In the last couple of weeks I have learned some more information about the future of health insurance. In this post I want to share the two most important facts that have come across my desk.
One of the most important things that I learned is that I, as an insurance agent, will have to start thinking more seasonally.
Under the terms of the Patients Protection and Affordable Care Act (also known by Obama supporters as the Affordable Care Act and Obama detractors as Obamacare) every American is required to have one of four Essential Benefit Plans unless they are otherwise exempt.
Young adults, under the age of 30, will have a 5th, “Catastrophic” plan, available. Those who work for employers with more than 100 employees will get their Essential Benefit Plan at work.
Small Business Employee, Self-Employed
If you are not eligible for Medicare or a group plan you will need to get your Essential Benefit Plan either through an Exchange or outside of the new Exchanges with the help of an insurance broker.
In October of 2013 a 6 month Initial Open Enrollment will be available. During that time you will be able to secure one of the Essential Benefit Plans without the need for medical underwriting.
After the Initial Open Enrollment you will need to wait until the next Annual Enrollment Period (AEP) to get major medical insurance unless your circumstances qualify you for a Special Election Period (SEP.)
The problem with waiting is that under the new law, unless you have one of the Essential Benefit Plans or are exempt from the law, you will need to pay a “penalty” when you file your taxes for 2014.
In other words, the federal government is not just telling you what plans you must get and how to get them. They are also telling you when you are required to get them.
Earlier this week I wrote, “Think Twice Before You Pay Obamacare’s Penalty.” I am not ashamed to say that I think that the PPACA falls terribly short. I hate the fact that the 111th congress and President Obama are so arrogant that they feel they have a right to tell me how I should spend my money. Unfortunately, the U.S. Supreme Court said that they have that right as long as the “Penalty” in the PPACA is viewed as a new tax.
The bottom line is that the Individual Mandate and government approved Essential Benefit Plans are the law of the land. Not to enroll in a plan is to voluntarily break the law. In order to remain a law-abiding American, I have no choice but to get one of the Essential Benefit Plans.
There is, allegedly, a way to postpone the inevitable by one year. I will write more about that possible exception after the final details about the Essential Benefit Plans and Exchanges are made public later this year.
When the final details are available, my intention is to share them in my weekly email. Click the banner below to have that email automatically delivered to you.
Starting in 2015, the ability to change between Major Medical and Medicare Advantage plans will be limited to Annual Enrollment Periods. The information that I have now say that the Annual Enrollment Periods for both Americans under the age of 65 who do not have group health insurance and those Americans who are enrolled in Medicare are anticipated to coordinate.
Medicare Advantage & Medicare D (Prescription Drug Plans)
Medicare Advantage and Medicare D plans have been part of the national Medicare scene for over a decade. Those who are part of The Greatest Generation or The Silent Generation should be used to the Annual Enrollment Periods by now.
They know that they need to review the renewal documents they get from their insurance company in September. They know that if the insurance companies made any changes for the next calendar year that are unacceptable, they must make adjustments during the 6 week Annual Enrollment Period or be content with their current policy for the next year.
Baby Boomers, who have recently retired, are not as experienced as their elders. They need to be reminded to review their health insurance plans for any changes in September if they have either a Medicare Advantage or Medicare D plan. If the plan they have makes any unacceptable changes, they only have the 6 week Annual Election Period in which they can make adjustments and still participate in the Medicare Advantage program.
Historically, the Department of Health and Human Services has a Disenrollment Period during the first 6 weeks of the year. During that time, an enrollee may not change from one Medicare Advantage plan to another. They are only allowed to change from a Medicare Advantage plan to the Original Medicare program.
During the Disenrollment Period they guaranteed to get a Medicare D plan if their prior Medicare Advantage plan also covered prescription drugs. However, they are not guaranteed to get a traditional Medicare Supplement (Medigap) plan unless they qualify for a Special Election Period.
The conclusion that I came to is that my marketing for Major Medical and Medicare Advantage will need to be coordinated with the Enrollment Periods that are authorized by the federal government.
I was also reminded that none of the government approved plans will pay for all the expenses associated with an injury or illness. Unless a person supplements his Essential Benefit Plan, bankruptcy is still a reasonable fate for those who do not have adequate savings.
Already, the insurance industry has developed some plans that will supplement the new Essential Benefit Plans. Some of the supplements that already exist include
- Accident Supplements
- Hospital Indemnity
- Critical Illness
- Disability Income
- Long Term Care
I anticipate that the insurance industry will develop more affordable supplements to government approved Essential Benefit Plans and Medicare.
Although the Essential Benefit Plans, Medicare Advantage and Medicare D plans will only be available during government approved enrollment periods, supplements will be available throughout the year.
If you want to build an insurance portfolio that is customized to your personal needs, you will be able to do so.