordable Care Act, there are improved options if you have been denied coverage — in addition to my suggestions below, review the post to see how you can obtain health insurance.

On Facebook, Elisabeth asked for information on “appealing health insurance denials of coverage.”

Health insurance companies don’t make money by paying for people’s medical bills (even though that’s why we hire them), so whenever there’s a case where they can see an easy way to deny it, they’ll do so. It makes sense for them as a business, even if it’s frustrating for us as people who need health care.

There’s a simple maxim to always follow when dealing with insurance companies, though: “the squeaky wheel gets the grease.” If it’s clear to them that you’re involved and have some idea of what you’re doing, you’re much more likely to get a resolution that you want.

Step 1: Know Your Situation
The first step is always to get all of your facts straight. You need to know some of the ins and outs of your health insurance plan as well as have thorough documentation of the care you received. Here are some questions to help you along that path.

+ What exactly is covered in your plan? What part of your plan matches up with the care you received?
+ Do you need a referral from your primary care physician for the type of care you received? Did you have that referral?
+ Is it required that the doctor you received care from be a member of the provider network covered by your policy?
+ Does your plan require prior authorization for the type of service you received? Did you get prior authorization from your insurance company (or did your doctor get it)?

Document all of these things with dates and as much information as you can gather. Have your facts straight before you even begin chasing down an appeal.

Step 2: Use Denials as a Clue, Not as a Stop Sign
If you’re denied, look for the reason for which the denial was issued. Your task is to cover that reason as clearly as possible – and you should acquire the needed information before you appeal. Depending on the reason for the denial, here are some steps you might want to take.

+ Ensure that your physician agrees that the procedure you were denied for was medically necessary, and get that in writing if at all possible.
+ If the insurer calls your procedure experimental, gather as much evidence in favor of it as you can.
+ If the insurer says that the procedure wasn’t explicitly covered, find evidence of similar procedures that are covered in your plan and ask your doctor for assistance in demonstrating the need for the procedure you had.

Step 3: Your Doctor Is Your Ally
A big theme you’ll see in the first two steps is that you’ll probably need some help from your doctor in this process, often in the form of documentation. Your doctor is going to be your ally here and you must keep that in mind through this process.

Be patient with your doctor. Don’t get angry with the doctor or the doctor’s staff. Do what you can to make it as easy as possible for them to help you with what you need. Honey works much better than vinegar in cases like this, so don’t give into your frustration and don’t get angry with your number one helper in this process (even if they seem uncooperative at times). The staff of many doctor’s offices are overburdened with requests, and one sure way to get your request overlooked is to act angry and self-righteous.

Step 4: Make an Appeal
Medical insurance companies have a formal appeals process which should be covered in your insurance documentation. Read through the documentation and understand it. It will be dry reading, I know, but the more you know about the process, the more likely it is that you’ll find success.

When you write your appeal, make all of the important details clear. Cover your health problems, particularly your full recent history with the problem in question. Discuss alternatives you’ve tried and exhausted. Mention what your physician recommended, particularly comments that counterbalance the reason your claim was denied. Outline why you were an ideal candidate for this procedure (which will probably take some research into the procedure). Discuss what will happen without the treatment.

You should also have supporting evidence. This is where research and time will come in handy. Quotes from your medical records are valuable. Direct quotes from your doctor are also valuable. Quotes from the insurance plan are incredibly valuable if they clearly support your case.

Provide as much documentation as you can for all of this evidence. Dates. Page numbers. Photocopies. You’re far better providing too much detail than not enough detail.

You should also keep a detailed log of all contact with the insurance company. Note what number you called, when you called it, who you spoke with, and what was discussed. You should also record all documentation you sent and when you sent it, as well as all mail you received from them. This may come in handy at a later time.

Most important, keep a full copy of every single piece of documentation that you send to the insurance company. Keep photocopies of the forms, of the records you sent them, and of every bit of your appeal. You may need these later on in the process. In fact, you should only be sending them copies of records and you should keep the originals for yourself.

Step 5: Get Free Assistance
Many states offer excellent help for people handling medical insurance denials through their state Department of Insurance. To find your state’s Department of Insurance, just use Google and type in “Department of Insurance” followed by your state.

