2019 Health Insurance Changes

TIB 3CThe good news is that there are not as many changes, for health insurance in 2019, as there were this time last year,  The insurance companies, at least the ones I deal with, are not going to discontinue any of their individual plans.

However, there have been a couple of major changes, in health insurance, in the last year that force you to consider what you want to do in 2019.  While passive renewal is still going to happen on January 1, I highly encourage my clients to actively consider if they want that.

INDIVIDUAL MANDATE REPEAL

The first major change is that in the Tax Reform legislation, passed by congress last December, the Individual Mandate was repealed.  That means that Obamacare plans will still be available, for those who want/need them, but Americans are free to use other plans, if they choose to, without fear of any tax penalties.

SHORT TERM LIMITED DURATION INSURANCE (STLDI)

As you know, Short Term Medical (STM) plans were used as a loophole to avoid high cost Obamacare plans.  While they were not “compliant” with the Affordable Care Act and did not cover all of the benefits defined by congress, they were a few hundred dollars less expensive, each month.  Some people did what colonialist did with the Stamp Act when Britain tried to raise taxes on the colonies.  They just ignored the Individual Mandate penalty tax and dared the IRS to try to enforce it..

One of the last things that Mr. Obama did as president, after the election of 2016, was further limit STM plans to 90 days.  His goal was to try to force Americans to enroll in a more expensive ACA plan.  He did that by manipulating the power of the Executive Order.

Last year the Trump administration used an Executive Order to reverse the one made by Mr. Obama and gave the individual states the authority to determine how long a Short Term Limited Duration Insurance plan could be used.  However the PPACA states that the maximum length of a STLDI plan could only be 365 days.

Not all, but many of the states have chosen to allow STLDI plans for up to 360 days.  That option was available as of October 2 and will continue to be available to those who qualify indefinitely, or at least until the rules change again.

The catch is that STLDI are medically underwritten and do not include all of the benefits defined by congress.  Those people with pre-existing conditions, females who need maternity coverage or those who abuse drugs/alcohol will probably be better off sticking with an “Obamacare” plan.

However, other Americans, who enjoy relatively good health, do not need maternity coverage and do not need coverage for substance abuse, may want to consider using a STLDI plan for 2019.  They are much less expensive, but there is just one catch, other than medical underwriting.

Since STLDI is limited to 360 day policies, they do not provide coverage for the last 5 days of 2019.  They are renewable, but only if you still enjoy average health.  The risk one takes by using a STLDI policy is that if you are in the hospital the week after Christmas, you will be uninsured for 5 days.  That risk is minimal, but it is a risk.

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