Monthly Archives

February 2017

Trump’s IRS stages a stealth attack on Obamacare

By | Health Reform
President Donald Trump signing his executive order undermining the Affordable Care Act on Jan. 20. (Jim Watson / AFP/Getty Images)

President Donald Trump signing his executive order undermining the Affordable Care Act on Jan. 20. (Jim Watson / AFP/Getty Images)

The Internal Revenue Service has become the first agency to follow President Trump’s directive to start undermining the Affordable Care Act.

In a quiet rule change, but an important one, the IRS has told tax preparers and software firms that it won’t automatically reject tax returns that fail to state whether the tax filer had health insurance during the year. That effectively loosens enforcement of the ACA’s individual mandate. It appears to be a direct response to Trump’s Jan. 20 executive order requiring federal agencies “minimize…the economic and regulatory burdens of the Act.”

We observed at the time that the executive order would cripple ACA insurance exchanges, not only by signaling the Trump Administration’s open hostility to Obamacare, but by kicking a leg out from the regulatory stool supporting the act.

The IRS action its the first manifestation of that. The agency hasn’t announced its rule change publicly, but it was picked up by Peter Suderman of Reason and Kathleen Pender of the San Francisco Chronicle, who both reported it Tuesday.

In an emailed statement, the IRS said that it was acting in direct response to the executive order, which it said “directed federal agencies to exercise authority and discretion available to them to reduce potential burden. Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”

The ACA requires individuals to carry health insurance or pay a penalty of as much as $695 per adult and $347.50 per child under 18. Line 61 of IRS Form 1040 requires taxpayers either to check a box certifying that family members had coverage during the year, or to enter their penalty, which is calculated on a separate form.

Starting this year, the IRS was planning to reject returns automatically that left line 61 blank, known in agency parlance as “silent” returns. That would give taxpayers an early warning — for electronic filers, an almost instant warning — that they might be in violation of the individual mandate.

But early in February, the agency told tax-preparation firms that it was reversing the rule and would continue to accept returns that were blank on line 61. The agency didn’t announce its policy to the general public, but word spread rapidly in the tax-preparation community. Drake Software, which produces tax preparation software for accountants, posted a notice of the rule change on Feb. 9 and updated its program to allow for e-filing of client returns without filling in line 61.

Line 61 of Form 1040 requires taxpayers to declare their insurance coverage or calculate their penalty. (IRS)

Line 61 of Form 1040 requires taxpayers to declare their insurance coverage or calculate their penalty. (IRS)

The IRS statement notes that its rule change doesn’t alter taxpayers’ responsibility to obtain health insurance and pay any penalty for noncompliance:  “Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎.” The agency says that although silent returns won’t be automatically rejected, they may eventually be questioned by the agency and the penalty assessed. Drake Software advises its users to remind their clients that those leaving line 61 blank “could receive communication from the IRS, experience delayed refunds, and face subsequent collection activity to recoup the individual shared responsibility payment.”

The practical effect of the IRS rule change is impossible to gauge. Tax year 2016, for which the standard filing deadline is this coming April 18, is the first year for which the agency was planning to reject silent returns. Last year, according to the National Taxpayer Advocate, penalties averaging $452 were reported on 6.1 million returns, with another 12.2 million claiming exemptions from the mandate.

Confusion over Republican plans for the repeal of the Affordable Care Act already has roiled the individual insurance marketplace. Humana, which covers 150,000 ACA customers in 11 states, announced Tuesday that it would pull out of that market entirely next year. Aetna, which already had reduced its individual customer base to about 240,000 this year from 965,000 at the end of 2016, also has signaled that it may be entirely out of the market starting in 2018. Aetna cited the uncertainty about the market’s future coming from the Trump White House and the GOP-controlled Congress. Aetna and Humana had been planning to merge, but their deal was blocked by a federal judge in January.

Michael Hiltzik, LA Times

Let’s Make Health Insurance Legal Again

By | Health Reform

innovationLast month, Congress approved a budget that set in motion the plan to repeal the Affordable Care Act. Using an arcane Senate legislative rule called “budget reconciliation,” this allows repeal of enough of the ACA to bring it to its knees. But until and unless additional legislation is passed, the ACA’s regulations of health insurance will remain in place, and people will continue to suffer.

