Why Your Individual Health Insurance Plan is Getting More Expensive in 2017 (and what to do about it)

Renewal for 2017 individual health insurance plans is just around the corner, and you’ve probably noticed that your rates might be increasing quite substantially next year. For example, in California alone, individual health insurance policies are expected to rise more than 13% in 2017 (that’s 3 times the increase over the past two years).

So… why is this happening? And… what can you do about it? To answer the first question: healthcare reform is a big part of the reason your rates are going up. We’ll explain what you can do about it later in this article.

In case you’re not familiar, changes to the individual health insurance marketplace were at the core of Obamacare. There were a number of different provisions that went into place, but the two big ones were:

  • A) Guaranteed Issue,
  • And B) Essential Health Benefits.

“Guaranteed Issue” is the requirement that if you apply for health coverage, you have to be accepted. In other words, if you have a preexisting condition, you cannot be denied coverage. Since this concept took effect on January 1st of 2014, thousands and thousands of people with existing health conditions have enrolled in individual health insurance plans nationwide. Many of these people have had a substantial need for various treatments: prescription drug coverage, surgeries, hospitalizations, and other kinds of medical services. As a result, costs to the insurance companies have gone up, and those costs are now finally catching-up to the consumer (you) in the form of premium increases.

Additionally, “Essential Health Benefits” are new benefits that are now mandated by Obamacare, and must be included in all individual health insurance policies. Prior to 2014, individual health plans were not required to include these “essential benefits” (examples: things like maternity, mental health benefits, and others). As a result, the addition of these benefits has caused prices to increase because there are more health services that need to be covered.

Given the combination of the two concepts listed above, we’re now starting to see substantial increases in premiums in 2017, in order to conform. In fact, in many cases, the cost of providing healthcare services under healthcare reform has been more than what was originally anticipated. As a result, certain insurance companies throughout the country have decided to exit the health insurance exchanges altogether, because of heavy financial losses.

So what can you do if your individual/family health insurance plan is increasing this year? Here are some ideas:

  1. Shop. Make sure to take a good look at all of the available options within your zip code this year. There may be new (and/or alternative) plans available in your area that can save you money. Find a good health insurance broker who can assist you.
  2. Leverage the Strength of Small Business Plans. If you’re a small business owner (especially a SMALL business owner of like 2-3 employees), consider setting up a small group health insurance plan with your partners so you can exit the individual marketplace. Small group plans are not seeing price increases at nearly the same rate as individual plans. One big reason why, is that small group plans haven’t been affected as much by having to “on-board” so many people with preexisting conditions like the individual marketplace has. You could reduce your costs substantially with this strategy.
  3. Consumer Direct. Consumer directed healthcare is when you participate in a higher deductible plan, and then pair it up with an HSA (Health Savings Account). This can help you lower your premium, and then retain funds in your HSA that would normally go to the insurance companies.
  4. Look into the “Little Guy” Insurance Companies. In California (especially Southern California), there are many smaller regional insurance companies that are participating on the Obamacare health insurance exchange. In many cases, these smaller insurance companies are actually thriving under the conditions created by healthcare reform. You might be pleasantly surprised that the prices, service, and plans are actually pretty good. Check with your broker for local recommendations.
  5. Don’t Panic. 2017 could be the “big year” for price increases, and they may stabilize again next year. Just because there are big increases this year, doesn’t necessarily mean there will be again next year. If your increase this year is manageable (ie: not breaking the bank) and you like your current plan, consider sticking with it for another year. You can always change it next year.

Be sure to contact us at PolicyAdvantage.com if we can assist you with your current individual health plan this year (Phone: 800-617-0089, Email: info@policyadvantage.com). We may have recommendations that can help you improve coverage and save money. 

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Simple Guide: Prescription Drug Coverage

RXPrescription drug coverage in health insurance plans can sometimes be confusing. We’ve put together a simple, short guide that outlines the four “tiers” of prescription drug coverage found in most individual health insurance plans, so that you can understand your options better. 

