Health Care MarketplaceNews & Research

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 HealthCare.gov. 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. 

Health Insurers Find Stable Footing in 2019

According to a recent report from S&P Global Ratings, 2019 should be a strong year for health insurers. The financial analyst firm predicts that the American health insurance market is likely to remain stable over the course of the year.

Conditions are generally favorable for those doing business in this sector at the moment. For one thing, the American job market has been growing. As more people get hired, more people opt into employer-sponsored health insurance. This, in turn, boosts the number of customers covered by insurance companies.

There’s also significant business available for insurers in the area of government-sponsored health coverage since private health insurance companies can participate in federal or state-based health insurance exchanges. S&P noted that these markets are seeing greater stability now than in the earlier years of the Affordable Care Act. According to some predictions, 2018 will be the highest year of earnings for marketplace insurers. One sign of the health of the exchanges is that new participants have been joining the marketplace’s insurer lineups in recent years.

Are Better Times Ahead For Carrier & Consumers?

Operating managed Medicare or Medicaid plans is another way that many insurers choose to participate in the realm of government-sponsored healthcare. As Baby Boomers are turning 65, Medicare enrollment numbers are going up, and many of those enrollees are opting for Medicare Advantage plans. These private alternatives to traditional Medicare offer robust benefits without a robust price tag. Managed plans are also becoming a common trend among state Medicaid programs.

As a result of the favorable health insurance market, the majority of health insurers under S&P’s purview received a rating of “A” or better at the end of 2018. Despite the positive news, the analyst firm notes that there are some issues looming that could reduce the future stability of the market.

The continued viability of the ACA is one such concern. On the one hand, because Democrats gained control of the House of Representatives during the November 2018 midterm elections, the probability of a congressional ACA repeal seems unlikely to happen in the near future.

On the other hand, the Trump administration may continue to attempt changes to the ACA through other means. Furthermore, in light of a late 2018 ruling from a federal judge, the constitutionality of the healthcare law will once again end up before the Supreme Court.

Also of concern is the fact that healthcare costs around the country continue to rise. Climbing costs could affect insurers’ financial stability. And several mergers of large companies have led to the creation of even larger healthcare giants, which will impact the healthcare industry – for better or worse, it remains to be seen. Near the end of 2018, Cigna Corp. and Express Scripts finalized their deal, and Aetna and CVS Health did the same.

Involvement in government-sponsored healthcare can involve a good deal of red tape. While major healthcare companies often have the manpower and departments to handle this, smaller insurers may find themselves struggling to stay ahead. Federal and state exchanges have seen the entrance of many new insurers over the last few years, which has given consumers greater choice. It’s possible, though, that some of the smaller players, unable to keep up, will once again exit over the next few years.

It’s also possible, however, that the natural response to these company mergers may simply be that collaboration across healthcare entities increases. This could lead to greater efficiency and productivity.

In the short term, S&P analysts predict that payment-and-delivery reform will be a key focus for insurance companies this year. Attempting to follow through with the ACA’s provisions regarding value-based payments may be an additional source of increased collaboration between healthcare entities.

Another Area Affected By Government Shutdown: Food Inspections

The federal government’s shutdown is touching the lives of more than its furloughed employees. From issues reported at national parks to potential delays in processing upcoming tax returns, the shutdown is creeping into the lives of every American. Now the Food and Drug Administration (FDA) is reporting that they have suspended routine food inspections.

What’s Been Affected So Far

FDA director Dr. Scott Gottlieb said the agency has halted routine safety inspections of seafood, fruits and vegetables and other foods due the federal government’s shutdown. The FDA oversees nearly 80 percent of the food supply in the United States. Their inspectors visit about 160 food processing and manufacturing plants per week. More than 30 percent of those are considered to be at high risk of causing food-borne illnesses. According to statistics from the Centers for Disease Control and Prevention, food-borne diseases are responsible for well over 100,000 hospital visits each year in the U.S., with some 3,000 deaths reported annually.

Not all inspections have ceased. The agency said 100 percent of foods imported from other countries continue to be inspected and that critical functions, such as monitoring outbreaks of food poisoning, have not been affected. Sampling of some frozen foods has also continued. The Department of Agriculture handles inspections of meat and poultry products and they report that 89 percent of their food safety employees are still on the job, though they are not being paid. Also, restaurants are overseen by local health agencies and are not affected by the federal shutdown.

Officials Aren’t Overly Concerned — Yet

While admitting the situation is not ideal, officials say there is not a big need for public concern at this point. Director Gottlieb said the FDA is working to bring back about 150 employees to inspect foods that represent higher risks to the public, such as cheese products, infant formula and fresh produce. He’s hopeful this could happen as early as next week.

Sarah Sorscher, from the Center for Science in the Public Interest, said the FDA’s suspension of routine food inspections isn’t an immediate cause for concern, but will be if the shutdown continues. “That’s more and more issues they’re potentially not catching,” she said. In addition to missed inspections, a long-term shutdown could impede the agency’s ability to implement new food safety standards, according to Sorscher.