With the implementation of the Affordable Care Act in 2014 an effective ban on many forms of health insurance policies went into effect. Until then people were able to purchase any type of insurance policy that an insurance company was willing to sell them. Insurance companies were free to innovate and create new products.

For example, a new invention, “health status insurance,” was already sprouting up in the marketplace. This allowed people to insure themselves against the costs of developing a medical condition that would render them otherwise “uninsurable.” The ACA banned it.

This kind of ban stalled innovation that has been present in the insurance market since it first started. Insurance was developed in London in the 17th century, offering a way to spread the risks of unforeseen, unpredictable, highly costly events from an individual or business to the larger community. Insurers were able to design and actuarially calculate the price — based upon statistical risks — of an insurance policy to suit virtually any imaginable occurrence. The advent of the ACA, took many of these specialized policies off the table.

The ACA upended insurance companies as the designers of insurance plans. Instead, the government designed a “one-size-fits-all” plan. It uses a tax called the “individual mandate,” which penalizes people for buying any other kind of health insurance not deemed “ACA-compliant.” It eliminated the nascent “health status insurance” market by forcing all people to pay, through their premiums, for the coverage of people with costly pre-existing conditions.

The ACA ended the practice of premiums for individuals that was calculated depending on statistical risk. Now everyone must be charged the same, regardless of pre-existing conditions or risky behavior. This snuffed out in the crib any other new innovations in health insurance product design. The ACA even determined the times of the year that people can buy health insurance. Imagine if there was only a designated time of year one was legally allowed to buy and sell cars, computers or cellphones.

The ACA ended health insurance as we define it. In its place it put a government-designed health plan, administered by the insurance companies, that everyone is compelled to buy. It removed from insurance companies their definitive role of assessing risk and calculating individual premiums accordingly.

It changed the role of health insurance from that of spreading the cost of unforeseen, extremely expensive events to spreading the costs of everyday, totally predictable events. Health insurance companies were essentially transformed into money-transferring agencies.

Today people in 300 counties find there is only one insurance plan available on the individual market. But even if there were more than one plan, the choices are minimal. It’s reminiscent of the old days of airline regulation, in which the government determined the routes and the fares of the airlines, and their only differences pertained to the food and the amenities offered.

The 115th Congress is poised to take up the matter of repealing and replacing the Affordable Care Act. Repeal advocates say they want to make health insurance truly affordable and accessible to as many people as possible.

A good place to start would be to unchain the people and the insurers from the mandates and constraints imposed by the planners in Washington. Let people shop for insurance that suits their individual needs, and let insurance companies develop new products and compete for the people’s business.

Other critical reforms include breaking up the state-based insurance cartels by allowing health insurance consumers to shop across state lines. Congress should also give the people more control over when and how much to spend on health care through expanded tax-free Health Savings Accounts.

But we will never reach the goal of health insurance affordability and accessibility until we make innovative health insurance legal again.

Looking for innovative solutions to your health insurance needs?  Mark Deschenes will help you find the best solutions so that you and your family are properly protected while saving money.  Call today 800-257-1723 or click here now to schedule an appointment

  • Singer, an M.D., practices general surgery in Phoenix, Ariz., and is an adjunct scholar at the Cato Institute.

4 Changes That Might Be Coming to Your Health Insurance

By | Health Insurance, Health Reform

Now that Tom Price is HHS Secretary, what to expect in an Obamacare replacement plan

By Donna Rosato

The Senate confirmation of Tom Price to head the Department of Health and Human Services may provide the clearest look yet at the future of health insurance under the Trump administration.

As a Republican Congressman from Georgia, Price  was one of the strongest opponents of the Affordable Care Act, also known as “Obamacare.” And in 2015 he authored one of the most detailed plans, the Empowering Patients First Act, to repeal and replace the ACA, says Timothy Jost, a health policy expert and emeritus professor at Washington and Lee University School of Law in Lexington, Va.

