The biggest threat to Obamacare yet is right around the corner.

A case about to be decided by the U.S. Court of Appeals for the D.C. Circuit could stop Obamacare dead in its tracks in 36 states. ‘Halbig v Burwell’ is based on an illegal action taken by the Internal Revenue Service in 2012.  Below I will outline that illegal action and the two sections of the PPACA (Obamacare) that are relevant in this case.

State-based exchanges and federally facilitated exchanges

Section 1311 of the PPACA describes state-based health insurance exchanges. That section outlines the powers granted to the IRS to provide APTC – “Advance Premium Tax Credits” (a.k.a. ‘subsidies’) that will be used to artificially lower the high cost of health insurance offered in a state-based exchange. Tied to those APTC’s is also the power granted to the IRS to levy a $2,000 or $3,000 excise tax (non-tax deductible) on all employers with 50 or more full-time employees (first 30 employees waived) if they do not provide PPACA approved health insurance. This is a lot of new power granted to the IRS and this is the primary reason the IRS is hiring thousands of new agents.

Section 1321 of the PPACA describes federally-facilitated exchanges and state-federal partnership exchanges – like the exchange the state of Illinois has chosen to establish. In these types of exchanges, the IRS is granted no authority to provide APTC’s or to levy excise taxes on any employer in that state for not providing PPACA approved health insurance. Since the crafters of the PPACA assumed that every state would willingly establish a state-based exchange, there was no money appropriated for federally-facilitated exchanges.

Thus far 36 states have chosen not to open a state-based health insurance exchange. As such federally-facilitated exchanges have been implemented in those states regardless of the wishes of those state’s legislatures.

The illegal action taken by the IRS 

Here’s the kicker, in order to ‘fix’ this legal ‘opt out’ that section 1321 provides to states that choose not to open a state-based exchange. The Internal Revenue Service finalized a proposed rule on the 2 year anniversary of the passage of the PPACA that offers APTC’s -Advance Premium Tax Credits – through exchanges “established under section 1311 OR 1321 of the PPACA. Those six characters—”or 1321″—constitute as Cato’s  Michael Cannon correctly describes “an unconstitutional and as such illegal rewriting of the statute.” By issuing tax credits where Congress did not authorize them, this rule triggers billlions of dollars in taxpayer provided “subsidies” and imposes excise taxes on employers with 50 or more full-time employees in all 50 states.  Whether they have a state-based, state-federal partnership or federally facilitated exchange. Since the IRS is not a Legislative branch, this action was illegal.  It was not authorized by Congress and as such it should not stand. 

Worse yet, President Obama is following this new proposed rule as if it was codified law. This illegal action taken by the IRS and President Obama’s support of it is the crux of the Halbig v Burwell case. If the U.S. Court of Appeals upholds the rule of law in this case it will mean the end of Obamacare  in 36 states. In turn, it may be the final death blow to an unconstitutional and wildy unpopular law. 

July 22, 2014 UPDATE

D.C. Circuit Court of Appeals rules in favor of Halbig plaintiffs! The Obama administration will of course appeal this decision to the entire court.  Seven of that court’s 11 judges were nominated by Democratic presidents, including four by Barack Obama. If the Obama administration fails there, the case will head to the U.S. Supreme Court. If the Obama adminstration loses there, 57 million Americans who work for an employer and 8 million individuals in more than three dozen states will be FREED from the unconstitutional tyranny of the Obamacare individual and employer mandate. This will also be the beginning of the end of Obamacare. We still have a long battle coming on this issue.

Read today’s ruling from the D.C. Circuit Court of Appeals here >
http://www.cadc.uscourts.gov/internet/opinions.nsf/10125254D91F8BAC85257D1D004E6176/$file/14-5018-1503850.pdf 

Hours after the D.C. Circuit Court of Appeals struck down the illegaly granted IRS subsidies the 4th Circuit Court of Appeals upheld them. This is a long way from over.

4 Comments

Filed under Uncategorized

Illinois FINALLY begins implementing common sense Medicaid reforms.

Nearly 7  years after former Indiana governor Mitch Daniels began reforming the formerly bankrupt Indiana Medicaid program by implementing “Healthy Indiana“.  Illinois finally begins moving in the right direction with our Medicaid program. Between now and the fall of 2014, 1.7 million Illinois Medicaid recipients will begin receiving outlines of coverage for their new private health insurance plans.

