Still need health insurance coverage? You still have options. Call today.

Health Insurance Premiums Down Nationwide for 2019

The Trump administration is taking credit for a recent 1.5 percent drop in 2019 premiums for the second-lowest silver plan under Obamacare. This is the benchmark health care coverage level that subsidies are based upon. This year, the largest premium reduction is in Tennessee, with a 26.2 percent decrease. Seema Verma, Administrator for the Centers for Medicare and Medicaid Services (CMS), says that efforts by the administration to stabilize prices led to the reduction. The big picture is more complicated, however.

This year, the same plan experienced a 37 percent rate hike, and last year the premiums rose 25 percent. The latest drop is actually a slight downward adjustment to overall increases in premiums for those covered under the Affordable Care Act (ACA) for the past two years. Insurers say that uncertainty about previously approved government cost-sharing reimbursements and enforcement of the individual mandate were factors in the increases. The nonpartisan Kaiser Family Foundation determined that premiums would have risen only slightly during both years if not for changes in policies affecting the ACA.

At one point in 2017, it appeared that several counties would not have access to an insurance provider under Obamacare. The CMS took steps to stabilize the insurance market, including reducing burdensome and overlapping regulations. Allowing reinsurance programs in several states was another step that gave insurance providers more confidence in the ACA. Reinsurance provides state and federal funding assistance for exceptionally high claims that erode insurance companies’ profits. ACA premiums will decrease in 2019 for states that have reinsurance programs, but they’ll still be higher than they were before 2018.

This year, the Trump administration has eliminated the penalty for those who go without health insurance. The original legislation was designed to allow insurers to charge lower premiums due to the high numbers of insured. In addition, short term health plans have been expanded under new regulations, allowing people to purchase these plans for up to nearly a year. One drawback here is that almost none of these plans cover pre-existing conditions, and most of them don’t cover substance abuse treatment, pregnancy and childbirth care, or prescription drug costs. Critics are also concerned that short term coverage could draw people away from major medical plans that need high enrollment to keep rates down.

Insurers lost money in the beginning under the ACA, but increased enrollment each year was expected to make up for the initial cost to insurance providers. Aside from withholding cost-sharing funds, the administration also cut funding for Obamacare marketing and outreach by 90 percent. Surprisingly, the overall number of enrollees grew to 8.7 million even without this support. The large rate jump last year was meant to accommodate the cancellation of cost-sharing reimbursements for insurers, and participating insurers began to turn a profit.

To benefit from lower premiums, some people will have to change to a different network or set of healthcare providers. States are required to ensure adequate networks and reasonable availability of providers. For the benchmark silver plan, the actual cost may not decrease as subsidies go down along with lower rates.

The decrease in rates applies to the 39 states that participate in the federal exchange site at The District of Columbia and 11 states run their own exchanges. Although rates have increased in some states as they’ve gone down in others, there’s also a trend for premiums to have less variation from one state to another, making them more equitable.

The profitability for insurance providers should help keep insurers in the marketplace, which in turn should keep current customers coming back – while attracting new business to the table. Per Seema Verma, 23 more insurers are participating on the exchanges for 2019, and those already participating are expanding their geographic reach. Although small, the 1.5 percent reduction in average premiums nationwide represents a big change from the increases we’ve gotten used to, and it could be a positive sign for the future of the ACA.

New HRA Rules Could Boost Choice for Employers and Their Workers

Quite a few of the healthcare policy decisions made by the Trump administration have been mired in partisanship and acrimony, but this is certainly not the case with a proposed rule recently published on the Federal Register. The rule in question involves the expansion of health reimbursement agreements, known as HRAs, that would benefit Americans by means of an employer-based system for reimbursing out-of-pocket healthcare expenses.

HRAs had been put on ice by the Obama administration years ago, but an executive order signed by President Trump in 2017 directs the IRS as well as the Health and Human Services department to look for ways to expand them. 

The current proposal seeks not only to refresh HRAs but also to create a new type of benefit for employees who want to cut down on the medical spending that comes out of their own pockets. In the proposed new version of HRAs, small business owners stand to benefit the most, although there may be some advantages for large companies to consider. Before we get into the proposed changes to HRA rules, it helps to know how they work.

The Employer Role in Funding HRAs

As the situation currently stands, employers are tasked with the heavy lifting of HRAs because they are expected to set aside cash for workers, which they can then use throughout the year. In essence, this funding works like a feature of group health insurance coverage, and it can be used to cover qualified medical expenses that would not normally be covered by existing policies. To an extent, HRAs act like external supplements that make health insurance more comprehensive. Qualified expenses may even include overt-the-counter items.

HRAs only work in conjunction with the group health insurance programs that employers offer. They’re not available to individuals on the private market due to Affordable Care Act restrictions against products that don’t include coverage for essential health benefits. In other words, HRAs don’t count as minimum essential coverage, so they’re not available as standalone products outside of an employer setup.

Proposed Changes to HRA Rules

Here are some of the proposed improvements to HRA programs:

Excepted benefits: Under this proposal, a separate HRA could be set up by employers to let workers pay for dental and vision plans as well as short term health insurance policies. This improvement would be capped at $1,800 per year. This measure could be considered a progressive overhaul of ACA rules because of the flexibility it would offer to American workers.