But his proposal is just one of several alternatives put forward by the GOP, including one from Sen. Rand Paul (R-Ky.) and another joint proposal from Senators Bill Cassidy (R-La.) and Susan Collins (R-Maine). “There are a lot of commonalities in the plans we’re seeing, and I think those will be key elements of a final plan,” Jost says.

Many Americans are worried about their ability to afford health insurance, according to Consumer Reports’ new Consumer Voices Survey. It found that 55 percent of Americans are not sure that they or their loved ones will be able to pay for the health insurance they need.

Here’s a guide to some of the provisions common to several of the replacement plans, already dubbed “Trumpcare” by some, and how they may affect you.

What ‘Trumpcare’ Could Do

  1. Expand health savings accounts.One of the GOP’s biggest objections to the ACA is using federal money to give low-income people subsidies to help pay their insurance premiums. Instead, they want to encourage the use of health savings accounts, or HSAs, which allow individuals to put pretax money away to pay for healthcare expenses. Some Republican plans call for providing some funding for these HSA accounts.

HSAs are now available only to people who have high-deductible health plans, which means they have deductibles of at least $1,300 for an individual and $2,600 for a family. GOP proposals would allow people to open health savings accounts even if they didn’t have a high-deductible plan.

They would also allow people to contribute more than the current amount—$3,350 for singles and $6,750 for a family. That might not help many Americans, who can’t afford to stash away that much money, but could be a tax benefit for wealthier people.

  1. Require continuous coverage.A popular part of the ACA is the provision that all people, even those with pre-existing health conditions, are entitled to coverage without premiums being rated based on a medical condition. But that provision also made ACA plans expensive.

Under some of the GOP plans, people with pre-existing conditions could still get insurance without higher premiums—but only if they were covered by insurance for at least the 18 months immediately before applying for new insurance.

If you have a lapse in coverage—say you lose your job and your employer-based health insurance, or can’t afford the premiums on your insurance—an insurer could deny you coverage or charge you significantly higher premiums to enroll in a new plan.

  1. Return to high-risk insurance pools.For people who don’t qualify for continuous coverage, some GOP plans propose high-risk pools. Before the ACA, 35 states offered insurance to people considered at high risk for needing costly care because they had an illness or disease or prior treatment or diagnosis for a medical condition.

These high-risk insurance pools were often the only option for people with pre-existing conditions, unless they were insured by their employer or through government programs such as Medicare and Medicaid.

But these high-risk plans were very expensive, offered limited coverage, and programs were underfunded in some states, so there were waiting lists and no guarantee you could get coverage.

  1. Allow insurers to sell across state lines.Currently, each state sets its own consumer protections and demands for what insurance must cover. Under some GOP alternatives, insurers couldsell insurance policies in multiple states without having to craft state-specific plans.

The hope is that creating a national market for insurance would encourage competition to offer lower-cost insurance and give consumers more choice.

But critics worry that insurers would set up headquarters in states with weaker requirements, which could allow insurers to offer fewer consumer protections, less-comprehensive plans and limit states’ ability to regulate insurance companies.

What the Changes Mean for Consumers

Health policy experts and consumer advocates acknowledge that the ACA has shortcomings but also feel that some of the proposals in the GOP plans could make insurance harder to afford.

The ACA did a good job offering coverage for people who had pre-existing conditions and people with very low incomes, but made insurance more costly for some higher-income people in the individual market who didn’t qualify for subsidies, Jost says. He says the current proposals shift that equation.

“It’s going to be a very good time in America to be young, healthy, and rich. Not a good time to be old, unhealthy, and poor,” Jost says.

Consumers Union, the policy and mobilization arm of Consumer Reports, is analyzing each legislative proposal as it emerges.

“We intend to hold Congress and the administration accountable for the promises they’ve made to the American people that their new plan will be even better than the ACA,” says Betsy Imholz, director of special projects at Consumers Union.

“The physicians’ oath to ‘do no harm’ applies, and the 20 million consumers covered by the ACA deserve that protection as we collectively work to ensure affordable, adequate coverage for all Americans.”

