Simplifying The Health Insurance Shopping

In the past, it was very confusing comparing plans with all the deductibles, co-pays and provider network options. Who can really make a choice and really know what they had just selected for themselves or their family? Now the law has changed the design of the plans to try to make it easier to compare the plans. By adding change to the process it is about as clear as mud, right? The good news, it’s really not that hard to figure out.

Making sense of health insurance has never been so easy. At least that is what the government thinks. Throw in a drastic industry change and just forget it. Hence all the delays, right? This gives another reason to work with a subject matter expert.

There are several easy ways to understand the new Metallic Plans going into 2014:

The metallic plans correspond with how rich or lean the plans are (in layman’s terms). At the end of the year, the maximum deductible one could pay is $6,350 for an individual or $12,700 for a family. There still is co-insurance (cost sharing), with the individual maximum out-of-pocket is $6,350. Depending on the carrier that amount can be up to three times that for a family maximum out-of-pocket. In this example, that would be $19,050. That is truly a bad year and is uncommon for that to occur. If that does happen to your family, please go play the lotto, the chances could be similar.

  • Platinum plans – Typically less than $3,000 max out-of-pocket per person ($1,500 max on some plans) with co-pays for first dollar coverage. This is very rich and the premium will be unaffordable to most.
  • Gold plans – Roughly $3,000 out-of-pocket maximum per person including your deductible (this can vary based on personalities of the insurance companies). Your deductible could start as low as $500 or be at the max at roughly $3,000. This plan will also typically includes co-pays at the doctor, specialist and prescription drugs at the pharmacy. The amount of the co-pays will vary by carrier and service and/or tiers.
  • Silver plans – Roughly $6,000 out-of-pocket maximum per person including your deductible (this can vary based on personalities of the insurance companies). Your deductible would typically start around $2,500 and go up to the max of $6,350 per person. This plan will typically include co-pays similar to the Gold plans.
  • Bronze plans – Some refer to this as a low-level plan. There is nothing wrong with this plan. It’s similar to the old Health Savings Account (HSA) plans. It is a high deductible and everything you do applies towards your deductible. All except for Preventive or Wellness exam (check policy for details). If someone is comfortable just know what their maximum out-of-pocket is without worries of co-pays and take a premium reduction for it, this is a great alternative to the other plans. This plan will be a maximum out-of-pocket of $6,350 for individual and $12,700 for a family. This will vary depending on the personalities of the insurance company you are reviewing.
  • Catastrophic plan – This plan is for the young. It’s basically mirrors the Bronze plans but it will have a doctor co-pay attached to the plan. It’s an alternative for the young to get something more affordable with a co-pay for first dollar doctor visit coverage. There are age limits to this plan. However, with certain financial hardship, those over the age limit may qualify.

For those who qualify for tax credit may also qualify for a cost sharing credit. This will reduce your out-of-pocket expenses on the Silver plan. There are several variables that will determine how much of a reduction in deductible and out-of-pocket expenses. See an insurance advisor for more details.

All of the above plans have first dollar preventive and wellness coverage. This means the insurance company pays for yearly exams. These are yearly exams that most take and are on a list of covered benefits. Just because you use the word ‘preventive’ or ‘wellness’ does not mean that is what is billed to the insurance company. It all comes down to the billing code that is used when it is sent to the insurance company. A short list will include:

  • Routine lab work
  • Pap Smear/Mammogram
  • PSA Screening
  • Colonoscopy
  • Immunizations

The purpose of this is for you to use it as a guide. Each health insurance company has their own personality and twist to how the plans will look. Each state will have certain mandates that will change some of the information above. Plans are always subject to change, along with many of the other delays that have already occurred and will occur with healthcare reform and the Affordable Care Act (ACA). Be sure to get advice from a true subject matter expert to stay up to speed and make educated decisions.

How Will the Health Insurance Marketplace (Exchange) Affect You?

Believe it or not, 2013 is half over. As we begin the 2nd half of the year, there are some big changes coming that may affect you whether you realize it or not. It wasn’t long ago when we had a big divide in our country over the healthcare reform and the passing of PPACA (Obama Care) in 2010. Since then, there have been small changes occurring in the health insurance industry, and most likely, your health insurance policy. However, a lot of these changes have gone unnoticed by most people.

That is all about to change! Starting January 1, 2014, four of the biggest changes in the reform legislation are set to be implemented. This is when the “rubber will meet the road” and it all goes from theory into practice. Whether or not this is a big success or another financial burden on our national debt, only time will tell. But, what’s important now is to understand what is expected of you and/or your business and which decisions are best for you.

The 4 biggest changes are:

  1. Individual Mandate- The PPACA requires all American citizens and legal residents to purchase qualified health insurance coverage. If not, then you will pay a minimum fine of $95 up to 1% of your household income. The fines increase in 2016 to $695 per person or 2.5% of income up to $2085.
  2. Guaranteed Coverage- Coverage cannot be declined due to pre-existing conditions. For persons who have been unable to get coverage on the individual market due to pre-existing health conditions, they will now be able to get the same coverage and price as a healthy person the same age (smokers are charged additional).
  3. Health Insurance Marketplace (Exchange)- For individuals and small businesses, the Federal government and some states will provide an Exchange to access health insurance in addition to the traditional method of an insurance agent/broker. In fact, some insurance agents/brokers will provide plans both inside and outside the Federal or State Exchange. The two important points are 1.) an individual can only qualify for a subsidy and 2.) a small business can only qualify for the small business tax credit through a Federal or State Exchange. The Enrollment for the Exchanges opens October 1st this year.
  4. Pay or Play Rule- For businesses with 50 (FTE/Full-Time Equivalent) employees or more, an affordable “minimum essential coverage” health plan must be provided to their employees or pay a fine. If a business does not provide qualified coverage, the penalty will be the lesser of ($2000 times the # of F/T employees minus 30) or ($3000 times the # of F/T employees that obtain a subsidy for coverage through the Exchange). This penalty is determined on a monthly basis so will pay 1/12 those amounts times the # of months they are not in compliance.

These are the biggest, but far from the only, changes that are coming in 2014. How will you be affected? Do you know the best approach to take? For some, you may not see much difference. For those individual and businesses who want answers to your questions, my suggestion is to speak with an agent/broker that will be providing coverage both inside and outside the Exchange to compare your options and help you make the best decision.