Your Information May Be Out Of Date


The Two Extremes Of Health CareThis week, I was called by someone who “used to be” an insurance agent.  I was not able to fool him, so he said.

My first thought was, “I do not try to fool anyone.”  Some agents are trained in high pressure sales tactics but that is one of the reasons I became an independent agent.  It does not matter to me what someone buys.  I am of the opinion that it is an agent’s job to answer questions about health insurance and help people with the paper-work.

Although I will offer my opinion about which plan is best for someone, I also understand that adults know better than I what their individual needs are.  If someone elects to use a plan different from what I recommend, I do not get upset but am happy to help them complete the required paper-work.

If there is a problem in the future, I will try to help them get a solution without an “I told you so.”   In other words, I conduct my business with the Will Rogers philosophy of, “Give a man enough rope.”

That philosophy goes like this.  If you give a man enough rope he will either hang himself or learn to be successful with rope tricks.  I don’t anticipate any of my clients committing suicide or performing on a Vaudeville stage, but I do expect people to make informed decisions that they can live with.

I’ll be honest with you I had to “bite my tongue” to keep from starting an argument with that man.  The fact is that there are hundreds and thousands of people who failed at being an insurance agent.   I just happened to be one who succeeded.

That does not mean that I consider them any less of a human.  It just means that they tried an industry and did not, for whatever reason, decide to make it a career.  I can appreciate their choice they made.  If I were honest, I would have quit being an insurance agent many times over the last 30 years.  There were a few times that I actually tried but those who remember “The Godfather” will understand it when I say, “Just when I thought I was out, they pulled me back in.”

After I calmed down from the obvious provocation today, I realized that there are hundreds of people who are about to make a decision on health insurance based on information that is out of date.  I know how confusing the ever-changing laws, rules and regulations can be and I work in the industry.  I can only imagine how confused and frustrated one can get who does not deal with health insurance every day.

The point that I want to emphasize is that although the “Individual Mandate” is no longer an issue, things are not the same as they were 5 years ago.  All of Obamacare was NOT repealed.  The ONLY thing that was changed was that the threat of a tax penalty is no longer aimed at Americans.  Every other thing is exactly as it has been for the past 5 years.

With the repeal of the Individual Mandate, on January 1, 2019, Americans will have more choices in health insurance than they have had for 5 years but those choices are vastly different.  In this post I intend to list a few things that you must consider before you commit to a plan for 2019.

GUARANTEED ISSUE v. MEDICALLY UNDERWRITTEN

Affordable Care Act (ACA/Obamacare) plans are “Guaranteed Issue” plans.  They are available to people regardless of their health history.  However, before you enroll in one, there are a few things that you must consider.

  • In order to qualify for ACA approval, all plans must include all 10 of the “Essential Benefits” as defined by congress in the Patients Protection and Affordable Care Act.  In most cases those benefits make sense for everyone, but the “Essential Benefits” includes maternity benefits for all males and post-menopausal females.  It also requires everyone to pay for substance abuse coverage whether they abuse chemicals or not and dental coverage for every child under the age of 19, including new-borns and toddlers who still have their primary teeth.
  • ACA plans must provide coverage for Preventive Services without a deductible. Whether you use that benefit or not you still have to pay for it.
  • Most ACA plans, at least in the Individual Market, are managed care type of plans.  That means they are either HMO or EPO plans and provide no benefit, at all, if you use a provider who is not in your network for non-emergency health care.

Don’t get me wrong, ACA plans are better than the proverbial, “poke in the eye with a sharp stick” but they are also the most expensive plans available in the Individual market.

With the repeal of the Individual Mandate, Americans are free to use non-ACA compliant plans and supplements without fear of a potential tax penalty from the IRS.  However, that option may not be right for everyone either.  Non-ACA plans…

  • Have medical underwriting designed to weed out those who remained uninsured until they got sick and then wanted help from everyone else to pay their medical bills.  Words like, “Medical Underwriting” and “Pre-Existing Condition” are scary, but they do not have to be.  Basically it is a warning.   Those who know that they are going to require high medical costs, or think they will, in the next year should enroll in an ACA compliant plan.  However, those who are in average health, may want to consider a less expensive non-ACA plan for the following year.
  • Do not automatically include all of the benefits that congress calls “Essential”.  They are more like what “health insurance” used to be.  Instead of paying for the benefits that the government wants you to have, you pay only for the benefits you want/need.  (Just keep in mind that none of the plans that I work with offer maternity or substance abuse coverage.  If you need those benefits, you will need to enroll in an ACA plan during an Open Enrollment Period or a Special Election Period, if you qualify for one.)

GUARANTEED RENEWAL v. ANNUAL RENEWAL

In addition to adding the “Essential Benefits” and eliminating “Medical Underwriting” from the world of health insurance, the ACA made one other massive change to the system.  Before the ACA went into effect, Major Medical policies were written on “Guaranteed Renewable” contracts.  That means that they only thing the insurance company could change, from year to year, was the premium.  They could make no changes to the plan benefits whatsoever.

However, under the ACA all Major Medical plans are written on Annually Renewable contracts.  That means that insurance companies can change both the plan premiums and benefits they cover, from one year to the next.

Some non-Major Medical supplements are still written on a “Guaranteed Renewable” type contract.  Those people who elect those type of plans do not have to deal with enrolling in a plan every year.  As long as they feel that their renewal premium is fair for the benefits the plan offers, they do not have to do anything.

Many people have asked me, “When will Guaranteed Renewable health insurance be available again now that the Individual Mandate has been repealed?”

I understand that question, but I have to try to explain that the Individual Mandate only dealt with the government trying to force Americans to buy a mixture of benefits it wanted them to have.  The prohibition for the old Guaranteed Renewable contracts is found in a different section of the PPACA.  As long as the ACA remains the law of the land, there will be no “Guaranteed Renewable” Major Medical contracts.

Those who want plans where they do not have to submit an application every year and know that their benefits will not change from year to year will be forced to build a portfolio of health insurance supplements rather than a plan that covers all medical risks in one policy.

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