Having agent Mark Deschenes will keep you properly protected while saving money.  Call today 800-257-1723 or click here now to schedule an appointment

Here’s the truth about short-term health insurance policies

By | Health Insurance, Health Reform

Here’s another thing health care consumers need to watch out for in the midst of the proposed changes to the Affordable Care Act: The comeback of short-term health insurance policies.

Click on the image to read the original article.

Click on the image to read the original article.

Blogger’s Note: News agencies tend to interpret the alternatives to Obamacare in a limited or biased manner. This blog, based on a recent CBS article, is intended to clarify the facts and provide you, the reader with the benefit of my 28 years of experience as a health insurance agent. My clarifications are in Blue Text.

Actually, they never truly went away, even though they aren’t considered a qualified health insurance option under the ACA. (Clarification: What this means is they are not guaranteed issue, don’t cover normal maternity and have limited coverage for drug, alcohol recovery or mental health.  In addition, in Texas they don’t cover anything you have been treated for in the last 12 months prior to your effective date (pre-existing conditions).  Short answer – Short Term Policies are like health insurance used to be.)

These plans, which provide coverage for less than a year and as little as three months, appeal to recent grads, people who are between jobs and consumers who are caught between health exchange enrollment periods.  (Clarification: They also apply to healthy families who don’t want to pay triple the price they did just a few years ago for coverage.)

Consumers who opt for these plans don’t fulfill the Obamacare mandatory coverage requirement and are subject to penalties. (Clarification: As a blanket statement this is FALSE. Click here to read my vintage Blog How to Legally Opt Out Of Obamacare.) What’s more, benefits under these policies are extremely limited, (Clarification: Some low quality short term medical plans exist, some are fully comprehensive and mirror coverage like insurance plans did just before Obamacare took place – that is why you have an agent to point out the differences and keep you protected.)  often excluding preexisting conditions and other illnesses. Deductibles can be high, (Clarification: Obamacare plans have huge deductibles too – who are they kidding we are not that stupid!)   and dollar amount caps on coverage are common.    (Clarification: Sure $1 million to $2 million is common- but the plan only has to last to the end of the year.  In my 28 years of experience, I have never had a person use more than $1 million dollars in a 12 month period EVER.  IF you are still worried about that you will read about a solution a bit later in the article.)

Because coverage is so limited, (Clarification:  Limited in this case means “coverage does not include pre-existing conditions”.  Another way of looking at the limitation is that these policies are not guaranteed issue, therefore not letting in the 300 pound diabetics who smoke and drink.)  premiums are extremely low. Healthy individuals who simply want short-term catastrophic coverage in case of an accident or sudden illness have found that even with the ACA penalty, they’re still paying less than they would for coverage in an exchange.  (Clarification:  First of all, I can show you how to have NO penalty GUARANTEED and yes they are paying less – WAY Less).

Video: Repeal or Replace

As a result, sales of short-term policies have actually increased in recent years. (Clarification: Not increased- Skyrocketed)  To thwart that trend and avoid siphoning off consumers from the exchanges, the Obama administration passed a new rule stating that short-term policies can last no longer than three months, explained Sabrina Corlette, research professor at the Georgetown University Health Policy Institute. The rule is slated to go into effect April 1.  (Clarification:  This is true- however we expect the new HHS secretary to nullify this illegal Obama administration edict shortly).

However, if some of the Republican proposals to replace the ACA become a reality, sales of short-term policies may increase even more. (Clarification: In fact HR 522 has been introduced into Congress to make Short Term Medical coverage permanently 12 monthsI feel this type of plan will be the “go to” plan endorsed by the Administration until the new replacement for Obamacare is ready.) Taking away the mandate that all Americans have qualified coverage or pay a penalty may certainly boost sales.  (Clarification: Of course sales will “increase” – people are sick and tired of paying more for their health insurance than their mortgage.)

Another jump may come from a common element of Republican replacement plans: In order to maintain coverage for preexisting conditions patients must have “continuous coverage.” In other words, your insurance cannot lapse. So patients with health issues may buy a short-term policy simply to maintain coverage, said Sandra Hunt, a principal with PwC who specializes in health care. She said people looking to find a less expensive option for COBRA coverage are especially vulnerable.  (Clarification: Substitute “vulnerable” for “eligible and likely to benefit from Short Term Medical”.)

