5 Healthplan Dangers You Need to Know Right Now
#5. If you don’t choose a plan… a plan will be thrust upon you (though you can say “No”)
Health insurance companies are leaving the ACA Exchanges in larger numbers than people on Interstate 90 ahead of Hurricane Matthew.
Because of this, the Obama Administration is worried that insurers bailing may prompt their customers to drop out, too.
Therefore, to preempt this, the Administration is planning to match people who lose ACA-exchange health insurance to new policies in order to keep them from dropping out of the exchange.
The concern is that the matching will confuse or disappoint the consumers being matched.
According to the Administration, those being matched can decide not to take the new policy.
You will receive “a welcome packet and bill from the insurer,” but you don’t have to pay the bill and if you don’t, you won’t be signed up with the insurer.
#4. Insurers are bailing because they’re losing their shirts, so your ACA choices will be slim
The ACA was supposed to help insurers for the first few years of the law’s existence.
Lawmakers and insurance companies knew that many parts of the ACA were going to cost insurers a bundle. Therefore, “Risk Corridor” payments were written into the new law to reimburse insurers for exorbitant losses.
BUT… insurers have lost and are owed $2.87 BILLION (with a “B”) in “Risk Corridor” payments for 2014 alone and have only been paid $363 million (with an “M”).
So, most insurers are saying, “We’re out of here.”
This means that your “On-Exchange” choices are very limited this year. In many states, you will only have one choice if you want to purchase an ACA plan.
#3. Premiums are going UP… way, way UP!
For those insurers that stay in the exchanges, this will be one of the biggest rate increase years ever.
It may not affect you if your income is between 100% to 400% of the Federal Poverty Level (FPL) because the tax-subsidies will also be going up.
Those consumers in the 100% to 250% FPL will receive the biggest subsidy and also receive lowered deductibles and out-of-pocket expenses on Silver plans, as always.
If you are in this group you will make out like a bandit on the ACA exchanges, no matter how high premiums go.
But… if you are not in the above group, be prepared for MASSIVE STICKER SHOCK!
#2. Provider networks will be more limited… and the providers much more controlled
Since most ACA insurers are going broke faster than the Medicare trust fund, their quick-fix Band-Aid is to cut and control the providers of medical services.
What’s worse, we didn’t learn our lesson from the 1990’s.
HMOs are making a comeback.
If you are too young or simply don’t care enough about health insurance to remember the HMO disaster of the 90’s… well, ITS BAAACK.
What’s the old saying? Something like, “If we don’t learn from history, we are bound to repeat it.”
What’s wrong with HMOs, you ask?
In a nutshell, with HMOs, the insurance company controls expenses by controlling the “gatekeeper” (your primary care physician).
It’s our version of socialized medicine, except that it’s Capitalistic Socialized Medicine.
Whether or not you even get medical care is under the thumb of an insurer’s profit. (If this trend continues, I may write another article explaining in more detail why they suck.)
#1. Look outside the ACA exchanges (unless you are 100%-250% FPL)
There are still a few options available to you from before the ACA existed.
This article would become way too long if we try to delve into all of these in detail, but let me run through my favorite options quickly:
a. Traditional Fixed Indemnity plans.
I personally had a plan like this through United American (UA) for many years.
I bought it for about $240 a month and after being covered for more than a decade it was still less than $250 a month when the ACA canceled it in 2014.
It was a plan with a $500 deductible and several supplements. I only had one claim for an endoscopy and between it and one of the supplements, UA paid more than the actual bill.
Let me give you a quick history lesson on health insurance.
Prior to the 1990s, all health insurance plans were fixed indemnity plans.
Even the so-called “major medical” plans back then paid claims based on ‘Usual, Customary & Reasonable Charges’ (UCR) and the insurance company created the list of the UCR limits.
Some of the negatives of these plans are the fact that the amount they pay for each medical thing is limited.
Therefore, medical providers may charge more than these plans pay and these plans do not meet the ACA standard so you will pay the ACA tax penalty and pre-existing conditions typically have a waiting period.
But the positives are the fact that the amount they pay for each medical thing is limited and they don’t take unhealthy people.
Therefore, they don’t need rate increases as often…
And there are no networks.
Therefore, you can go to any doctor.
And they are much cheaper than ACA plans with much lower deductibles if any.
b. Christian Sharing Ministries.
These are not actually insurance. They are Christian non-profit organizations who “Bear one another’s burdens and so fulfill the law of Christ.”
These organizations simply facilitate the payment of one member’s “share” to another member who has had medical care expenses. (They don’t use insurance terms like “premium”.)
Some of the negatives of these are that there are no guarantees because there is no insurance.
And pre-existing conditions are either not included in the “sharing” at all, are limited or have a waiting period before they are “shared”.
The positives for a Christian are the fact that these plans are more aligned with their faith. These plans don’t cover conditions that don’t align, like abortions.
And the “share” amounts and out-of-pocket expenses are much less than ACA plans. (Again, they don’t use insurance words like premium, copays or deductible.)
Plus, joining a plan that was in existence before 1999, exempts you from the ACA Tax Penalty.
c. Short-term medical plans.
These work just as they sound. They are like TERM LIFE insurance, except for health.
You buy them for a TERM of up to 12 months in most areas.
These plans most resemble ACA plans. A few even have PPO provider networks and copay options.
The main positive of this type of plan is that they feel most like ACA plans but they are much cheaper with much lower out-of-pocket expenses.
A few of the negatives are that they don’t cover pre-existing conditions… EVER.
And they end after a max of 12 months. So you start over after each TERM ends, even if you experience a health condition under the previous short-term plan.
That condition will be a pre-existing condition under the new short-term plan.
Disclaimer: this article is not meant to be a detailed explanation of or a promotion for any particular plan or type of plan. See a licensed health insurance agent for detailed explanations. Also, we do not provide legal or tax advice and material contained in this article should not be construed as such. For tax or legal advice please consult an accountant or attorney.
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