This is the second positive step Illinois officials have taken to reform our Illinois Medicaid program. The first step begin in 2012 when among other things, Illinois finally implemented a TPA – Third Party Administrator. TPAs perform duties such as routine audits to determine if existing Medicaid recipients are actually eligible for Medicaid based on their income, still living in Illinois or for that matter still breathing. When I say ‘still breathing’ I’m not being facetious. Recent audit results found that our Illinois Medicaid program paid an estimated $12 million for medical services to people listed as deceased!

Examples of Illinois Medicaid waste, fraud and abuse.

Other results of our first audit of Illinois’ Medicaid rolls are shocking indeed. According to the Chicago TribuneOf the first 20,500 recipients screened by an outside contractor, the auditors recommend that 13,709 be removed from the rolls. Yes, that’s two-thirds of the first group screened, flagged as ineligible to receive their current Medicaid benefits. How so? In some cases, the recipients make too much money to qualify. In other cases, they don’t live in Illinois.”

Even more shocking is the recent arrest of the CEO and 5 other Sacred Heart hospital officials for rampant fraud. Not to mention, in 2010 75% of those enrolled on our “All Kids Covered” program were classified as “illegal immigrants”. Add to that, the fact that the “All Kids Covered” program itself was an illegal expansion of our Medicaid program facilitated by currently incarcerated, former Illinois governor Rod Blagoyevich and you can see why our Medicaid program is in desperate need of real reform..

What else needs to be done?

1.) Implement reasonable co pays or access fees to deter overuse of emergency rooms by penalizing non emergency room visits. This will steer Medicaid recipients towards far less expensive doctor’s offices for non emergency cases. Traditional Medicaid does not allow the use of higher co pays to discourage overuse of emergency rooms. Many state Medicaid programs charge a co pay of $5 or less to visit an emergency room. These low co pay do not exist in the private sector for this reason.

2.)  Establish defined PPO or HMO networks for Medicaid recipients to seek non emergency treatment. Traditional Medicaid allows recipients to see any willing provider. This discourages reasonable price controls that the rest of us in the private sector already adhere to in order to control costs.

3.) Implement significantly higher co pays for brand name prescription drugs. This will incentivize recipients to use generic drugs when available. If generic drugs are not medically compatible with the patient then implement the same ‘step therapy’ program that we in the private sector have to follow. This way a patient will at least have to try generic drugs and will need physician approval before using more expensive brand name drugs.

4.) Implement Indiana’s POWER HSA (Health Savings Account) which works in harmony with high deductible coverage. By high deductible I don’t mean the $6,350 high deductible that we in the private sector have to assume with Obamacare’s cheapest “Bronze’ plan. Indiana’s HIP – “Healthy Indiana Plan” subjects members to only a $1,100 deductible. However, the POWER HSA  is used to cover that deductible.

HIP members make means tested monthly payments to their POWER HSA accounts. These payments are based on income and can not be more than 2% of income for members below 100% of the FPL – Federal Poverty Level. Medicaid funds then cover the gap between the HIP member’s payments and the $1,100 deductible. If the HIP member is working, their employer can contribute up to 50% of their employee’s annual HSA contribution. Non profit organizations can contribute up to 75% of a HIP member’s HSA contributions as well.

The key point here is that whatever amount of a HIP member’s POWER HSA account that they do not use they keep and it rolls over to the following year. This reduces their required POWER HSA contributions for the following year. This thereby encourages smarter spending habits by giving Medicaid recipients some ‘skin in the game’.

5.) Preventive care must be incentivized. The HIP program does this by offering state defined routine preventive care tests and exams that the HIP member can utilize. If they do not utilize these services than only their much smaller POWER HSA contributions are rolled over to the following year. If they do utilize these service then the entire POWER HSA balance rolls over to the following year. Including all contributions made on their behalf by either an employer, the taxpayer or a charitable organization. This provides a very big incentive for HIP members to stay healthy. By doing so they also reduce the long term costs of the entire HIP program for all parties involved.

This is not rocket science it is common sense. By implementing proven reforms already adopted by states such as Indiana and Florida, Illinois will not only save taxpayers billions but they can provide better care for those truly in need. Whilst it is good to see Illinois legislators begin to adopt some of these reforms, it is my hope that they adopt the others outlined in this article as well. With the state of Illinois facing more than $20 billion in unpaid Medicaid bills and the cost for our Medicaid program projected to increase by more than 40% by 2017 do we really have any other choice?