That trend has some experts worried because of the limited coverage and the fact that short-term policies don’t have to adhere to federal regulations, (Clarification:  Who are these experts who want you to pay triple what you did just a few years ago?  Why don’t these experts tell you that short-term policies adhere to State Regulations as Health Insurance is regulated by the State you live in?)  said Corlette. If you find yourself considering a short-term health plan in the future, keep these points in mind:

You may not get the coverage you need most. Because so many short-term plans exclude preexisting conditions, you may find you’re paying for insurance, but you’re not getting coverage for your health needs. Yes, a short-term policy may (Clarification: Will cover) you if something catastrophic happens, but not if it’s related to a health issue you are already have.  (Clarification: We made this clear in the beginning and only sell plans that are health appropriate to the customer.  Sick people WILL have to stay in the high risk pool known as Obamacare – the rest of us are smart enough to bail out.)

Your coverage may end in the midst of treatment. If you’re diagnosed with an illness and undergo treatment, that treatment may well last longer than your insurance policy. Because short-term policies don’t fall under ACA regulations, the insurer doesn’t have to renew coverage and likely won’t.  (Clarification: ABSOLUTELY TRUE – this is why we align the end date of your plan with open enrollment of Obamacare – Problem Solved.  You only pay the ridiculous high price for Obamacare once you are seriously ill, and only for that specific family member.  The rest will continue on the Short Term by reapplying for a new plan.)

You may not qualify for continued coverage. “With the new administration and the many proposed health law changes, it’s not clear yet what would qualify as continuous coverage and what won’t,” said Corlette. Unsuspecting consumers with health issues may buy one of these policies hoping for a less expensive way to keep coverage only to find it doesn’t count.

(Clarification: That last point is a bit of political babble.  What it should say is, “Once my short term ends – IF you are seriously ill, what are my choices? –  This is why I pair the much lower cost Short Term Medical with a Living Benefits planThe Living Benefits Plan is a term life insurance policy – a long term care plan – and a critical illness policy rolled into one.  The plan usually accelerates a portion of your death benefit into tax free cash.  This “chunk” of money is used as a golden parachute and better positions you to make the transition back into guaranteed issue coverage- like the expensive Obamacare with limited doctor access – or better yet may position you to purchase a small group health insurance plan by providing you the cash to start a business and get guaranteed PPO coverage.  With this small business option you can get a “big company” benefit package at the first of ANY month during the year once you have a legitimate business – be the owner and have a full time paid employee.)

Ask yourself these questions –  Would I be better off buying Cobra or Obamacare (and paying ridiculously high premiums and having only my Medical Bills paid)  OR  Would I be better off getting my medical bills paid PLUS having a Living Benefit payout of up to $1.5 million in cash to spend for what ever I see fit?

The obvious answer is to position yourself better with Short Term Medical and a Living Benefit plan.

Oh, and did I tell you that the savings from buying Short Term Medical more than pays for the Living Benefits Policy?  That’s like getting living benefits for FREE.

Having an agent such as myself can help you navigate the health insurance landscape and provide quality coverage for far less.   Benefit from my knowledge by contacting me, Mark Deschenes at 210-696-7900 or click here now to schedule an appointment.

© 2017 CBS Interactive Inc.. All Rights Reserved.

 

Hidden Dangers of Obamacare HMO

By | Health Insurance, Health Reform

imagesIf you believe that your Obamacare policy assures you of access to the healthcare you need…and that under Obamacare you are “well taken care of”….you might be disappointed.

Based on my 28 years of experience in health insurance, vast experience helping clients get the right care when they need it, and horrifying experiences with Obamacare policies precluding insureds from getting access to the care they need, I can tell you that under Obamacare insureds find out at the worst possible time that their Obamacare policy does not “take care” of them.

Whenever I work with a client or prospect my number one concern is to be sure that they will have the insurance coverage to pay for what they need – when they need it.  But sometimes people just don’t follow my advice.