Most individual health insurance plans will have four (4) different tiers of prescription drug coverage. It’s important to understand the difference between these four tiers, and how the deductibles and co-payments work within them. 

We’ll briefly explain the different tiers, and how they function. Keep in mind that this is just a general overview, and if you have questions about your specific plan, contact us. *Remember: most individual health insurance plans will contain these four tiers of coverage. Here are the four tiers:

  1. Tier 1 Prescription Drugs: these are usually what are called “generic” prescription drugs. They typically have the lowest co-payments, and most of the time there is not a deductible involved. 
  2. Tier 2 Prescription Drugs: these are what are called “preferred brand name” prescription drugs. This tier moves out of generic prescription coverage, and into brand name drugs. “Preferred” means that they are preferred by the insurance companies because of their lower cost. Certain generic drugs can also sometimes be included in this tier. Co-payments are usually higher (compared to tier 1 generic drugs), and sometimes there is an additional annual deducible involved (depending on your plan).
  3. Tier 3 Prescription Drugs: these are usually referred to as “NON preferred brand-name” prescription drugs. They are considered higher cost pharmaceuticals, and are therefore “non preferred” by the insurance companies. Many times, your insurer will try to find alternatives in the lower two tiers. Co-payments are usually higher, prior authorizations (doctor approvals) are more prevalent, and sometimes there are additional deductibles involved. Certain specialty drugs (Tier 4 drugs) can also be included in this list. 
  4. Tier 4 Prescription Drugs: these are usually what are called “specialty” prescription drugs. They are considered the highest-cost pharmaceuticals, and are most often highly expensive specialty drugs. Prior authorizations (doctor approvals) are highly prevalent, and cost-sharing is the highest. Typically there is what is called co-insurance at this point, where you pay a percentage of the entire cost of the drug, and the insurance company pays the remainder. 

Prescription drug coverage is an important concept to understand. Having a good handle on the concepts above can help you improve coverage, save time, and save money.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.PolicyAdvantage.com

Twitter: http://www.twitter.com/PolicyAdvantage

Facebook: http://www.facebook.com/PolicyAdvantage

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What’s the Difference Between the Emergency Room and Urgent Care Center?

EROne of the biggest questions we get at Policy Advantage Insurance Services is:

  • What’s the difference between the Emergency Room (ER) and the Urgent Care Center?

This is an important question for everyone to understand, because there are big differences between the two when it comes to treatments and costs.

Here’s when you should go to the Emergency Room (ER):

If a medical condition is life or limb threatening, and involves severe wounds or amputations.

These are examples of reasons you may need to visit the Emergency Room:

  • Signs of stroke
  • Severe shortness of breath
  • Poisoning
  • Signs of heart attach/chest pain
  • Severe wounds or amputation
  • Coughing up or vomiting blood
  • Suicidal or homicidal feelings

Here’s when you should go to the Urgent Care Center:

If a medical condition is NOT life or limb threatening.

These are examples of reasons you may need to visit the Urgent Care Center:

  • Stomach bugs (flu)
  • Fever
  • Sprains
  • Dislocations
  • Minor cuts (stitches)
  • Minor broken bones

At an Urgent Care Center, you can receive prompt treatment for your minor injury or illness, and the costs (co-payments) are much less expensive than the Emergency Room. 

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.policyadvantage.com

Twitter: http://www.twitter.com/policyadvantage

Facebook: http://www.facebook.com/policyadvantage

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PolicyAdvantage.com: We Specialize in Helping Small Business

At Policy Advantage Insurance Services, we specialize in helping small businesses when it comes to their health benefits planning. Here’s why:

  • Many times, small businesses don’t have a Human Resources Department to help them sort-out their employee benefits. Therefore, small business owners can end up spending a lot of time and energy researching all the different options and planning strategies. At PolicyAdvantage.com, we can do the “heavy lifting” for you. We’ll put together a custom program tailored to your fit your budget and necessities.
  • With the onset of healthcare reform, there are now many additional options when it comes to health coverage… and many of them are geared towards small businesses. At PolicyAdvantage.com, we know (and understand) how the health insurance industry works. We have broad-based and in-depth knowledge about what programs are available, and how you can put these pieces together to fit your business best.
  • Lastly… we like to help our clients grow and improve. Outside of just health coverage, we know that employee benefits can add a lot of value to an organization. We take great pride in taking good care of your employees, and helping them find the benefits they want or need. We want to help you attract and retain the quality employees that are going to take your business to the next level.

