Last week I had a conversation with a nice lady. Unfortunately, she lives in an area that tends to believe the “little white lies” that politicians and the press tell about insurance.
She believes that Individual Health insurance is just as expensive as group insurance.
That may be true in some states but is not my observation in the states I work.
Most states mandate that maternity benefits be offered on group health insurance policies. However, many states only mandate that “complications” of pregnancy be covered on Individual plans.
Since pregnancy is an avoidable condition, in most cases that do not include rape, the cost for normal delivery is not covered. That allows the insurance company to remove the cost of delivery from the premium for everyone.
Maternity is treated by insurance companies who provide individual plans the same way they treat cosmetic and experimental treatments for those with group health insurance. They do not say that you cannot have those treatments. They just say that if you do, you will have to pay for them yourself.
The fees and charges from the medical community for routine pre-natal monitoring and delivery can easily exceed $10,000. Under the current system only those who are blessed with a baby are responsible to pay the OB-GYN and hospital. Their health insurance stands ready to help if there is an unexpected problem.
As a result, in many states, Individual policies are significantly less expensive than group plans. In this post I do not want to discuss the moral correctness of making maternity an “Essential Benefit.” For young ladies who are pregnant, maternity coverage is “essential.” The question arises whether it is “essential” for men and older ladies who no longer need maternity coverage.
Whether maternity coverage is “essential” or not is immaterial. Whether we like it or not, things are about to change. All of the 4 “Metal” plans that will be offered under Obamacare are required to have full maternity benefits.
When that happens those people who do not need, or want, maternity coverage have no options. In order to abide by the new law, they must purchase one of the government approved Essential Benefit Plans. When they do, their premium will be closer to the rates that are charged for group health insurance since maternity is no longer an optional benefit.
WHAT CAN YOU DO?
There is no doubt that the new federal mandates will benefit females who are in their child-bearing years. Unfortunately, since maternity costs will also be mandated for older women and all males, the premiums for individual health insurance will increase.
The best you can do, if you do not need maternity coverage, is delay the inevitable.
There is a loop-hole in the final rules for enrollment in the new Essential Benefit Plans. The Department of Health and Human Services has said that Americans who currently have unlimited Individual Plans may wait until their current plan renews in 2014 to enroll in one of the new Essential Benefit Plans.
Many, but not all, insurance companies have arranged with state departments of insurance to adjust the renewal dates of all of their policies to Dec. 31, 2014.
The result is that if you are responsible for your own health insurance, and wish to avoid paying for maternity costs, as long as your policy has adjusted the renewal date of your policy, you can delay enrolling in one of the new Obamacare plans until the annual enrollment in October, 2014.
(That gives HHS time to work the bugs and glitches out of the Federally Facilitated Exchanges. It also gives you an extra year with more affordable health insurance premiums.)
This is a sound strategy for many middle-class Americans but there are a couple of things you need to remember to make this strategy work.
- In order to take advantage of the “loop-hole” you must have a qualifying policy with an effective date prior to January 1, 2014. That means that if you are using a Short Term, Mini-Med or other Limited Benefit type of plan to meet your health insurance needs, and are not enrolled in Medicare or Medicaid, you need to adjust your plan before the year is over.
- If you are a female and have any risk of becoming pregnant in 2014, my advice is for you to go ahead and pay the higher premium for 2014. During the National Open Enrollment, go ahead and enroll in one of the Essential Benefit Plans. If you live in TX, I will be able to help you. However, if you live in another state, you will need to contact an insurance agent, navigator or assistor in your state who is familiar with the rules that are unique to your state.