Many states have a hotline you can call for assistance during this appeals process. Depending on the state, the information might be basic (providing simply information about the approximate timeline of the process) or it might be extensive (actually helping you with the appeal). They’re also equipped to handle any specific issues due to the state in which you reside.

In either case, it’s an assistance worth looking into if you find yourself in an appeal situation.

Another useful resource for insurance appeals is the Patient Advocate Foundation, which is another great resource for free assistance with medical appeals. You can simply fill out this form and assistance will contact you.

Step 6: Is a Lawyer Appropriate?
If your appeal is denied but you feel you’ve made a truly strong case, you may want to get legal help involved, particularly if the costs of the denial far outweigh the legal costs. Have a lawyer with experience in medical appeals review all of the documentation you’ve collected and determine if you have a case.

It is important to note that we all see our own situation through rose-colored glasses. A good lawyer will want to defend your rights and help you get the money you deserve, but if your case is weak, a good lawyer will say so. Remember, they’re financially ahead if they take on your case (particularly if they win), so if they’re telling you it’s not a good case, it probably isn’t.

The post Tactics for Appealing Health Insurance Denials appeared first on The Simple Dollar.

Her employer made it possible for her to return to her previous position when her leave period ended, which was very gracious of them. Of course, that left us with a period of eight months without health insurance coverage if we did not pay out of pocket.

During that period, my income and our savings paid for our health insurance out of pocket. My wife was able to enjoy a period of staying at home with the children – and it was quite enjoyable for all of us. Our oldest child attended morning preschool and our three year old attended thrice-a-week morning preschool, but aside from that, the five of us were at home. My wife spent time with the kids and I split my time as best I could between work and spending time with all of them.

At the end of that period, my wife chose to return to work, not because we needed her income or her health insurance coverage, but because she missed the joy that she gets from her work.

During that period, the health insurance was a serious expense. If it were not for our living expenses being as low as reasonably possible and having a very healthy emergency fund, we would have really struggled to make this work. As it turned out, the reality of that period showed us that we could have done it for a few years, but my wife wanted to return to work at that point, making the question moot.

A more detailed explanation of the affect downgrading your job has on your health insurance exists in The Simple Dollar’s Guide to Health Insurance, but I’ll briefly go over the main points here:

1. Plan ahead for your health care needs. Where are you going to get health insurance from if you make a major career change? This needs to be one of the first things you think about, and it becomes more urgent the older you are.

2. A married couple only needs one person with insurance. Self-employment is much more difficult if you’re single because you don’t have a spouse’s insurance to rely on. It’s perhaps not fair (I don’t believe it is, but I don’t have a better idea that doesn’t involve a great deal of government interference), but it’s simply the fact of the situation. If you’re single, self-employment means that you have to come up with your own insurance. If you’re married, you can rely on your partner’s insurance (assuming they have them).

3. Never, ever burn bridges. When you make that leap, you may find that you wish to return to your previous career path if the new path doesn’t work out. Never, ever burn your bridges on the way out the door. Do everything you can to make the transition as smooth as possible and leave with good relationships with everyone. While this won’t mean you’ll get your old job back if things don’t work out, it does mean it’ll be easier for you to return to that career path if you need to. That’s a great hedge if you find out that health insurance isn’t working out.

4. COBRA can really be your friend. COBRA isn’t just G.I. Joe’s nemesis. It’s a federal law that, if you worked for an employer with more than 20 employees, ensures that if you quit your job, you can continue your current health insurance plan for up to eighteen months if you pay the premiums out of pocket. That can be incredibly valuable for a potential entrepreneur.

5. A healthy savings account is absolutely vital. Of course, the key is that you will have to pay premiums out of pocket under COBRA. That can be quite expensive, so the best route to take is to make sure you have enough money saved to cover that insurance for you and your family if you do downgrade your job. Know how much your total premiums actually are and plan for paying for that amount out of pocket. The passage of the Affordable Care Act has opened up other savings accounts: health savings accounts (HSAs).

Obviously, you can shop around for your own insurance and you may be able to find a better package than what you’re able to get through COBRA, but in either case, your savings is vital. It can make the difference between having health care insurance and not having it, and that can make the difference between success and failure.