If you’re an employer between 2 to 50 employees, we want to talk with you. There’s often a misinterpretation that brokerages are looking for the “big fish” clients… not-so at PolicyAdvantage.com. We can’t wait to help you improve your small business. For a free consultation, please contact us at our dedicated customer service line: 1(800) 617-0089, or shoot us an email at info@policyadvantage.com.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.policyadvantage.com

Twitter: http://www.twitter.com/policyadvantage

Facebook: http://www.facebook.com/policyadvantage

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#ADVANTAGE: What’s the Long Term Price-Tag of Medicaid Expansion? (8/9/2014)

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Welcome back to another edition of our #Advantage blog segment. This is where we answer the questions that we get on social media. As some of you know, our official Twitter hashtag is #Advantage and you can catch up with us here: www.twitter.com/Advantage (or at @Advantage).

This week we had a question from Jill Pederson (@Jill_Ped) up in Oregon. If you’ve followed healthcare reform closely, you’ll know that Medicaid programs were significantly expanded because of the Obamacare law. Expansion is based on FPL (or Federal Poverty Level). Here was Jill’s question:

Let’s start with a short history: back in the summer of 2012 the Supreme Court of the United States upheld the “individual mandate,” and also ruled that individual states have the option to either “opt in” or “opt out” of expanding their state Medicaid program. As of 2014, 27 states (including the District of Columbia) have expanded their Medicaid programs. That’s over half of the nation (here’s a great infographic from Families USA). 

The question is: What’s the long term price tag of Medicaid expansion? Well if you know much about Medicaid, you’ll understand that it’s a joint state/federal program. So depending on the state you’re in, the price-tag is going to vary… sometimes considerably. Here two of the bigger common factors that will affect costs:

  • Utilization of the Medicaid program (ie: the number of people eligible for Medicaid in your state).
  • Whether-or-not your state decided to expand Medicaid under the federal reform law.
  • …plus others.

And if you’d really like an in-depth explaination, here are the details from the Kaiser Family Foundation: Why does Medicaid Spending Vary Across States: A Chartbook of Factors Driving State Spending. The Kaiser Family Foundation utilizes the “Urban Institute’s Health Insurance Policy Simulation Model (HIPSM)” to provide national and state-by-state estimates of the impact of the ACA on federal and state Medicaid costs.

Here’s the answer to Jill’s question regarding the long-term price of Medicaid for individual states (based on HIPSM’s model): “The Medicaid expansion and other provisions of the ACA would lead state Medicaid spending to increase by 76 billion dollars over 2013-2022 (an increase of less than 3%). Some states will reduce their own Medicaid spending as they transition already covered populations to the ACA expansion.” 

It’s the federal government that’s going to take on most of the bill regarding the expansion. The federal government will pick up 100% of the cost of covering people made newly eligible for Medicaid during the first three years (2014-2016), and no less than 90% on a permanent basis. According to the same HIPSM model:  “Federal Medicaid spending (from 2013-2022) would increase by 952 billion dollars (a 26% increase).”

Here are four important points:

A) What do the proponents of Medicaid expansion say?: Those in favor say that it will reduce the amount of uninsured people, while reducing costs. Many formerly uninsured will be covered, and the general public will take on less of a burden when having to compensate for unpaid medical bills of the uninsured.

