Health Insurance

Why you need Health insurance?

 

Although most Americans get their medical insurance from an employer or from the government, individual health insurance is designed for people who are self employed or who do not have access to an employer-sponsored or government health plan. Historically, individual insurance in almost all states involved medical underwriting prior to 2014, which meant that securing a policy was often difficult for people with pre-existing conditions.

Most health insurance companies are for-profit entities, and even non-profit carriers cannot operate at a loss. They have to take in more money in premiums than they pay out for medical claims. In the individual market, medical underwriting was traditionally the way they accomplished this. People with pre-existing conditions could be declined for coverage, or offered a policy with an increased premium or exclusion riders that eliminated coverage for pre-existing conditions.

 

When should you consider Health insurance?

 

All but the most wealthy among us need health insurance to protect against bankruptcy in the event of a serious illness or injury, and to secure access to expensive life-saving medical care if we need it. Although lawmakers saw that removing medical underwriting from the individual health insurance market was necessary in order to extend coverage to everyone, they also knew that this had the potential to create significant adverse selection in the market. There was just too much potential for people to wait to apply for a policy until they needed medical care, knowing that the coverage would be guaranteed issue.

 

So the Affordable Care Act (ACA) includes two provisions to prevent this: With very few exceptions, everyone is required to have health insurance or pay a penalty (the penalty will be eliminated in 2019, under the terms of the GOP tax bill that was enacted in 2017. But it’s still in effect for 2018, and will be assessed on tax returns that are filed in 2019. In addition, some states will impose their own mandate penalties starting in 2019). And individual health insurance is only available for purchase during open enrollment windows (November 1 – December 15 in most states, with coverage effective the first of January).

Types of Health Insurance:

Individuals & Families

Individual health insurance is available both in and out of the Health Insurance Marketplace or exchanges.  Individual ACA-compliant plans are rated with “metal” designations, which helps consumers compare apples to apples. There is plenty of variation from one carrier to another, both in terms of plan design and price, but policies are labeled based on their actuarial value, or the percentage of costs that the plan covers across an average population. Several state-run exchanges have additional plan standardization in place.  Bronze plans will cover roughly 60 percent of costs, Silver plans 70 percent, Gold plans 80 percent, and Platinum plans 90 percent. For people under age 30 or those with hardship exemptions, catastrophic plans are also available.  Subsidies are not available to offset the cost of catastrophic plans however, so only a very small percentage of enrollees select them.  All plans are subject to out-of-pocket maximums which cannot exceed $7,350 for an individual or $14,700 for a family in 2018 (these maximum out-of-pocket limits will increase to $7,900 and $15,800, respectively, in 2019).  Plans can have lower maximum out-of-pocket limits, but no ACA-compliant plan can be sold with higher out-of-pocket limits (grandfathered and grand-mothered plans that are still in force can have higher out-of-pocket limits, but those plans can no longer be purchased by new enrollees).

 

ACA/Marketplace (Obamacare)

When you’re deciding where to shop for coverage, it’s important to figure out if you qualify for a premium subsidy or cost-sharing reduction subsidy based on your household income. If you do, you’ll probably want to get your health insurance through the Marketplace, because that’s the only way the subsidies are available.  If you take medications or see specific medical providers, you’ll want to also check the formularies and provider networks of the available plans, and it’s possible that an off-exchange option might work better for your situation. But if you’re eligible for subsidies and you select an off-exchange plan, you’ll be giving up that financial assistance.  Cost-sharing subsidies are only available on Obamacare Silver plans in the Marketplace.

 

Premium subsidies for eligible applicants can be applied to any of the “metal” plans in the Obamacare Marketplace.  Cost-sharing reduction subsidies are available to applicants with household income between 100 percent and 250 percent of the federal poverty level (the lower threshold is 139 percent in states that have expanded Medicaid; below that, Medicaid is available instead).  Premium subsidies are available to applicants with household income between 100 percent and 400 percent of the federal poverty level (the lower threshold is 139 percent in states that have expanded Medicaid; below that, Medicaid is available instead).

