Monthly Archives

October 2014

Short-term health plans grow as cheap alternative to ObamaCare

By | Health Insurance

Exerpt from article by By Maxim Lott , Published October 29, 2014, FoxNews.com

A fast-growing, short-term alternative to ObamaCare that allows customers to get cheap, one-year policies could put the government-subsidized plan into a death spiral.

The plans, the only ones allowed for sale outside of ObamaCare exchanges, generally cost less than half of what similar ObamaCare policies cost, and are increasing in popularity as uninsured Americans grapple with the requirements of the Affordable Care Act. The catch — that the policies only last for a year — is not much of a deterrent, given that customers can sign up for ObamaCare during open-enrollment periods if their short-term coverage is not renewed.

ObamaCare Frustration“Applications rose 30 percent compared to last year,” eHealthInsurance.com Enrollment Specialist Carrie McLean told FoxNews.com.

Other providers said they also see rapid growth in the plans, which have a typical monthly premium of just over $100, compared to traditional plans that cost an average of $271.

“It’s because the product is typically half the cost of ACA plans, and you can chose any doctor or hospital,” Health Insurance Innovations CEO Mike Kosloske told FoxNews.com.

“It’s because the product is typically half the cost of ACA plans, and you can chose any doctor or hospital.”

– Health Insurance Innovations CEO Mike Kosloske

As long as customers stay healthy, they can renew the short-term plans. If patients get sick while covered, the plans provide for their care until the end of the term, when customers can be declined. But such plans can work well with ObamaCare, because if stricken policyholders can still buy insurance through the Affordable Care Act, where insurers must charge sick and healthy people the same rate.

 

The End of Obamacare Subsidies?

By | Health Insurance, Health Reform

New language in some contracts for health insurance companies looking to sell coverage through the Obamacare exchanges has observers questioning if tax subsidies for plan enrollees is going away.

The new language says insurers can drop their exchange plan if the federal tax subsidies currently being challenged in court are found to be illegal. According to some reports, insurers had asked for the new language in light of the possibility that customers may not be able to afford plans without tax subsidies from the federal government.Insurance agent at computer

Over 85 percent of people who get their insurance through Obamacare do so with the help of subsidies. Also, many low-income enrollees receive cost-sharing reduction payments, which are used to help pay for co-pays and other medical expenses.

Writing for Forbes – Michael Cannon, director of health policy studies at the Cato Institute, said the language in the new contracts is the first sign that those who stand to benefit from Obamacare are worried about the subsidies being struck down.

“This is the first indication ObamaCare supporters are worried the (subsidies-challenging) cases could actually succeed,” Cannon wrote.

Keeping Your Information Current

If courts do rule in favor of keeping the subsidies, enrollees need to make sure that they are keeping their income and family status current with the Obamacare marketplace.

This means that if an enrollee starts to make more or less money than they estimated when applying for a marketplace plan, they need to report the change. Also, if a family welcomes a new child – they should report this to the marketplace as the additional family member goes into factoring the amount of subsidies.

An incorrect income estimate could lead to two distinct situations. First, an estimate that is too high could result in a subsidy that is too small to help pay for coverage. Second, an estimate that is too low could result in having to pay back part of or the entire tax subsidy, if income at the end of the year ends up being over 400 percent of the federal poverty level.

How changes might be handled during the upcoming enrollment period may vary based on where an enrollee purchased their plan. Those in states where the federal government runs the exchange, like Alaska and Texas, will have their plans reenrolled automatically if they do nothing. This means that the subsidy-relevant information from 2014 will be used again for 2015.

In some states where the state runs the marketplace, enrollees might have to select a new plan and update their subsidy eligibility information.

With all the uncertainty swirling around subsidies and relevant information, it might be a good idea to talk to us at Health-Life-Dental-Insurance We will discuss contingency plans for those worried about the future of Obamacare.