B) What do the opponents of Medicaid expansion say?: Those opposed say it’s too expensive, over-reaching, and unaffordable. In order to pay the bill (especially at the federal level), taxes will have to go up. Additionally, some are still skeptical about whether-or-not raising taxes will even be enough to pay the bill.

C) What’s going to happen?: That’s the billion dollar question. Obviously you can speculate, but you can’t predict the future. Optimistically you want to say it’s going work, but technically is still “TBA” (To Be Announced).

D) What IS happening?: Generally speaking, those states that have expanded Medicaid in 2014 are seeing some short-term success. The question though is long-term: will it be affordable and sustainable? Again, TBA.

Thanks for stopping by at our “#Advantage” blog segment dedicated to questions from our social media friends. We hope you found our information to be valuable.

We’ll continue to roll-out answers as questions come in. Don’t forget to hash-tag “#Advantage” at Twitter, and visit our official tag here: www.twitter.com/Advantage.

Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Your Guide: Private Health Insurance Exchanges

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Today we’re going to look at “private health insurance exchanges.” This has been one of the biggest “buzz phrases” in the health insurance industry over the past couple of years for a number of different reasons. The biggest reason though, is healthcare reform. With the implementation of new provisions required in the Affordable Care Act, the way that employers offer health insurance to their employees is changing.

We’ll take a look at the structure of private health insurance exchanges. We’ll also describe the different components that make-up a private health insurance exchange, the types of businesses that should be taking the closest look at these exchanges, how private exchanges work, and why they’re growing in importance.

Private health insurance exchanges are exactly what they say they are: they’re exchanges that are set up privately through an employer. Many private health insurance exchanges utilize two important components:

  1. Technology and software: software programs help facilitate administration of private health insurance exchanges. Technology keeps private exchange administration simple for both the employer and the employee. One example is www.liazon.com. Liazon’s platform allows an employer to define a contribution (much like an allowance), and then employees select their own health benefits. Simply, it’s an employee’s money to spend how he/she wants. The software keeps track of funds spent, shows the employee what kind of health insurance options are available in the private exchange, and allows employees to select the plans they want.
  2. Group health insurance plans: in the past, many employers only offered one group health insurance plan. Administration of multiple plans could be a challenge. So to fix that problem, software companies (like Liazon) have arrangements with insurance companies that allow the employer to more easily offer multiple group health insurance plans, from multiple carriers. The important word here is multiple. With the software and technology that’s available, it’s not nearly as difficult to offer a selection of group health insurance plans anymore. This is important because one of the biggest goals of private health insurance exchanges is to provide choice. By utilizing a private exchange, employees now have choice.

There are additional ways to set up private health insurance exchanges, but businesses with +50 full time equivalent employees will almost always be utilizing the two concepts we’ve described above. And that’s who this article is intended for: businesses that are mandated to provide coverage. However, smaller businesses can also utilize this exact same strategy. If you’re a business that is at 20 employees or above, you’ll want to understand this concept.

Question: Why are private health insurance exchanges becoming more important?

Here’s why:

  • Private health insurance exchanges give employees choices. Instead of being “stuck” in one group health insurance plan, they can more efficiently choose which plans fit them best. Having choices is now more important than ever before, because dependents (spouses and children) need to have affordable access to coverage. In the past, sometimes it was flat-out too expensive for an employee to include their dependents. The private exchange concept helps alleviate that issue.
  • Businesses with +50 full time equivalent employees are mandated to provide coverage. A private exchange is a cost-effective and budgetable way for employers in the “large group” category to provide coverage. You decide on the amount (called a “defined contribution”), and then give that amount to each employee. They pick the plan they want. Simple.
  • Efficiency. If employees are making their own decisions and picking their own plans, the whole system becomes more efficient. Instead of you telling them what they get, they instead pick what they want. When consumers are making their own decisions, they’re more conscience about where money is being spent.

That’s the basic break-down of private health insurance exchanges. Unlike public health insurance exchanges (ie: state & federal exchanges), private exchanges are completely administered within the private workplace.