Individual health insurance purchase: Employees could use HRA cash to purchase their own health insurance, but doing so would require them to obtain plans that provide major medical coverage, and the employer would be barred from offering traditional plans. All HRA offerings would be voluntary, as would participation in an employer-sponsored HRA.

Allowing expenses beyond the HRA cap: Should employees spend more on healthcare than the HRA allows per year, business owners could approve a reasonable payroll deduction program to cover these expenses, but only if those expenses are related to paying for major medical insurance premiums. It should be noted that this provision is voluntary for both employers and employees.

A significant aspect of the HRA rule proposal is that Republicans are now focused on giving Americans more flexibility in terms of choosing health insurance options. The days of seeking a full repeal of the ACA are over, particularly in light of the midterm elections that secured a Democrat majority in the House. What lawmakers are working on now represents reasonable rather than political improvements that take into consideration all aspects of the health insurance industry, particularly as it applies to working Americans.

Public comments are welcome on the proposed rule until December 28. If the rule becomes finalized, changes would take effect for plan years starting January 1, 2020.

New CMS Rule Would Require Drug Companies to List Price in TV Ads

One in five Americans will go without the health care he needs because he can’t afford it. To decrease the out-of-pocket cost for patients, the federal government wants to make drug companies include in television ads the price of drugs and biological chemicals covered by Medicare and Medicaid. Pharmaceuticals companies, who say the law interferes with their right to free speech, want to implement their own plan. Currents laws require commercials to list side effects but not cost.

The new regulation, an offshoot of the American Patients First Blueprint, would require drug companies to show the cost of a 30-day supply for chronic illnesses, like diabetes, or a routine round of medication, like antibiotics for infections. The information would show up on the top of the commercial, and the Department of Health and Human Services would monitor offenders. Drugs that cost under $35 per month would be exempt. 

Other initiatives of the “blueprint” include improving competition among drug companies, offering incentives to companies that lower drug prices, encouraging price negotiations and lowering costs to consumers. The Centers for Medicare and Medicaid Services is deciding if the rule will apply only to television or if it will also be a requirement for social media, radio, newspapers and magazines.

Health and Human Services (HHS) Secretary Alex Azar also wants to transfer some drugs paid for by Medicare Part B to Medicare Part D, the private drug portion of Medicare that allows more competition than the federally funded Part B. While that might lower costs for some patients, it could also cause a backlash from pharmaceutical companies who want to protect their profits. The new rule would not apply to over-the-counter medications covered by Medicare.

Even with prescription drug coverage, patients must pay full price for any drug that is not on their formulary – the official list of covered drugs provided by an insurance company – and list prices determine which drugs go on the formulary list. According to HHS, the 10 most commonly prescribed drugs in the United States range from $550 to $11,000 per month. People need to know the cost before it’s time to pay.

HHS Secretary Azar says that putting cost-related information on an independent website is not the same as listing it on advertising. Drug companies argue that disclosing the price of expensive treatments might discourage people from seeking the care they need.

The proposal to include pricing in TV ads has received bipartisan support. A poll by the Kaiser Family Foundation reported that 76 percent of Americans approve of the plan. There is also agreement among legislators and patients that rebates, which are payments made to employers, state and federal government, and other pharmacy benefit managers, require examination and transparency. Experts say few of the benefits from rebates change out-of-pocket costs for consumers. 

New Waivers for States Could Signal Flexible, Affordable Health Insurance Markets

On October 22, the Centers for Medicare & Medicaid Services (CMS) announced that states would be given authority to relax some of the guidelines for insurance under the Affordable Care Act (ACA). Framed as giving states “the flexibility to lower premiums and increase choices” for consumers, it’s also a weakening of ACA regulations that are designed to keep the insurance exchange healthy and premiums affordable. But it could spell innovation in states where ACA regulations have strangled the private market.

The new guidelines are called State Relief and Empowerment Waivers. To understand what these changes mean for the individual, it’s necessary to look at the fact sheet provided with the announcement. One change is that states will no longer be required to maintain a certain number of people insured by Obamacare plans when applying a new health insurance system under the waiver. Instead, states are allowed to provide other options to consumers, and these alternatives will compete for enrollment with ACA coverage.

A guarantee of coverage still exists under the Affordable Care Act, but some health analysts believe that populations may lose access to affordable health insurance, particularly if states move toward high-risk pools for people with chronic health problems. 

One theme that runs throughout the CMS statement is assurance of coverage for those with pre-existing conditions – it occurs three times in the text. However, there’s no mention of the concurrent authorization to raise rates for that coverage. The press release only mentions protecting those with pre-existing conditions and giving them access to the same level of care. 

Another worrisome change is the power given to states to decide who will get insurance subsidies. According to CNN, experts believe that older, sicker individuals or low-income citizens may actually end up with fewer choices as short-term plans lure young, healthy people away from the ACA marketplace. It should be noted, though, that enrollment in short term plans has been historically low compared with full major medical benefits. Some analysts believe that the Trump administration’s bolstering of short term plans will have minimal impact on the private market.