Under the current Obamacare environment your choices are Obamacare, Christian Sharing, or Short Term Medical.  Which should you choose?

Obamacare is an HMO.  An HMO (Health Maintenance Organization) is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. HMO’s don’t cover out-of-network care – except in an emergency. HMO’s require you to live or work in their service area to be eligible for coverage. HMOs focus on prevention and wellness – and that means a very limited doctor list.

With an HMO, even if your OBGYN or family doctor is in their network you may find that once you are diagnosed with something serious you are handcuffed into the limited network with low cost solutions – not necessarily the best – that the HMO has contracted.

Here is an example this week of a client of mine in an Obamacare Blue Cross Plan (because he didn’t follow my advice) – who found out he has thyroid cancer and was not been able to find a specialist in the Blue Cross HMO Network to take care of his problem.

In his own words to me: ” WTF- What can I do?”  (Emphasis here – those are his words not mine.

Him: “I never dreamed I’d come down with this kind of problem.  This is the only Doctor in the Blue Cross Blue Shield HMO Network.  Do you have an opinion of him?”image (1)

Me: “Yes I have an opinion…there are two surgeons in this city that can perform that surgery with the least risk of complication.  They are Dr. XX and Dr. YY (names withheld for obvious reasons).
I know other people who decided to go with Obamacare and ended up in your situation – they used the Docs on the HMO and ended up with complications.”

Him: “I’ve heard that, and that’s why I’m calling.  I should have listened when you suggested the The Family Protection Grid…and wondered who you would recommend if I would have had that coverage.”

So what’s the man do?  Hi digs into his pocket to pay the surgeon himself.  Because the doctor is not in network the BLUE HMO will NOT PAY any of the claim!image

So now he wants to be “bailed out” but to no avail – as his bed is made and now he is stuck with it –

I did my best – because I just care enough about my clients – even the abrupt ones – to actually share knowledge and help them see if they are doing the right thing for themselves and their family.

Christian Sharing is reimbursement– so you must be able to secure the care in the first place without a guarantee of payment.

This normally means fronting the cash.

Short term Medical

Short term medial alone is NOT the answer.  It has a limited duration.  But Short Term Medical in combination with a Living Benefit plan or large Critical Illness policy provides you the cash to “buy” your exit strategy at the end of the term.

You see, by getting a large infusion of cash, then you can purchase a small group PPO plan with excellent benefits.  This means at the 1st of any month you can “buy” your way into group coverage PPO with excellent benefits.  (A  preferred provider organization (or PPO) is a managed care organization of medical doctors, hospitals, and other health care providers who have agreed with an insurer or a third-party administrator to provide health care at reduced rates to the insurer’s or administrator’s clients.)

IT is NOT cheap! But if you are serious then this is the serious solution.

 

Innovative thinking — expertise- this is what I offer.

Call me at 800-257-1723 or click here now to schedule an appointment 

 

Until then –

Cheers!

Mark Deschenes

 

 

Here is why a Living benefit plan with guaranteed premiums outshines a long term care policy

By | Health Insurance, Life Insurance

John Hancock Rate Increase Scan-1With long-term-care insurance premiums climbing by double digits and several insurers exiting the business in the past few years, many families are turning to an alternative: using life insurance with living benefits.

Living benefits term life insurance policies can be purchased with one or more riders, which will pay you money while you’re still alive if:

  1. You’re terminally ill.You can receive a portion of your death benefit in advance, for help with medical expenses, one final around-the-world fling, or whatever.
  2. You’re chronically ill.Frequently you’re considered chronically ill if you can’t perform several of the six activities of daily living, such as getting out of bed, feeding yourself, bathing, and so forth. You can receive a portion of your death benefit in advance, in situations like this.
  3. You’re critically ill.That could mean you’ve been diagnosed with a heart attack, stroke, cancer, end stage renal failure, major organ transplant, or some other pretty grim illness. Again, you can get some or all of your death benefit early – in time to be of some use to you.