As mentioned, private exchanges can be an exceptionally important concept for those businesses in the +50 employee range. They accomplish three very important things: budgetability, selection, and flexibility. Those qualities will be very significant to businesses that are mandated to provide coverage. However, this same concept can work very well for smaller businesses too (in the 2-100 employee range).

We work with private health insurance exchanges at Policy Advantage Insurance Services. If you are an employer that fits into the “group-sizes” we’ve described, contact us anytime if you have questions.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Consumer Checklist: Helping Small Business Navigate Healthcare Reform

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Today we’re going to provide small businesses with some information about healthcare reform. We’ve put together a checklist, so you can walk through each important item one-by-one.

What does a checklist do? It helps you navigate. If you have a checklist of items, you’ll know exactly what you need and where to get those items. It’s just like running errands. By having a checklist, you won’t forget the important things either. The things that will save you time, money, and help you improve coverage.

Item #1: Determine if you’re a small business.

This is number one. You want to establish this right away. Why? Because there are costly tax penalties that may be incurred if you’re actually a “large business” and don’t provide health coverage to your employees. As it stands, “large businesses” are mandated to provide healthcare coverage to their workers. Small businesses are not.

Knowing whether-or-not you’re a small business will also help you determine your plan design strategies. Providing health benefits for yourself or your employees as a small business owner differs greatly compared to those of large businesses.

Question: What is the definition of “small business” with regard to the healthcare reform law? Answer: Small businesses are businesses with less than 50 fulltime equivalent employees for the previous calendar year. You’ll sometimes see “fulltime equivalent employee” abbreviated as “FTE.” This is a very important concept. Also, your FTE count DOES include part-time employees. A part-time employee is defined as working less than 30 hours per week, and there’s a calculation when determining their “full time equivalency.” If you’re anywhere near 50 FTE, you’ll want to make sure to have this all sorted out, because there are costly tax penalties for those employers that are over 50 FTE and don’t provide health coverage.

Item #2: Know the differences between individual health plans and small group health plans.

The second important item is to know the differences between individual coverage and small group health insurance coverage. If you know anything about health insurance, you’ll know that these are two parts of the industry are completely different. They have different characteristics. There are different rules. There are different eligibility criteria. There are different tax incentives.

Depending on your business, your objectives, your budget, and other considerations… you’ll need to determine what kind of health insurance plan you want to work with: A) Individual health insurance plans, or B) A group health insurance plan.

The good news: because of healthcare reform, it’s now easier than ever before to work with individual health insurance plans to provide coverage to your employees. And in certain cases, it might even make more sense. Know how individual health insurance plans and the health insurance exchanges can work for small business.

That being said, group health insurance can still be an important option for small businesses. Group health insurance plans also have the best tax incentives, especially if employees are contributing to the plan. Physician networks are also sometimes better when working with small group health insurance plans.

Additionally, there is now a group health insurance plan called SHOP (the Small Business Health Options Program) that is available through the health insurance marketplaces. SHOP can provide tax-credits to help with premiums for qualified small businesses.

Item #3: Decide if you’re going to provide health coverage for your entire group or just yourself. 

Remember: small businesses (less than 50 FTE) are not required to provide health coverage to their employees. However, if you’re not going to provide coverage, you and your employees will still need to find an individual health insurance plan somewhere on your own. The reason? Everyone has to have health coverage or pay a tax penalty.

Determine if you have a budget for your entire group. There could be strategies that are surprisingly affordable, especially based on the size and average income of your group.

Item #4: Understand the different planning strategies for small business.

There are a variety of different planning strategies that are available to small businesses. These different strategies can utilize individual insurance plans, or group insurance plans.