The new guidelines also put the emphasis on providing access to healthcare coverage to as many people as possible instead of covering as many people as possible. States will now have the flexibility to design alternatives to the ACA, consider improvements and implement new models. The goal with these initiatives would be to increase health insurance coverage by facilitating “competitive private coverage.”

Rules are being relaxed in order to give consumers more choice and better options for meeting individual needs, not to mention tightening federal spending on healthcare. 

The impact of these changes won’t be felt immediately, and 2019 open enrollment won’t be affected. Depending on the number of states applying for waivers and their specifications, changes could start happening by early 2020.

Mega Merger for Aetna and CVS 

After drawn-out legal proceedings with the Justice Department, CVS Health and Aetna have finally agreed to a gigantic $69 billion merger deal. provided that the companies divest part of the business prior to officially merging. This merger is the most recent in a spate of huge health insurance and health provider buyouts and mergers, which included the $52 billion buyout of pharmaceutical benefits company Express Scripts by Cigna, one of the largest health insurers in America. 

This merger is one of the largest in history, as CVS is the biggest retail pharmacy and the second-biggest individual prescription drug plan provider in the United States. Aetna is the third-largest health insurance company in the U.S. and the fourth-largest insurer of individual prescription drug plans.

Though Aetna and Cigna have unsuccessfully attempted two healthcare mergers with Humana and Anthem before, which were both blocked by the Department of Justice between 2016 and 2017, this acquisition signals a consolidation of health care services under larger umbrellas. To some, the consolidation is worrying. 

The Justice Department has cleared the merger of any antitrust concerns, but advocacy groups still believe that the reduced competition this merger creates could lead to reduced quality of healthcare products and services. The merger is under intense scrutiny from antitrust lawyers and the Federal Trade Commission to ensure that proper regulations are put in place.

The Justice Department’s tentative approval was conditional on Aetna divesting one section of its business: its Medicare Part D prescription business. Aetna’s Part D business focused on providing individual Medicare prescription drug plans in 16 Medicare Part D regions in the United States. These 16 regions covered parts of 22 different states, and Aetna contributed to a large share of all prescription drug plans in those regions. 

In the Department of Justice’s reasoning for demanding that Aetna divest its Part D business, there appears to be a concern for anticompetitive effects due to CVS and Aetna both providing plans in many of those areas. If Aetna and CVS were to merge and not divest these plans, then the lack of competition in these regions could drive innovation down and prices up. Currently, Aetna and CVS have agreed to these terms and Aetna is in the process of unloading its Part D business.

Aetna and CVS maintain a positive outlook on what this merger could accomplish for consumers. They predict that CVS stores could become the go-to spot for prescriptions and basic medical treatment, as the merger provides for both under one comprehensive plan and CVS’s 10,000+ stores provide convenient access points for these services. 

The enhanced connectivity of a single company may also be able to deliver more affordable care. However, the integration of companies this large may take more time than expected. With thousands of employees around the United States, streamlining the transition may prove challenging. 

5 Things to Know About Open Enrollment 2019

This year marks the sixth enrollment season for the Affordable Care Act, which set aside a period each year during which people could buy health insurance or change their existing plans. While job-based health plans have their own signup period, everyone else must adhere to the official time frame laid out by the government, whether you buy a plan from a government exchange site or off the exchanges. Enrollment can be a tricky time of year, especially since it falls amid major holidays in the U.S., but it’s important to keep track of big changes so you can prepare. Here are five things to know about open enrollment in 2019.

1 – You’ll Have Six Weeks

In most markets, the 2019 open enrollment period will be last just over six weeks long, which is the same length as last year’s sign up period. This year’s federal open enrollment will begin on November 1 and close on December 15. Any major medical plan bought during this period will go into effect on January 1, 2019.

Some states have different regulations about open enrollment, so residents of those states may have a little more time to sign up. These states host their own Obamacare exchange sites, which gives them more freedom in setting enrollment periods at the end of the year. Last year, some states, like California, allowed people to sign up for health plans all the way through January 31, which was the original deadline at the federal level. State-based exchanges exist in:

  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Idaho
  • Maryland
  • Massachusetts
  • Minnesota
  • New York
  • Rhode Island
  • Vermont
  • Washington

Not every state with a state-run marketplace offers an extended deadline, so check with your state’s exchange site to make sure you understand the signup timeframe. And while some states have extended deadlines, all open enrollment periods for private, non-job-based coverage start on November 1 nationwide.

2 – Premium Changes Will Depend on Your State

Details on premium costs for health insurance in 2019 haven’t yet been finalized. However, rate information that has been filed so far suggests that prices in some markets may stay fairly similar to their 2018 levels. In other markets, however, consumers could see large jumps in their premiums while others will see nominal increases or even decreases.

In Nebraska, for example, the average proposed rate is up just 2.2 percent from the average rate of a 2018 health insurance plan while Pennsylvania residents might see plans increase 0.7 percent higher than 2018’s average premiums. But in Iowa, Oklahoma and Wyoming, the average proposed rates actually show a decrease compared to this year’s premiums.