If you currently have a long-term care insurance policy you’ve probably seen that the annual cost is increasing.  However, if you have a living benefits life insurance policy with guaranteed level premiums you are NOT be experiencing a cost increase…and the benefits are almost identical!John Hancock Rate Increase Scan-2

Here’s an example:  If you look at the last page of the letter  on your right, it shows a whopping 27% increase! This plan has doubled in price over in 3 years!  Now the cost is now $452.90!  When it was sold originally it was $97 – in 2010 it was $196 and in 2013 was $217.

Living benefits can protect you and your loved ones from the devastating costs of unexpected long-term care and illness.  Don’t you owe it to those you love to purchase the best value in protection from the costs of your long term care needs?

Call us today at 1-800-257-1723 or click here now to schedule an appointment.

 

 

 

 

John Hancock Rate Increase Scan-3

Demand for popular short-term insurance plans could surge under Trump Executive Order

By | Health Reform

Short-term health plans have been around for decades, bridging coverage gaps for people who are between jobs or have recently graduated from school, among other things.Bridge

After the health law passed, some people gravitated toward them because they were willing to trade comprehensive coverage for a cheaper sticker price – even if it meant paying a tax penalty for not having the comprehensive coverage required in the law. Sales increased.

Now, as Republicans look for ways to weaken the health law’s coverage requirements and explore the possibility of not enforcing the requirement that people have health insurance, short-term plans may be poised to grow even more.

As their name suggests, short-term plans provide coverage for a limited period of time, often six months or less. They generally don’t cover such things as preexisting conditions, maternity services or prescription drugs. However, when combined with other coverages these plans meet the needs of most healthy health insurance buyers.

When the health law passed, insurers increasingly began offering short-term plans that stretched the definition of “short,” sometimes providing coverage for as long as 364 days.

“Carriers were exploiting a loophole in the law that defined a health insurance plan as one that was 365 days,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. “If they were shorter, they didn’t have to comply with ACA protections.”

Short-term plans serve a tiny but growing proportion of the roughly 22 million people who have coverage on the individual market. At the end of 2013, before the health law’s major reforms took effect, there were approximately 108,800 people covered by these policies, according to figures from the National Association of Insurance Commissioners. Two years later, roughly 148,100 people had short-term plans.

Some insurers have taken notice. Online health insurance agency Health Life Dental Insurance was one of the pioneers in this space.

“These short-term coverages, when combined with packages of other protections to maximize your coverage, provide more economical protection without the high deductibles that are part of the ACA,” said Mark Deschenes, General Agent and President of Health Life Dental Insurance. “It’s almost like the old individual market before the ACA.”

“Our approach is to combine several coverage packages to protect people when unforeseen events occur such as a car accident or a cancer diagnosis. With a short-term plan, if you get sick or you’re in the hospital when your plan comes up for renewal, it won’t be renewed,” Deschenes said. “but we combine other types of insurances together so that those circumstances, should they arise, are properly covered.”

Last October, the Obama administration issued a final rule that would make it more difficult for consumers to buy short-term plans to substitute for regular Obamacare plans. Recognizing the challenge created by that ruling, Deschenes and his agency went to work to successfully develop a program that provides the high value insurance programs that they have become known for.

For more information about how Health Life Dental Insurance can improve the coverage you receive while lowering the premiums you pay call us now at 1-800-257-1723 or click here to schedule an appointment.

Will Paul Ryan’s Obamacare Replacement Work For People With Pre-Existing Conditions?

By | Health Reform

The pre-existing conditions issue played a central role in the design of the Affordable Care Act, and dealing with this issue appropriately in any ACA replacement plan will be instrumental to the achievement of stable and sustainable individual and small group health insurance markets.