Health insurance is a very basic benefit that can help you attract and retain quality employees. If you determine that you’d like to help provide coverage for your employees, you’ll want to come up with a program that fits your objectives best. Here are a few of them:

Defined Contribution Strategy: “Defined contribution” is a retirement planning phrase. It’s been around for a long time. You can Google it and read all about it. Health benefits planners are now using “defined contribution” strategies to fund healthcare. And it’s simple. It’s exactly what it says it is: you “define a contribution” (ie: $300) per month, and employees then purchase their own individual health insurance plans. Employees can pick from insurance policies that are both on or off the public health insurance marketplaces (where they may also receive substantial subsidies, based on income). This strategy is budgetable, and gets business owners out of the business of making insurance decisions. Employees make their own decisions and purchase their own plan. Effectively, all it is is an after-tax stipend. A raise.

Consumer Directed Health Planning: This can also be referred to as account based or equity based planning. Small business owners can provide their employees access to a high deductible health plan (usually a group plan), and then pair it up with an HRA (health reimbursement arrangement) or HSA (health savings account). The HRA or HSA becomes an asset that builds equity over time. You retain funds that would normally go to the insurance companies in the form of premiums, and ownership of the account stays with either the employee or business, depending on your strategy.

Small Business Health Options Program (known as SHOP): This is a new program that has been made available on both the federal and state health insurance exchanges. It was specifically designed to help small businesses (under 50 FTE) provide a group health insurance plan to their employees. Depending on income and size of your group, you may also be eligible for a sizable tax credit (up to 50% of premiums).

Item #5: Know where you have access to products, advice, customer service, and consultation.

This is the last item on the list. Know where you can find help. Find effective advisers that can help you sort everything out. A “one-stop-shop” can help you save time, money, and a lot of hassle by “outsourcing” your small business health benefits planning. It’s like having your own human resources department.

And the good news: brokers are typically compensated by the insurance companies in the form of commissions. So you don’t have to worry about broker fees, etc. Compensation is built into every single health insurance plan regardless of whether-or-not you choose to work with an adviser.

Additionally, a broker will keep you “in the know” about new products, strategies, and reforms. They should offer a broad range of products and services that will make your planning very convenient for you. Here are some of the qualities you should look for in a broker/consultant:

  • Licensed, accredited, ethical. Find consultants that are licensed by the Department of Insurance to do business in your state. Take it a step further and find advisers that have professional designations. People with these designations provide advanced knowledge, and also adhere to strict ethical standards.
  • A strong selection of reputable product choices. Your broker/consultant should offer you a wide variety of choices from reputable insurance companies.
  • Advice and consultation in non-insurance products and services. Your broker/consultant should also be offering products and services that are considered “non-insurance products.” After-all, the goal is to fund healthcare efficiently, and there are important tools that can help accomplish this besides just insurance policies. Things like HRAs (health reimbursement arrangements), HSAs (health savings accounts), COBRA administration, knowledge of tax incentives, etc. Find a well-rounded broker.

And that’s it. That’s your healthcare reform checklist for small business. By understanding the points we’ve made, you’ll be on the right path to drafting a health benefits program that fits you or your business best.

We help individuals and businesses sort everything out at Policy Advantage Insurance Services. We can help you design an effective, efficient program that fits your objectives. Please contact us anytime for a free consultation.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.policyadvantage.com

Twitter: http://www.twitter.com/policyadvantage

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See for Yourself: Real People. Real Results.

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Helping our clients effectively navigate healthcare reform (and the health insurance industry) inspires and motivates us more than anything. Our number one goal is to help individuals and businesses improve coverage and save money. Whenever we can achieve this, it’s very fulfilling.

We go to work on each-and-every case. Whether you’re an individual or business, we’re listening to you. Depending on your current situation, we can provide you with various options so that you have choices when you’re making decisions. Every case is different, and we take great pride in helping you with your health benefits planning.

Here are some of the results. Real people. Right at Twitter.

We helped Heather navigate COBRA and saved her some big money:

Dave was one of the first to enroll at Covered California, even though the website “wasn’t working” at the time:

We helped Meagan enroll after she incurred long wait times online and over the phone at Covered California:

These are just a few of the people that we’ve helped, and we’d like to thank them greatly for their Tweets. There is nothing that motivates us more. We have a growing list of clients that we’re helping each-and-every day.