On the other end of the spectrum, Missouri, California, Indiana and District of Columbia shoppers may see increases in the double digits. California, for example, is averaging a 17 percent increase in premiums for unsubsidized bronze plans on their exchange for next year.

Washington residents might not experience quite as much sticker shock, but many policyholders will still feel the pinch. Statewide premiums across all metal levels may jump just under 14 percent. The least expensive plan on Washington’s exchange could be 21 percent higher than last year’s cheapest bronze plan. The bottom line here is that you need to shop around in 2019. Take open enrollment as an opportunity to explore your health insurance options on and off the exchange.

3 – You May Have New Options for Insurers

As of July 2018, no insurance companies had announced intentions to stop offering major medical insurance on the Obamacare exchange. This is a noticeable change from the past few years, during which insurer exits were commonplace, and there were fears about whether some counties would end up with no on-exchange plans.

Instead, several insurers are planning to come back to the marketplace in 2019 or are joining the exchange for the first time. This may be because insurers are feeling more confident about participation in the Obamacare system, and those who have been offering healthcare coverage through the marketplace are starting to turn profits from their participation.

After a few years away, Presbyterian is once again going to participate in the New Mexico marketplace in 2019. Some areas of Michigan, Florida and Arizona will now have access to plans from Oscar Health. Wellmark is coming to Iowa, Medica is joining the marketplace in Oklahoma, and Bright will serve customers in Tennessee. These are just a few of the states that will have new options on the ACA marketplace during the upcoming open enrollment period.

4 – You May Have a Hard Time Finding Help

The Affordable Care Act allows organizations to help people sign up for major medical coverage. These people or groups are called navigators. In states that use the federal health insurance exchange, the government provides funding to support navigators.

During the enrollment period for a 2017 health insurance plan, the federal government allotted $62.5 million to the navigator program. For 2018 sign up, the Trump administration reduced this amount to $36 million. Now, for this year’s open enrollment, the maximum amount of funding that the federal government will grant to navigators is $10 million. The $10 million must stretch across all 34 of the states that rely on the federal exchange. A shortage of funds means that there may be significantly fewer unbiased groups and individuals offering help with Obamacare signup this year. Navigators aren’t licensed agents, giving them an edge in that they don’t represent specific insurance companies. Their job is simply to help consumers understand the process of enrollment.

Furthermore, there are new federal regulations regarding navigators. Previously, each state had to have two local entities that acted as navigators, and at least one of them had to be a nonprofit organization. The federal government has changed that rule for 2019. In fact, the new regulations don’t even require a navigator to have a physical presence in the area that it serves. Instead, the navigator can provide help from a distance, such as through an online interface.

Although you can sign up for major medical coverage without relying on a navigator, this assistance often proves invaluable for those who could use an extra hand with filling out applications and evaluating plan options. If you’ve relied on a navigator in the past, you may find that the nonprofit group you’ve used previously is no longer available.

5 – Simple Choice Plans Are No More

Another challenge facing plan selection in 2019 is that most exchanges will no longer highlight Simple Choice plans. In 2017 and 2018, the federal marketplace featured plans with this designation as a way to help simplify the decision-making process for consumers. All Simple Choice plans followed set guidelines for their deductible, coinsurance and out-of-pocket maximum levels. In most markets, these plans also provided some services for a copay instead of requiring that they be subject to the deductible.

However, the Trump administration has decided to remove the Simple Choice designation for Obamacare 2019. When shopping the healthcare marketplace, you’ll have to compare each plan to find the one with the best rates and benefits for your needs. You may find that insurers are offering more plans than ever before and that the plans seem to overlap each other in many ways. Sorting through the various options could prove rather challenging.

Some people may notice positive Obamacare changes in the coming enrollment season, such as lower premiums and more insurers in their market. On the other hand, many people will face higher premiums, and some may have a more difficult time with the application process. Positive changes or not, it’s important that you shop for and choose a plan before the end of open enrollment. Your 2019 health coverage depends on it.

Overview of Major Medical Insurance

When it comes to health insurance, you may be confused by the many different terms used by insurance companies that describe your coverage. You have probably heard terms like “major medical insurance,” “minimum essential benefits,” or other terms that may not make sense to you. One of the most important terms to understand, however, is major medical coverage.

What is Major Medical?

Major medical insurance is coverage that pays for medical treatments ranging from routine preventive care, like vaccines, to serious illnesses and injuries, like a broken leg. Historically, the term was used to describe comprehensive health plans that paid for necessary care. When the Affordable Care Act (ACA or Obamacare) was passed, the term “minimum essential coverage” was used to describe necessary care. There is a difference between minimum essential coverage and major medical, though. Under Obamacare, your healthcare plan must cover the 10 essential health benefits to count as a qualifying major medical plan. It must also offer all the consumer protections guaranteed under the law.

All new private plans – that is, the coverage people get outside of work – sold on and off the health insurance exchanges after March 23, 2010, must adhere to the ACA’s standards, which include covering a host of essential benefits. In short, major medical health insurance is “standard” or “regular” health insurance. It’s likely what you think about already when you think about health insurance.