6. SCHIP and Medicaid are also potentially vital. Both of these plans offer health insurance for low income folks, particularly children. I won’t get into the details of these programs, but if you see a major downward change in your employment coming in the future, you’ll want to know more about these plans.

The key, as always, is to be proactive. Such programs won’t magically appear on your doorstep. You have to be proactive and seek out such solutions. It might take a lot of phone calls, a lot of emails, and a lot of time to find out the details about such programs, but it’s far better to invest that time and effort now and ensure your coverage than to go without.

A final note on the future As I write this, the future of national health insurance in the United States is up in the air. While I am unsure about the specific provisions of the Patient Protection and Affordable Care Act (often termed “Obamacare”), I do think that some form of universal access to health care rather than the piecemeal system we have now would be very beneficial to everyone involved. It would allow entrepreneurs to jump into business plans that they might have otherwise avoided. It would also allow manufacturers to be competitive with overseas manufacturers who do not have to shoulder health care for their employees. While I’m not a politician who has to balance the beliefs and voices of a very wide political spectrum (and I’m glad of that), I do think that everyone – rich and poor – benefits if we work on finding a good solution to the health care problem rather than bickering and fighting and name-calling.

If you want to jump into self-employment or downgrade your job, let your congressperson know that you’re a potential entrepreneur in his/her district that would find starting a small business much easier if there was a palatable solution for health care that makes entrepreneurship easier and more accessible to everyone. There’s money to be made there for everyone involved – the entrepreneur and the health care provider.

The post Health Insurance and Downgrading Your Job appeared first on The Simple Dollar.

How small? It’s a question that’s almost impossible to research. Almost all of the data out there on the topic was produced by the insurance companies themselves, meaning that I have to read them with a very skeptical eye.

For example, the American Council of Life Insurers claims that one third of all Americans between the ages of 35 and 65 will become disabled for more than 90 days. Intuitively, this seems like an incredibly high number, and because of the source, I have a very high degree of skepticism about that number.

Another scary industry statistic comes from the Health Insurance Association of America, who claim that 1 in 7 people can expect to be disabled for five years or more. Again, this number seems very high to me and could only be even remotely reasonable with the widest possible definition of disability.

The only real statistics I’ve seen on the subject come from the Census Bureau, which report that about 20% of Americans meet their definition of disabled, but only 23% of those disabled people actually qualify for disability benefits. Why? The vast majority of disabilities that the Census Bureau considers to be disabilities are ones that people work through – vision impairment, hearing impairment, and mobility impairment are all considered disabilities, but are ones that strong and self-motivated people can work through.

The obvious solution – the one that most Americans wind up following – is to just say forget it, believing that the risk is too minimal to bother with – and I can understand that conclusion. I know that’s the assumption I’ve operated on throughout my adult life to this point, and I’m willing to bet that it’s the assumption that many of you have operated on as well. However, as five cent nickel puts it, it makes sense to insure what you cannot afford.

The first question thus becomes could I afford the consequences of not having long term disability insurance? A quick examination of my finances says yes – but only over a fairly short term. We’d be fine over the course of a year to eighteen months. Beyond that, things would get very difficult for my family.

Next question: does my employer provide long term disability insurance? Right now, I am self-employed, so I don’t have the benefit of employer coverage. My wife does have this benefit, which would replace 60% of her salary 60 days after a disabling accident, so she’s covered. That still leaves me out in the dark, though.

Given those two questions and the thought process behind them, what I actually need is pretty clear. I need a policy that kicks in in six months to a year after a disabling incident and covers enough income that my family is able to get by, and I only need the insurance over the timeframe that I would actually need it – probably until at least my children are moved out. My impression from these criteria is that the cost of insurance would be quite low.

The next step is to get quotes on this insurance, and this is the step where I’m at. Most large insurance groups offer long term disability insurance and I’ve requested information and quotes from several such groups, including the group that handles my life insurance.

Come on… is this really worth it? This thought has crossed my mind regularly throughout this process, likely because long term disability insurance seems to be an uncommon thing outside of a job benefits package.