We don’t sell, we consult with a skill-set. Here are three good reasons to work with a broker:

  1. Selection: select from a “menu” of health insurance plans at the various companies we work with.
  2. “TLC”: receive valuable consultation from the best.
  3. Simplify: health insurance can be complex, let us do the heavy lifting for you.

If you (or your business) need help navigating the health insurance or healthcare reform environment, contact us today. We’re available to help you in-person, online, and over the phone: 1(800) 617-0089.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.policyadvantage.com

Twitter: http://www.twitter.com/policyadvantage

Facebook: http://www.facebook.com/policyadvantage

YouTube: http://www.youtube.com/policyadvantage

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Blog: www.PolicyAdvantage.com/Blog

 

 

 

Essentials: The “Need-to-Knows” About the New Individual Health Insurance Marketplace

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NeedToKnowWith the on-set of healthcare reform, the landscape in the individual health insurance marketplace has changed dramatically. In this article, we’ll describe what you need to know in order to navigate the new individual segment of the health insurance industry.

Before we get to the good stuff, let’s review a very short background about the differences between individual health insurance and group health insurance. Briefly: if you know anything about the health insurance industry at all, you’ll know that these are two completely different ballgames when it comes to plan design. There are different rules. There are different tax incentives. There are different eligibility criteria. The list goes on. That’s a whole different article.

As an individual or business owner, you’ll want to know the ins-and-outs of both the individual and group health insurance marketplaces… but let’s emphasize that we’re looking at the individual segment only in this article. For certain small business owners, that’ll be most important anyways.

Here are the “essentials” of the new individual health insurance marketplace. This is what you need to know:

Guaranteed Issue Mandate

This is probably the biggest “game-changer” of them all. For years-upon-years, if you were going to apply for an individual health insurance plan, you had to go through a series of health-related questions in order to apply for coverage. There were 50, 60, and sometimes 70 or more questions. If you’ve applied for individual health insurance coverage before 2014, you know what this all about.

Starting in 2014, these health-related questions are all gone. You heard that right: outta’ here. It’s still difficult for many to comprehend. There are no more health-related questions on individual health insurance applications anymore. This is what is called “guaranteed issue” in the insurance world (big insurance word). All “guaranteed issue” means, is that if you apply for coverage, you have got to be accepted.

Q: How does this change the ballgame? A: You don’t need to have access to a group health insurance plan (employer plan) anymore to apply for coverage. This is huge (especially for those with preexisting conditions).

It can’t be emphasized enough how much this has freed-up individual choice in health insurance plans. You can literally pick any individual insurance plan from any company, and apply for coverage now. And it gets better for some of you: if you’re eligible for subsides at the new health insurance marketplaces (exchanges), you could see some massive subsidies that will help you pay for your premiums.

This all sounds fine and dandy, right? It is. But there are some important rules that need to be understood, and that leads us into our next important topics.

Open Enrollment Periods

In the past (before 2014), you could apply for an individual health insurance plan at anytime during the year. You could go out, you could pick a plan, you could apply for coverage. But… you might be denied coverage because of a preexisting condition (which you now know is against the law). So these days (2014 and beyond)… there’s now an “individual plan open enrollment period.”

Q: What’s an open enrollment period? A: It’s a time-frame when you can apply for health insurance coverage. If you’ve ever worked for an employer that has a company health insurance plan, you’ll know that you’ve usually got to apply for coverage (and make changes) during yearly enrollment. This is that exact same concept in the new individual health insurance marketplace. Except it’s a BIG enrollment: it’s the entire United States.

So, that being said, you’ve now got to apply during individual insurance open enrollment each year. This can be very important, because if you miss this enrollment period, you don’t get an opportunity to apply until the next Fall (unless you qualify for “special enrollment”… which we’ll cover soon). Need an appendectomy in the middle of the year? It’s too late.