Deductibles, Co-Payments and Co-Insurance

Like all forms of insurance, health insurance comes with a set of cost-sharing requirements. Major medical coverage includes a monthly premium – what you pay each month for the coverage – as well as copayments, coinsurance and an annual deductible. These costs vary by plan. For instance, you might have a $6,000 deductible for your coverage. That means that you must meet this amount before your health plan pays its portion of your bills.

Once you’ve paid your deductible, the insurance company starts to pay its share depending on the structure of your plan. Coinsurance is a percentage of a medical bill. Co-payments are a predetermined amount you pay for various services. For instance, if your major medical insurance requires you to pay 20 percent coinsurance each time you visit a doctor, and the bill for a visit is $100, you’ll pay $20 (assuming you’ve already met the deductible). Many plans don’t count regular office visits against your deductible, though. You might have a plan that allows you to just pay the coinsurance rate or copay when you see your doctor for something routine, like a sore throat.

Out-of-Pocket Maximums

One of the protections included in the Affordable Care Act was that all qualified healthcare plans must have an out-of-pocket maximum. This means that your insurance will have a limit of what you must spend out of your own pocket for medical costs for the year. Once you’ve reached the out-of-pocket maximum, the insurance company will pay 100 percent of your covered medical costs for the year. Note that this requirement only refers to the essential health benefits. A covered benefit like acupuncture may not be subject to this requirement, so it wouldn’t count toward your maximum spending out of pocket. For the most part, though, this cap comes in handy.

The out-of-pocket cap is set by the government each year. The limit in 2019 is $7,900 for individuals and $15,800 for families. Some plans may have lower caps, but no plan can have a higher cap than these.

Essential Health Benefits

Major medical coverage includes 10 essential health benefits. These benefits are required to be included in all major medical policies, but that doesn’t mean that every plan covers every benefit the same way. Some plans may have more generous coverage for physical therapy, for example, or some plans might have tighter restrictions on prescription drug coverage. Every plan must cover these benefits, but the degree of coverage will vary. You’ll find the following benefits in major medical plans:

  • Emergency room visits
  • Inpatient hospital care
  • Laboratory tests, including X-rays, blood-work and other diagnostic testing
  • Maternity and prenatal care during and after delivery
  • Medical devices and rehabilitative care, including physical and occupational therapy as well as speech-language pathology, psychiatric rehabilitation, walkers, canes and other devices
  • Mental health and substance abuse treatment
  • Outpatient care (also called ambulatory care)
  • Pediatric services, which includes dental and vision coverage for children under 18
  • Prescription drugs
  • Preventive services

Except for preventive care, these services will be subject to the cost-sharing structure of your health plan. A trip to the ER might cost $100, for example, or you might have to pay 30 percent coinsurance when you visit your therapist.

Major medical plans must cover preventive care for free. It’s not “free” in the sense that you pay nothing – since you’ll still pay your monthly premium for the coverage – but it’s free in the sense that you won’t be charged additional cost-sharing (like a copay). Flu vaccines, annual wellness checkups, cancer screenings and child well visits are examples of preventive care that won’t cost anything extra out of pocket with a major medical plan.

Employer Coverage

If you obtain health insurance from your employer, it is more than likely major medical coverage. In fact, large employers must offer coverage that meets the requirements of the ACA under the Obamacare employer mandate. If you do not receive health insurance as a benefit from an employer, you do have other options. You can purchase your insurance from the exchange in your state, where all policies will be considered major medical insurance. There are also major medical plans sold as off-exchange plans, but it’s important to confirm that a plan offered off the exchange includes the essential benefits required under the ACA. Plans that don’t meet this requirement are required to tell you in clear language.

Medicare, Medicaid and Grandfathered Plans

Although most Medicaid plans are considered major medical, you may only qualify for a limited plan, such as one that covers pregnancy only. In that case, your Medicaid plan would not be considered major medical coverage. There are also health plans that were grandfathered or grandmothered as part of the ACA. Although you can no longer purchase these plans, you can keep a grandfathered plan for as long as they are not changed significantly. Grand-mothered plans may remain in place until December 31, 2019, although states and insurers can cancel them at any time. Grandfathered plans had to be in place as of March 23, 2010 and met special requirements when the Affordable Care Act was put in place. Grand-mothered plans were those that were subject to federal transition policies, which means they were required to transition into compliant policies by certain deadlines. This deadline has been extended several times by the federal government.

Medicare Part A counts as minimum essential health coverage under the Affordable Care Act. If you have Part A, you’ve met the requirements of the law. Part B alone doesn’t count. Since you need both Parts A and B to hold a Medicare Advantage plan, you’ve also met the law’s requirements if you have an Advantage plan. These plans can be considered major medical health insurance because they cover your healthcare in a comprehensive way, though original Medicare (Parts A and B) is less comprehensive than ACA-approved major medical policies.

Tax Penalty

One of the most controversial aspects of the Affordable Care Act is a mandated tax penalty that’s assessed if you don’t have major medical coverage. The Obamacare 2019 penalty has been eliminated with other legislation, but the tax penalty is still in place for 2018. This means that if you do not have qualified health insurance, whether through the healthcare marketplace, your employer or off-market, you will be required to pay the tax penalty when you file your income taxes next spring.

