smart spending

6-part personal bailout plan

If you're a veteran or have a VA loan, you can get some help from the U.S. Department of Veterans Affairs which can negotiate with your loan servicers to set up a workable arrangement. For vets with non-VA loans, the department can't negotiate directly but will coach homeowners in who to contact and what to say to get what they need, says Steve Westerfeld, spokesman for the U.S. Department of Veterans Affairs. Call: (877) 827-3702. All services are free of charge.

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Health insurance

  • For kids only: Investigate the State Children's Health Insurance Program, or SCHIP. Administered by the states, it's a federal program that provides low-cost insurance for children. Find out more by contacting your state insurance department.
  • No insurance: Consider a high-deductible, "catastrophic" policy with a health savings account, or HSA. How it works: You purchase a plan with very high deductible but low premiums. It is paired with a savings account that allows you to bank pre-tax dollars to use for your deductible or other qualified health expenses. If you don't use the money, it stays in your account for whenever you need it.

    Caveat: Not all high-deductible plans are equal. And not all low-premium plans offer the same coverage. Read the fine print and have the agent answer all of your questions before you buy. Browse some options at InsureMe.com (a Bankrate company).
  • Denied coverage: First, find out why you've been denied. If there was erroneous information on your medical records (or even correct information that only tells part of the story), getting the records amended could solve the problem. Discuss the problem with your doctor or the insurance administrator at your doctor's office to identify any possible misinformation in your file. Georgetown University's Center on Medical rights and Privacy maintains a Web site that will help you correct your records. You can also try a different carrier that may have more lenient underwriting regarding your condition. If you were denied because of serious health problems, consider buying coverage through a spouse's group health plan. While you pay all or part of the premium, it's usually cheaper and you can't be denied coverage. Alternatively, investigate your state's high-risk pool. Set up for people who can't get conventional insurance (and in some areas subsidized by the insurance industry), this will allow you to get coverage without excluding your health problems or paying exorbitant premiums.

    Caveat: It's not super cheap and, in some states, pools are closed or having waiting lists. Visit your state insurance department or call for details.
  • Don't have insurance due to job loss: If a spouse's plan is not an option, take another look at your former employer's group plan. Thanks to the stimulus plan, this option just became 65 percent less expensive, and you may have a chance at enrolling.

How this works: the Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows you to stay on your company insurance, generally for up to nine months, as long as you pay 35 percent of the premiums. Prior to the economic stimulus package, employees had to sign up to remain on the group health plan within roughly 60 days of leaving the company and shoulder the full cost of the premiums. Therefore, if you took advantage of COBRA, you should see your premium drop 65 percent starting in March. If you were dismissed after Sept. 1, 2008 and didn't take COBRA coverage, you have another chance. Moreover, your premiums will reflect the new 65 percent discount. Government agencies are still ironing out just how long workers who initially passed on COBRA will have to apply, so to be safe, get your paperwork in place within 60 days of the stimulus bill's Feb. 17 signing date.

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