The moral of the story: you want to make sure you know exactly when you can enroll in an individual health insurance plan: that’s during open enrollment each year. It’s a much different concept. And it’s important to note that open enrollment dates are the same for individual health insurance plans both on and off the new exchanges.

Special Enrollment Period

Now that you know what open enrollment is all about, the next thing that needs to be looked at is what is called a “special enrollment period.” A “special enrollment” is a time to enroll in the middle of the year (outside of the regular open enrollment described above), under specific circumstances.

Q: What are these “special enrollment” circumstances? A: They’re described as “life events” that can take place throughout the middle of the year. If you incur one of these “life events,” you’ll then be eligible to enroll in an individual health insurance plan outside of the regular open enrollment period. This is called a special enrollment.

Here are some examples of these “life events”:

  • You get married.
  • You get divorced.
  • You have a child.
  • You lose your coverage (changing jobs, etc).
  • You move out of the state where you currently get your health insurance.
  • You become a legal citizen or national.
  • … plus others.

You’ll want to make sure that you understand these qualifying “life events” if you ever need to utilize the “special enrollment period.” Additionally important: most events give you 60 days to enroll in a new plan from the time the “life event” takes place. However, a few of these events only give you 30 days. Make sure you know which event applies to you, and how much time you have.

Now that we know all about guaranteed issue, open enrollment, and special open enrollment… we want to take a brief last look at a few of the basic important concepts of the new individual health insurance marketplace. They are:

  1. Shared Responsibility
  2. Minimum Essential Coverage
  3. Essential Health Benefits

Shared Responsibility

Shared responsibility” is a technical term that has been coined in the healthcare reform law. All it means is that everybody has got to be “in” in order to make these new reforms work: the federal government, state governments, employers, and individuals. The “shared responsibility” provision applies to most individuals (there are a few exceptions) of all ages, including children. Almost everybody has got to have a health insurance plan from somewhere.

Minimum Essential Coverage

Minimum essential coverage” is the type of coverage that you have got to have in place in order to satisfy the requirements of the Affordable Care Act (healthcare reform). In other words, there is a standard of coverage that has to be met in order to meet responsibilities required under the Act. If you don’t want to pay the tax penalties, you’ve got to have this “minimum essential coverage.” There are health plans that are called “limited benefit plans” that do not meet the criteria of “minimum essential coverage.” In an instance where you only have a “limited benefit plan” in place, you’d be paying premiums for this plan that doesn’t conform, and then would also end up having to pay the tax penalty.

Additionally, if you’re one of those people that saw your rates go up in your individual health insurance plan over the past year (or even saw it cancelled), this is one of the reasons why. They’ve “raised the bar” on the required benefits in health plans (for additional info, read about the “metallic levels of coverage“). For this reason, rates have gone up. If you’re a higher earner that is not receiving a subsidy at a health insurance exchange, this can be burdensome.

Essential Health Benefits

These are certain new benefits “essential health benefits” that are mandated in the new “minimum essential coverage” plans described above. There is a series of them 10 of them. Count ‘em:

  1. Outpatient Care.
  2. Trips to the emergency room.
  3. Treatment for inpatient care in a hospital.
  4. Care before and after your baby is born.
  5. Mental health and substance abuse services.
  6. Prescription drug coverage.
  7. Services to help you recover if you’re injured or disabled: physical therapy, etc.
  8. Lab testing.
  9. Preventive services like counseling, vaccines, and screenings.
  10. Pediatric services which includes dental care.

Even though you may or may-not need some of these services, these benefits are now still required in all plans marketed in the individual health insurance marketplace. This is another reason that individual insurance premiums have gotten more expensive, and in certain cases, cancelled altogether. If you’re not getting any help with subsidies at the exchange, this can again be a “problem area.”

That’s it. Those are the basics of the new individual insurance marketplace. These are all of the “need-to-knows” so that you can begin to navigate this segment of the health insurance industry.

Additionally, you can coordinate various strategies within the new individual marketplace, so that you can put together a health benefits program for your small business that is affordable, and that your employees will appreciate.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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