The penalty for not having health insurance is $695 per uninsured adult and $347.50 per uninsured child, or 2.5 percent of your taxable household income, whichever is greater. Starting January 1, 2019, this penalty will be zeroed out, though the mandate itself remains in effect.

What You Need to Know About Obamacare in 2019

Despite numerous declarations from the Trump administration about repealing the Affordable Care Act, widely known as Obamacare, the ACA will still be in effect for next year. Whether this is your first time to the private health insurance market or you’re a seasoned customer looking to make a change for the upcoming year, here’s what you need to know about Obamacare in 2019.

Enrollment Lasts about Six Weeks

Whether or not you plan on buying your insurance from one of the state exchanges, the open enrollment 2019 date is the same for everyone: November 1, 2018, through December 15, 2018, a period of about six weeks. Unless you qualify for a special enrollment period – due to a major life change, such as marriage, the birth of a child or job loss – you can only buy major medical insurance (on or off the exchange) from November 1 to December 15. Coverage bought during this period starts on January 1, 2019.

Premium Rates Are Down Across the U.S.

In a twist to the usual doom-and-gloom projections for premium rates on the Obamacare exchanges, the Centers for Medicare and Medicaid Services – which administers the federal marketplace – released a report on October 11 noting that premiums would be dropping across the country for next year. Nationwide, average premiums for the second-lowest cost silver plan (the benchmark for subsidies) will be dropping by about 1.5 percent. Last year, premiums for this health plan averaged an increase of nearly 37 percent.

According to the Kaiser Family Foundation, about 63 percent of healthcare marketplace customers have silver plans and 29 percent of marketplace customers chose bronze plans in 2018. Health insurance premiums will vary from state to state, but this year should see lower-priced options for many ACA exchange shoppers. Tennessee will see a decrease in premium rates of about 26 percent in 2019 – a far cry from the 56 percent increase Volunteer State residents experienced last year.

Several factors are driving these big swings in major medical insurance prices, including the repeal of the individual mandate penalty (which takes effect January 1, 2019) and competition from insurance providers who will offer short term, limited duration insurance plans, which are not ACA-compliant. Last year, insurers padded the cost of their silver policies (a practice known as “silver loading”) to account for the loss of cost-sharing reduction payments, which the Trump administration ended for good. Since insurers front-loaded their pricing last year, this year’s premiums will see negligible increases or outright decreases in many markets.  

You Can Still Get Cost-Sharing Subsidies

The law as it currently stands is charged with two conflicting mandates. One is to provide healthcare for low-income people who could not otherwise afford insurance. The other is a cap on premium prices for low-income individuals who qualify for subsidies, forcing the government to pay the difference.

In 2019, people who earn between 100 and 400 percent of the federal poverty level (up to $83,120 for a family of three) will continue to qualify for cost assistance on the marketplace known as advance premium tax credits, also called subsidies. People who earn between 100 and 250 percent of the federal poverty limit (up to $51,950 for a family of three) also qualify for additional savings known as cost-sharing reduction payments. You might have heard about these in the news over the last few months.

Cost-sharing reduction payments lower the amount you have to pay out of pocket for things like coinsurance and deductibles. The ACA requires insurers to offer this discount to people who qualify based on income. In 2018, Trump announced that the federal government would stop making cost-sharing reduction payments to insurers, which formerly funded the gap in healthcare premiums and the cap on prices for people receiving subsidized insurance. Insurers still have to cover the cost of these reductions but without government support.

As a result, carriers have hiked rates for all silver benchmark plans, which are used to calculate the subsidies, thus lowering the cost of insurance plans for low-income purchasers but effectively increasing the price for everyone else.

This has led to some extreme fluctuations in price for enrollees who qualify for subsidies. In some cases, 2019 insurance prices may be up to 96 percent cheaper for enrollees eligible for subsidies while non-subsidized insurance purchasers may see drastic increases in premium prices of $2,000 or more per year.

These forces are driving low-income people to increase their access to (and purchase of) health insurance plans while wealthier and/or healthier individuals are increasingly choosing to not purchase insurance at all or choose short-term, non-ACA compliant plans.

It’s a Good Year for Companies Selling Health Insurance in 2019

More insurance companies are joining the federal insurance exchange this year, which is good news compared to the mass exodus during the last couple years. Whereas some parts of the country were once declared “bare” or without any ACA-compliant insurance options, 2019 is expected to have very few bare areas as more insurance companies have announced that they will be selling their products on the market in 2019 than the year before.

According to University of South Carolina’s Leonard D. Schaeffer Center for Health Policy and Economics, the changes in the law for 2019 are expected to increase the price of individual health insurance premiums overall. Mark Fielder, who helped the center compile its report, calculated that insurance providers will be increasing their average profit margin for an individual plan by 10.5 percent as opposed to just a 1.2 percent increase in 2018.