Any insurance you buy is a personal risk-reward analysis. Any time you choose not to insure something, you’re taking on some amount of risk. Insurance eliminates (or vastly reduces) that risk. Life insurance? The risk is the loss in income to your family if you were to pass on. Health insurance? The risk is high health care costs, especially for complex procedures. Auto insurance? Homeowners insurance? Renter’s insurance? They all insure your property against unknown disaster.

Long term disability is another risk you can insure against. If you judge the risk (long term disability where you survive but are unable to work) as being smaller than the cost (the monthly or annual premiums), then you’ll probably not take any out, but that balance is different for everyone.

For me, I’m leaning strongly towards acquiring insurance for a very long term severe disability. I can afford it, and knowing that my family would be secure if something rendered me incapable of writing is very reassuring – a risk and reward balance well worth it for me. Learn more about the ins and outs with site contributor Jennifer McCarthy’s guide to health insurance here.

What’s your take on long term disability insurance?

The post Do I Need Long Term Disability Insurance? appeared first on The Simple Dollar.

Over the last few months, I’ve received many, many emails from people thinking about a career change, usually towards starting their own business. In most cases, they’re not too worried about the money aspect – they tend to be much more concerned about health insurance.

Health insurance is the 800 pound gorilla in the room for decisions like these. For some, the risk of devastating illness or injury isn’t worth it and they try to stick with their primary job while building the business on the side. Others believe in the adage of you only live once and go for the gusto. Here’s the argument for both sides.

No, Don’t Abandon Health Insurance

Your personal health is your most valuable asset. A healthy body and mind enable you to get up in the morning and go through your tasks for the day and enjoy your life. Health insurance is your safest bet for making sure that you’ll continue to enjoy good health, by taking most of the financial burden for medical care off your shoulders.

Furthermore, if you have children or other people depending on your health and continued ability to earn money, a severe medical crisis without health insurance can utterly devastate your family. Health insurance enables an unexpected situation, like a serious illness or a car accident, to not completely transform the way of life of your family in a negative fashion.

If you value your own health and have a sense of responsibility to others, health insurance is a must. Don’t take the leap into an area without health insurance. That doesn’t mean you can’t investigate other options, like COBRA or self-insurance, but you shouldn’t take the leap into the unknown without a safety net if others are relying on you.

Yes, Go For The Gold!

When a truly great opportunity comes along in your life, one that fills you with joy and passion and drive, you should never let it pass by. Sure, there may be risks – and one of them may be a period without health insurance – but the sense of personal fulfillment and accomplishment and the possibility of great successes more than makes up for it.

First, the opportunity to do something with your life that fills you with excitement and energy is something rare and beautiful, and if there’s any way to take it without throwing away your most important responsibilities to others, you should always jump on board. A fulfilled life is a great life, and doing something that fulfills you can completely transform your life. Plus, when you let that opportunity pass, you’re bound for a great deal of regret.

Even more importantly, doing something you’re truly passionate about holds a far greater chance for success than doing the same old thing. If you take that leap, you have a chance to do something truly great with your life, something transformative. If you have that chance to do something amazing, you shouldn’t let it slip by because of a temporary lapse in health insurance.

Obviously, if you have the opportunity, use programs like COBRA and self-insurance to acquire health insurance, but don’t let a period without insurance cause you to not take the leap for your dreams. The risk of a major incident over a short period is much less than the continued pain of a great opportunity left untaken.

My Take

If you’re single, have no one relying on you, and are in reasonably good health, I say go for it. You aren’t responsible for the lives of others, only your own, and if it’s an opportunity you’re passionate about and believe in, it’s a path you should always take. If you don’t, you’ll regret it for a very long time, likely the rest of your life.

On the other hand, if you’re in poor health and have children to support, stick with the safety net. Those children depend on you, and if you were to fall into a dangerous health situation, they would suffer as well. The future of a child is not something one should play ball with – a childhood should be filled with relative safety, positive reinforcement, and opportunities for growth, not with the apocalyptic situation that a severe illness of a parent without health care would bring.

If you’re really on the fence about it, though, you should probably make the leap, provided your bases are as covered as you can make them. When a great opportunity passes you by and you make the “safe” choice, you’re often left with only one thing: a belly full of regret.

What’s your take?

The post Should I Go Without Health Insurance For A Better Career Situation? appeared first on The Simple Dollar.