Tuesday, June 25, 2013
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The Annual Ritual
I was dreading it, but knew it wouldn't be much longer. It finally arrived one month later than last year. And it was worse than I feared.
My monthly health insurance premium was going up by 19%.
As a freelance writer, it's my responsibility to provide my own insurance coverage through an individual policy. Without the advantage of group rates, I chose a high deductible plan to make the coverage somewhat affordable.
The provider has never had to pay a claim for my benefit. Being relatively healthy, the deductible has yet to be met. Yet my premium has increased 67% over the four years I've held the policy.
So begins the annual ritual of comparing health insurance plans. I'm not quite certain if its the rate increase notice or the ritual I dread the most. Neither ends as I would hope.
I begin my search using the typical online insurance comparison tools. There are a bevy of them out there. Try a couple to find the one you're most comfortable navigating. The results don't vary by much.
The first thing you'll find is that no two providers structure plans in the same fashion. Evaluating options is like comparing apples to oranges.
A sample claim will be shown to give you an idea of which company provides lower out of pocket costs for a given scenario. But what if your condition doesn't fit that scenario when an emergency arises? The variables are so extensive that making a wise decision is not easy.
Annual deductible levels vary. This is the amount you will pay out-of-pocket before insurance coverage is available. These can range anywhere from $250 to $10,000 for an individual or up to $20,000 for a family. The lower the deductible, the higher your monthly premium.
Once your deductible is reached, most plans require a co-pay until you reach the stated out-of-pocket maximum. This is the point where insurance covers everything afterward. Those with the highest deductibles can find themselves responsible for up to $20,000 individual/$30,000 family before insurance covers the remainder.
After you've determined how much you're comfortable with paying out-of-pocket, call your doctor(s) and ask to speak with the person handling insurance claims. Tell them you're looking for a new provider. Which do they accept? Do they have more problems with one over another? Do they get claims rejected for ridiculous reasons? Patient complaints?
The company I'm currently with had plan options appear that seemed better than my current policy. I visited their website directly and found a couple that might serve me well. But their plan types were not terms I was familiar with, I had expected to see the usual PPO, HMO and Major Medical.
They did offer PPO plans (Preferred Provider Organization), those where you can choose your own doctor without a referral. Better coverage and lower out-of-pocket costs are available when your doctor is within their network.
They offered HMOs (Health Maintenance Organization) where your primary doctor sees you first and refers you to a specialist when need be. No coverage is provided if you see a doctor outside of their network.
But what does Hospital Surgical Plus mean? Nothing in the plan description gives it away.
So I call the toll-free number to ask a human.
The agent advised me to stick with my current plan, despite the cost. If I change now, I'll only have to do it again in October when Open Enrollment begins for the Patient Protection and Affordable Care Act.
Plan options will change to comply with provisions of the healthcare act. Rate increases are likely. Since my current plan was in force prior to the law being enacted on March 23, 2010, I'm grandfathered in and can remain on it should I so choose. It's likely to offer better coverage at a lower cost than the new offerings that will become mandatory. Anyone whose health insurance coverage went into effect after enactment will have to select a new plan, according to the agent.
I couldn't believe what I was hearing. Nancy Pelosi wasn't kidding when she told Congress we would learn what was in this bill after it was signed.
I called an independent agent for confirmation. There are ways to get around this, she assured me. If you're a member of a group plan, for example, you may be able to purchase coverage now and not have to repeat the drill come October's Open Enrollment period.
A second agent I questioned had never heard of policies having to be rewritten come Open Enrollment time. He's attended several seminars on the upcoming changes and contends it isn't an industry standard. Perhaps my provider has adopted this as company policy, he offered.
There is still much unknown about exactly how the Affordable Care Act will be implemented. The industry is not prepared. The Open Enrollment period may be postponed until the details are worked out.
But in case it isn't, we're only a couple of short months away. Read on to learn what you need to know before you enroll.
Here Comes Obamacare
Beginning January 1, 2014, all Americans must have health insurance coverage. Those that don't will be subject to a new tax.
There are exceptions, of course. If you're a member of a religious faith that does not accept benefits from any private or public insurance company that makes payments for medical care, death, disability, old age or retirement, you are exempt from both the healthcare mandate and tax penalties.
You must be able to prove you are part of this group, and the sect had to have been in continuous existence since 1950. One example is the Amish, who are also exempt from paying Social Security and Medicare taxes. They do not accept any of their benefits.
Nonprofit healthcare sharing ministry organizations are exempt. Members pay shares toward their ministry in exchange for health care when they need it. People must certify that they are members of such sects.
If the lowest cost plan exceeds 8% of a person's income, or they fall below the tax filing threshold, they're not obligated to purchase health insurance. Nor are they subject to the tax penalty.
If the Department of Health and Human Services determines you have suffered a hardship that prevents you from obtaining qualified health insurance, you are exempt.
Native Americans, those who haven't had coverage up to 90 days, undocumented immigrants and imprisoned people aren't subject to the tax penalty. The rest of you should continue reading this article.
The tax penalty, for those who choose to forego coverage, is assessed on either a flat-fee or percentage of taxable income, whichever is greater. The flat-fee increases over a three-year time span. In 2014, it will be $95. Those uncovered in 2015 will pay $325. The fee goes up to $695 in 2016.
Income percentages steadily increase over three years, also. Uninsured individuals will pay 1% in 2014, 2% in 2015 and 2.5% in 2016.
Much is still being worked out in plan implementation. Analysts expect the monthly insurance premium for an individual to be around $335 per month. Multiply that by every member of your family to estimate your monthly premium. A family of four will likely pay about $1,340 per month.
Open Enrollment is scheduled to begin October 1 in preparation for the January 1, 2014 mandate. That's when the Health Insurance Marketplace exchanges should be up and running.
The exchanges will provide side-by-side comparisons of qualified health plans, including their benefits, costs and quality. Certain states chose to setup their own exchanges. Others will default to those operated by the federal government.
Don't be surprised if this process is delayed. Those in the insurance industry believe there are still too many unknowns to be ready to go as scheduled.
Benefits of the Affordable Care Act have been phased in since its 2010 enactment. In that year, it became mandatory to provide coverage comparison options online so consumers could choose the one that works best for them.
Insurance companies could no longer deny coverage to children based on a pre-existing condition. Lifetime and annual limits were eliminated.
Seniors saw benefits in 2011 with changes to prescription drug discounts, free preventive care, and enhanced standards on healthcare quality and efficiency.
In 2012, a hospital Value-Based Purchasing program (VBP) was introduced to Medicare. This offered financial incentives to hospitals to improve the quality of care. Standardized billing was adopted and use of electronic health records instituted.
A new, voluntary long-term care insurance program was to be available to provide cash benefits to adults who became disabled. However, Secretary Sebelius submitted a report to Congress on October 14, 2011 stating that a viable path for implementation could not be established.
The Pre-Existing Condition Insurance Plan (PCIP) became available in 2010 to serve the uninsurable until the 2014 mandate that prohibits insurance companies from refusing coverage for those with a pre-existing condition.
The program no longer accepts new enrollees. Applications were suspended on February 16, 2013 to ensure funds would be available to cover those already enrolled through the end of this year.
No matter which provider you select, all private health insurance plans must offer certain benefits. Regardless of personal need, they must include:
Despite what we do know about the Affordable Care Act, implementation processes are still being worked out. Stay tuned to GCFlash for the latest developments.
Tip of the Week
Trying to unravel the Affordable Care Act? Find answers at Healthcare.gov.
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