The medical loss ratio (MLR) requirement of the Affordable Care Act for 2019, which the Centers for Medicare and Medicaid Services adjusted earlier this year in a final rule, is also expected to ease the burden on insurance providers. Before this year, all insurance providers on the exchange had to have an MLR score of at least 80 percent (85 percent for large group coverage plans), meaning that at least 80 (or 85) percent of income earned from premiums had to be spent on claims instead of overhead or administrative costs. That rule is now more flexible and encourages more insurers to enter the market.

Medicaid and CHIP are Still Available

The Medicaid and Children’s Health Insurance Program (CHIP) (known by different names in different states), which offer free or low-cost healthcare insurance for eligible people, will be available as usual this year. CHIP is a joint program funded and operated by federal and state governments.

Congress allowed CHIP’s funding to lapse in September 2017 for the first time in the program’s history, but funding was restored on January 22, 2018 and officially renewed via the Bipartisan Budget Act of 2018 for an additional four years. The current matching rate for CHIP, which provides federal financing for state programs, currently stands at 23 percentage points but will be decreased to just 11.5 percent in October 2019.

A change in the amount of federal funding is likely to result in big changes in the affected states’ major medical expenditure budgets, but people who currently qualify for Medicaid and CHIP are not likely to see any difference in healthcare coverage or pricing for 2019. If you or your children qualify for these programs, you can enroll at any time throughout the year. You don’t need to depend on the open enrollment period that runs from November 1 to December 15.

The Individual Mandate Penalty is Gone

One of the biggest changes for 2019 is that the individual mandate penalty fee will be zeroed out starting on January 1. The mandate itself remains in effect, but without a penalty fee enforcing it, the requirement to have ACA-compliant coverage has been rendered useless. That means you won’t have to worry about a tax penalty if you don’t buy major medical coverage for 2019.

We should point out that it’s still a good idea to buy health insurance. Obamacare plans – sold on and off the exchanges – give you the most robust coverage you can get, and if you qualify for premium tax credits, major medical can be an affordable way to protect yourself and your loved ones against the unexpected. Just remember to shop around during open enrollment. Whether it’s major medical, a short term health insurance plan or ancillary benefits, like accident and critical illness coverage, there’s a plan that will work for you.

California Residents Get an Early Start to Open Enrollment in 2019

Open enrollment for 2019 health insurance starts November 1 nationwide, but California residents will have a jumpstart on the rest of the country. That’s thanks to state legislation late last year that extended the open enrollment period in the Golden State to run from October 15 through January 15. Residents who buy private health insurance will have three full months to purchase a new plan or renew an existing one. The change affects shoppers on and off the state’s Affordable Care Act exchange site, Covered California.

Most other states follow the federal open enrollment period, which runs from November 1 through December 1 for coverage starting January 1, 2019. Some states, like California, run their own state-based health insurance exchange site and can elect different dates.

Under the Affordable Care Act (ACA or Obamacare), an annual open enrollment period allows Americans to shop for and purchase plans only once during the calendar year. This is to prevent people from buying health insurance after they’re sick or they’ve been diagnosed with a medical condition and dropping it once their problem has been addressed – a scenario that inflates premium rates and insurance costs.

Changes to the ACA and 2019 open enrollment implemented under the Trump administration have been met with mixed reactions from insurers, consumers and government officials across the country. These changes include a shorter signup period for health insurance – initiated with last year’s enrollment season – that cut enrollment in half, to just six weeks. And for the first time in 2019, the individual mandate, an unpopular but key component of Obamacare, will be rendered ineffective since the penalty fee for not having health insurance will be zeroed out starting January 1.

The mandate to have minimum essential coverage remains in effect, but without the penalty in place, health insurance experts assume that many current customers will drop their coverage to save money. Younger and healthier customers are more likely to drop their health plans.

On the other side of the debate, Trump administration supporters claim credit for stabilizing premium rates and lowering costs for the 2019 enrollment period. In a speech delivered in Nashville on September 27, Department of Health and Human Services Secretary Alexander Azar praised the current administration for lowering premium rates for next year. Azar and his department have been touting the benefits and flexibility of short term health plans, recently expanded under the Trump administration to last up to nearly a full year.

Opponents argue in turn that premium rates may have dropped even further without Trump’s interference. In a press release announcing anticipated rates for the 2019 enrollment season, Peter V. Lee, executive director for Covered California, insisted that premium rates for California might have dropped much lower if the individual mandate penalty hadn’t been eliminated.

As it stands, Californians on and off the exchange can expect an average increase of just under 9 percent for health insurance premiums in 2019, which is nearly 4 percent lower than the increase in 2018. The same 11 insurers from last year will also participate on the exchange this year, and 96 percent of California customers will have access to at least two carriers.

Bronze, Silver, Gold & Platinum: What the Metal Tiers Mean

Choosing a health insurance plan today can be confusing, with options that are as different as the people they’re meant to insure. Although the metal tier designation in the healthcare marketplace is supposed to make the decision easier, you might not understand what these categories mean or how they help you buy coverage.

In an effort to make it easier for consumers to compare plans in the healthcare marketplace, the Affordable Care Act introduced metal categories for major medical coverage: bronze, silver, gold and platinum. Each metal is designed to easily identify how generous the coverage is under that plan. Just as gold is more valuable than bronze, higher-tiered plans offer more generous coverage and better benefits – with a correspondingly higher price tag.