Officials remain optimistic that an agreement between political leaders will be reached to end the shutdown and stress that there’s no need for the public to worry about the safety of their at this point. However, it’s a story that bears watching if the shutdown continues.

Beware the Trade-Offs for “Medicare for All”

In 2017, Senator Bernie Sanders introduced legislation that would expand Medicare into a universal health insurance system for the country. The bill, known as Medicare for All, was supported by at least 15 Democratic senators and would provide universal health coverage without any premium costs for consumers.

Senator Sanders believes that the healthcare system in America needs to be completely overhauled. Over the past five years, premiums have doubled and deductibles have gone up 40 percent. Many insurance plans have small networks that only offer a limited number of providers and hospitals. When the closest hospital is outside the network, this can lead individuals to run up extensive bills if there is an emergency.

How Would It Work

According to Sanders and his supporters, Medicare for All would build on the Affordable Care Act, which allowed millions of Americans to obtain health insurance. But proponents of universal healthcare believe that the federal government could do more. There are still 29 million Americans without health insurance, and millions remain underinsured because they can’t afford the high copayments and deductibles their policies require.

Medicare for All would separate health insurance from employment. It’s billed as a healthcare proposal that would spur innovation and allow people to live healthier lives. Employers would no longer spend time focusing on how to provide health insurance to their employees and spend more time focusing on growing their business.

The plan would create a federally administered single-payer healthcare system, covering inpatient and outpatient care, including long-term, primary and specialty care. Prescription medications, vision, dental, hearing, mental health and substance abuse coverage would also be included under this proposal.

Estimated Costs

In July 2018, the Mercatus Center at George Mason University reported that the program would cost the federal government around $32 trillion over a 10-year period. Sanders suggested when he introduced the bill that most Americans would support a tax increase if it meant household healthcare costs would be reduced. Critics of the idea say that the estimated cost would be difficult for the federal government to absorb. The Mercatus Center is not alone in its estimates as the Urban Institute came up with similar figures in 2016.

Other Countries

Canada currently has a single-payer system that has been implemented successfully, which many proponents of Medicare for All use to demonstrate how the program could work in the United States. Canadians pay about the same in income taxes as Americans. However, in a 2017 comparison of 11 high-income countries, Canada’s healthcare system ranked ninth and the United States ranked last. In addition, Canada covers most medical needs, but people often purchase a second, private plan for unmet health needs like prescription drugs. In Britain, the government owns hospitals and employs specialists via the National Health Service. There are often long waits for care in Britain, which is addressed by a small private system that caters to wealthier people who want faster access to treatments.

The problem in comparing the United States to other industrialized nations with universal healthcare systems is that it’s much bigger from a population standpoint. Implementing a federal single-payer program would not only cost more but require a complete overhaul of the way the system works now.

As an example, hospital rooms in the U.S. are generally private or shared with one other person. In England, patients are more likely to be put in a ward, which could hold up to 24 beds divided into smaller sections based on level of care. European hospitals tend to be housed in older buildings that may not have started out as healthcare facilities, so planners conserve space and architectural integrity with a different setup than Americans are used to. A nationalized healthcare system would require American providers to rethink how they plan, build and administer hospitals – and this is just one instance of change.

Cost Negotiations

Proponents argue that a single-payer system could actually save money through healthcare cost negotiations. The federal government would be able to negotiate prescription drug and other healthcare costs. This means the $32 trillion could be cut somewhat if healthcare costs can be reduced. Administrative and pharmaceutical costs are much higher in the United States than they are in other high-income countries. Doctors also earn significantly more here as well, partly because there are more specialists – only 30 percent of practitioners in the U.S. are generalists – and specialists demand higher pay for their skills.

Under the Medicare for All plan, doctors would be paid about 10 percent less. It’s significant to note that a similar program proposed in Vermont was not pursued by the governor because it would mean an 11.5 percent increase in payroll taxes on businesses as well as a 9.5 percent income tax increase.

Gaining Momentum

Since Sanders presented the bill, the idea has been gaining momentum, even though he has yet to explain how his proposal would be financed. One New York Times poll found that 51 percent of Americans and 74 percent of Democrats supported the idea of a single-payer system. But a 2017 poll by the Kaiser Family Foundation found that support for the program dropped significantly when respondents were told taxes may increase or that the government could have more control over healthcare. There is also some confusion among Americans about how universal healthcare would work. Many polled believed they could keep their current health insurance under a single-payer plan, something that is not true.

There are still many variables that must be addressed regarding Medicare for All. There has been no discussion about what would happen to jobs at private insurers, although some believe those jobs could be repurposed into positions with the federal government. As Democrats start throwing their hats into the ring for the 2020 presidential election, healthcare will take center stage as a leading platform issue.

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.

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