 

Off-Exchange

For the consumer, the main reason to look at off-exchange plans is to expand your choices. What kind of choices? Here are four big choices you may have with an off-exchange plan:

1. The choice of a different carrier:

Many national carriers such UnitedHealth and Aetna no longer participate on the Federal Health Insurance Marketplace but still offer Off-Exchange Plans

2. The choice of a different network:

Off-exchange plans sometimes work with different networks. Say you want to keep a particular family doctor, but none of the on-exchange plans in your price range work with her practice. You may be able to find an off-exchange plan in your price range that does include her in their network, making the off-exchange plan your best choice for keeping your preferred doctor.

3. The choice of different drug coverage:

Prescription drug tiers: they’re complicated and annoying for even the most seasoned among us. If you have a specific drug (or drugs) that you need, you may be better off with an off-exchange plan that includes those drugs in their drug list, instead of an on-exchange plan that includes a different brand or a generic.

4. The choice of a different plan structure:

Some state exchanges have additional rules on top of the federal laws that all health insurance plans must follow. These rules must be followed if you want to offer an on-exchange plan. However, these rules are sometimes very specific, and may increase the price of a base health insurance plan. For example, a state may require that children’s vision benefits be built into all health insurance plans sold on the exchange, instead of as a separate product.  Off-exchange plans, which don’t have to follow these rules, can be structured differently, potentially offering shoppers a lower price on similar coverage. Exactly how this works will depend on your state.

 

Be warned: off-exchange plans don’t qualify for subsidies

Small Businesses

Many small businesses are confused about whether or not they are required to provide mandatory group health insurance for employees. Under the Affordable Care Act (Obamacare), new health coverage requirements have been made that may affect small business owners.

 

How the Affordable Care Act changed insurance coverage for small business owners:

Generally speaking, Obamacare does not require most small business owners to offer group health insurance coverage. If the organization has fewer than 50 full-time employees, small business owners are not subject to a penalty for not providing health insurance for their employees. Many small employers opt to provide coverage anyway, in order to help them hire and retain the best workers.

Should small business provide health insurance coverage for employees?

There may be a number of advantages to offering health insurance coverage to your employees:

  • Hiring and retaining talent. You know how important health insurance and access to medical care is to you and your employees. By offering group health insurance coverage, you may be better able to hire and retain the workers you want.

  • Multiple ways to buy. You may be able to purchase an employer-based group health insurance plan through special government-run marketplaces, direct from the insurance company, or through private licensed online marketplaces.

  • Help from licensed agents. When you shop with a licensed agent, your agent can often help you manage employee enrollment and also serve as your main point of contact with the insurance company.

  • Possible tax credits. When they purchase coverage through government marketplaces, some small businesses with 25 or fewer employees with average annual wages of less than $50,000 may be eligible for a special tax credit of up to 50% of the employer contribution toward employee health premiums.

  • Preventive care coverage. Under all Obamacare-compliant plans, certain preventive care services are covered without deductible, co-payment or coinsurance.

  • Coverage for pre-existing conditions. Under the ACA, any health insurance coverage offered On and Off-Exchange includes coverage for pre-existing conditions.

Short-Term Medical

For millions of Americans, buying a short-term health insurance plan offers the fastest route to having some level of coverage in place. These plans are not ACA-compliant, but can still provide protection from catastrophic medical expenses — and you can purchase the plans at any time during the year.  That means you could buy a short-term plan today and — if you’re approved through the underwriting process — you could have coverage in force as soon as the next business day. This aspect of short-term plans is particularly appealing to consumers who are planning to buy ACA-compliant coverage but who face a wait of days or weeks — or even months — before that coverage takes effect.  As the name implies, the coverage is temporary, and historically has been limited to three-month durations. However, the CMS has approved new regulations that would allow coverage to remain in force for up to 364 days. (Several states have more restrictive rules for short-term plans.)

 

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