Each tier represents an estimate of what percentage of healthcare coverage will be provided to people who enroll in that particular level as a whole. It is not based on what you pay specifically but an estimate of what a population will use for healthcare services overall. The percentages are known as actuarial values.

Actuarial Values

Determining actuarial values isn’t easy, and it’s not something you really need to do to buy health insurance. But we wanted to summarize the idea here so you know what we mean when we say that a silver plan covers 70 percent of your healthcare costs. The ACA specifies actuarial percentages for each level of plan. The percentage that must be covered by the insurance company for each tier in the marketplace in 2019 is:

  • Bronze: 60 percent
  • Silver: 70 percent
  • Gold: 80 percent
  • Platinum: 90 percent

These percentages may change if you are considered low income, have a health savings account or are eligible for cost-sharing subsidies. In addition, because the tiers are based on how generous a plan is for a standard population, the cost-sharing structure may be different between plans. One plan may offer a higher deductible but lower coinsurance after the deductible is met in order to meet the same actuarial value. Another plan may cover the cost of all doctor visits prior to meeting the deductible but have a higher coinsurance percentage.

To reiterate, having a platinum plan doesn’t mean that your coinsurance rate – your share of the medical bill – will be 10 percent and the plan will pay 90 percent. That might be how the plan is structured, but it’s not a guarantee. Actuarial values mean that a plan will cover about that much in medical costs across the total population of people with that plan. The higher the percentage, the higher the value in covering medical costs.

Higher Tier Means Lower Out-of-Pocket

Platinum plans have the highest premiums, but you will pay much less out of your own pocket when you get medical care. As you move down the tiers, premiums are lower but out-of-pocket costs rise, with bronze plans having the lowest premiums but highest out-of-pocket costs.

For example, a bronze plan may have a monthly premium of $289 with a copay for a doctor’s visit of $60. The same plan at the platinum level may have a premium of $506 but a copay for a doctor’s visit of just $20. With lower-tiered plans, you’ll pay less upfront but more later. Higher-tiered plans require more in advance but less cost-sharing overall.

Choosing a Metal Tier

It might seem like a no-brainer to choose the plan with the least amount of cost-sharing. No one likes paying more for care. But platinum and gold plans can be expensive, sometimes prohibitively so. The best way to choose a metal tier is to look at the options in your area, assess what you can spend for insurance each month and choose the best plan you can afford.

Don’t forget to consider your medical needs, too. Choosing a cheaper plan just based on premium cost is a bad idea, especially if you have healthcare needs that demand regular or frequent care, such as diabetes.

If you’re rarely sick and need nothing more than an annual checkup, you’re healthy and you have no children at home, a bronze plan may be the best option for you. Platinum plans tend to be better if you’re older, need a lot of trips to the doctor to manage a condition or have an expensive condition to treat. Platinum plans tend to look more like the robust benefits that come with job-based coverage from large employers. Silver plans, though, tend to be the most popular choice on Obamacare marketplaces.

Affording the Plan

The best option is to choose a tier that best matches your needs, but if you cannot afford the premiums for that plan, choose the closest option that you can afford. If you choose a plan that you can’t really afford and don’t pay your premiums, your coverage can be cancelled. Losing health insurance during the year can put added strain on your finances, so don’t get stuck with a health plan that costs too much.

A Non-Metal Option: Catastrophic Coverage

Catastrophic plans will continue to be available in 2019. This category of plans is designed for young and healthy people who can’t afford other plans and/or can’t get health insurance through work. The plans have limited eligibility and cannot be purchased using premium subsidies. To qualify for a catastrophic plan, you must be under age 30, or you must meet a hardship or affordability exemption. Hardship exemptions include:

  • Bankruptcy
  • Caring for ill, disabled or aging family members, which led to unexpected expenses
  • Caring for a child who’s ineligible for CHIP or Medicaid
  • The death of a family member

Evictions, health plans that have been canceled, domestic violence and a variety of other situations also fall under the hardship exemption clause, so if you have an extenuating circumstance, check with the marketplace for more information. Catastrophic plans are in a separate risk pool from metal plans. This means that catastrophic plans share the risk pool of other catastrophic plans, not with the metal plans, which is why they can keep prices lower than the standard bronze plan. You will have higher cost sharing with these plans.

10 Essential Health Benefits

All metal plans and catastrophic plans must include the 10 essential health benefits required under Obamacare. These are:

  • Emergency care
  • Hospitalization
  • Laboratory tests
  • Maternity and prenatal care
  • Rehabilitative care and equipment
  • Mental health and substance abuse
  • Outpatient (ambulatory) care
  • Pediatric services
  • Prescription drugs
  • Preventive services

When choosing among the four metal tiers and catastrophic plans, consider how often you visit a doctor, the health of you and your family as well as how much you can afford in monthly premiums. Choosing health insurance in 2019 for your family will be different than in previous years as the Trump administration continues to make changes to healthcare coverage requirements. By understanding the differences in major medical via the categories available, you can make sure that you have the health insurance you need at a price you can afford.