PHILADELPHIA, PA – JANUARY 26: U.S. President Donald Trump (L) shakes hands with Speaker of the House Rep. Paul Ryan (R-WI) (R) during a luncheon at the Congress of Tomorrow Republican Member Retreat January 26, 2017 in Philadelphia, Pennsylvania. Republican Congressional members gathered in Philadelphia to participate in the retreat. (Photo by Alex Wong/Getty Images)

PHILADELPHIA, PA – JANUARY 26: U.S. President Donald Trump (L) shakes hands with Speaker of the House Rep. Paul Ryan (R-WI) (R) during a luncheon at the Congress of Tomorrow Republican Member Retreat January 26, 2017 in Philadelphia, Pennsylvania. Republican Congressional members gathered in Philadelphia to participate in the retreat. (Photo by Alex Wong/Getty Images)

House Speaker Paul Ryan and House Republicans’ June 2016 Better Way health care reform proposals, supported by Representative Tom Price, President-elect Trump’s nominee to head HHS, will surely influence the development of replacement legislation.  Consistent with the Better Way, there would appear to be fairly broad support among Congressional Republicans for a replacement plan that at a minimum (1) guarantees that people who maintain continuous coverage can do so at terms that do not reflect health status, (2) provides substantial incentives for people to purchase coverage before needing costly medical care, and (3) provides some form of safety net for those who fail to purchase and maintain coverage.

The ACA guarantees issue of individual and small group health insurance at premiums that do not consider a buyer’s health during annual open enrollment and special enrollment periods.  Premiums vary by age within a 3 to 1 range.  Premium subsidies to buyers with incomes up to 400 percent of the poverty level, and cost sharing subsidies for those with incomes up to 250 percent of the poverty level, encourage the take up of coverage.  The individual mandate imposes modest penalties for failure to obtain coverage, provided that available coverage is “affordable” (costs less than about 8 percent of income).

The subsidies and mandate have yet to produce balanced and stable risk pools in many states.  Individual market enrollment has been much lower than projected; the average age and morbidity of enrollees has been higher.  Many potential buyers, especially the young, who do not expect substantial medical expenses and are eligible for little or no subsidy regard expensive coverage with substantial cost sharing and narrow provider networks as not worth the cost.  The 3 to 1 age rating band lowers premiums for older buyers but increases premiums for younger people, reducing their incentives to insure.

Large premium increases in many states and accompanying losses to and exits of insurers suggest that market sustainability under the current law’s structure would be at best uncertain without significant changes, such as larger taxpayer subsidies and/or tougher penalties for violating the mandate.  Widening the age rating band would facilitate lower premiums for younger buyers, but by itself would require higher premiums and increase adverse selection among older buyers.

The House Republicans’ Better Way insurance market proposals would guarantee people who maintain continuous coverage the ability to purchase health insurance in the individual market regardless of pre-existing conditions at premium rates that do consider the buyer’s health.  The currently uninsured would be able to do likewise during a one-time open enrollment period.  The ACA’s individual and employer mandates would be repealed.

Instead of the ACA’s premium and cost sharing subsidies tied to income, people without access to employer sponsored coverage, Medicare, or Medicaid would receive “a universal advanceable, refundable tax credit” to help pay for coverage.  The size of the credit would increase with age but not be tied to income.  Most of the ACA’s restrictions on coverage amounts and required benefits would be repealed, with regulatory authority returned to the states.  A default age rating band of 5 to 1 could be increased or decreased by the states.  Expanding the range would reduce subsidies from younger to older buyers.

People who failed to obtain and/or maintain coverage would not be guaranteed access to coverage at rates that do not reflect their health status.  Following the initial open enrollment period, and depending on state policy, insurers would be able to deny coverage, include exclusions or waiting periods, and/or charge higher premiums to applicants who had failed to purchase and maintain coverage.  Under the Better Way’s safety net component, people who failed to purchase and maintain coverage would be eligible for basic coverage with higher premium rates in state high risk pools with some level of federal funding.  This approach would separate the subsidization of people who wait to buy coverage until needing care from pricing in the guaranteed issue market, reducing if not eliminating the impact on premium rates for people who purchase and maintain coverage.

The arguments against pre-ACA state high risk pools—limited protection, high premiums, and inadequate funding—are well known.  Many argue that repeal of the individual mandate, even with its modest penalties and exemptions, is fundamentally incompatible with the attainment of balanced and stable risk pools.  Adverse selection death spirals occurred before the ACA in a number of states that adopted guaranteed issue with significant rating restrictions without mandating coverage.  That state experience, however, arose without either refundable tax credits to encourage coverage take up or separately funded high risk pools.