 

Leave a comment

Filed under Uncategorized

Employers can still send employees to the exchanges but not with pre-tax dollars.

As a licensed health insurance broker, I have recommended many cost reduction options to employers over the last 20 years so that they may continue to attract and maintain quality employees. One of the most lucrative alternatives for both the employer and the employee was for the employer to consider offering a stipend to their employees for them to use to purchase their own individual health insurance on the open market. Contrary to popular belief when comparing apples to apples, individual health insurance premiums are almost always cheaper than employer sponsored group health insurance premiums. This is especially true when you subtract the amount the employer pays towards the premium.

Since employer sponsored group health insurance is not taxable to the employer, recommending that employers provide a stipend to their employees to purchase their own individual health insurance would create a taxable event for both them and their employees. However, if the employer deposits that additional stipend into an FSA – Flexible Spending Account – then they would be able to retain the same tax advantages that they have always enjoyed by providing group health insurance. That concept worked and saved both the employer and the employee considerable dollars on premium and significantly reduced tax liabilities. All of this worked great…until Obamacare.

New rules

On September 13, 2013 the IRS issued yet another set of ‘new rules’ that sent a shock wave through the health insurance broker and human resources community. IRS Notice 2013-54, essentially put an end to this arrangement. In this notice, the IRS stated: “An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation.”

When that notice was issued health insurance brokers all over the nation suddenly realized that one of the most useful tools we had utilized for years had been snatched away from us by an ever encroaching federal government. A federal government ruled by an administration with a never ending thirst for more ‘revenue increases’ a.k.a. tax dollars. Little did we know back in September how severe the ramifications would be for an employer who would continue to use this strategy in the future.

Even More New Rules

On May 13, 2014 the IRS clarified how stiff the penalties will be for an employer who continues to pursue the aforementioned tax and premium saving alternative. It applied the same penalties it outlined back in 2011 to any employer who ‘fails to meet certain group health plan requirements‘ under Obamacare. These fines equate to a $100 fine per day per employee. $100 a day multiplied by 365 days equals an annual fine of $36,500 per employee for each year that the employer remains out of compliance with Obamacare.

In A Nutshell

So what does this all mean in laymen terms? This means that employers can still cancel their existing employer sponsored group health insurance plans and ‘dump‘ their employees into the Obamacare exchanges. In other words, they can still provide a stipend for their employees to purchase individual health insurance either on or off the Obamacare exchanges. They just can’t do so using pre-tax dollars. Not without facing a tremendous IRS penalty.

In the end, this ruling will save taxpayers a lot of money because we won’t be subsidizing premiums for millions of employees who would normally have their health insurance paid for in part or in whole by their employer. That’s the good part. The bad part is as health insurance premiums continue to rise sharply (largely because of Obamacare) employers may be forced to react to this latest government health care scheme by terminating employment. Premiums can only rise so much until something breaks. The last thing we need is to increase our unemployment numbers which are much higher than what the Obama administration has ever reported.

4 Comments

Filed under Uncategorized

COBRA recipients now have until 7/1/14 to replace COBRA with a QHP and Individuals with renewing 2013 plans now qualify for Special Enrollment.

On May 2, 2014 HHS issued a new bulletin. This bulletin provides a “special enrollment” period until July 1, 2014 for individuals who have already elected COBRA continuation coverage. This new rule will allow those who have already elected COBRA continuation coverage to drop their COBRA coverage and select a potentially lower priced QHP – “Qualified Health Plan” on or off the exchange at any time before July 1, 2014.

Before this new bulletin was published, those eligible for COBRA continuation coverage only qualified for a special enrollment period when they first become eligible for COBRA or when they exhausted their COBRA continuation coverage (typically 18 months later). This new rule only applies to states that have a “Federally Facilitated Exchange” like the state of Illinois.  See if your state has a “Federally Facilitated Exchange” click here

Those with 2013 Individual health plans that renew in 2014 now qualify for a “Special Enrollment” period.

The new May 2, 2014 bulletin also allows those who purchased 2013 plans from the ‘old market’ to qualify for a ‘special enrollment’ period if their 2013 plan renews in 2014. The applicants can apply for a QHP up to 60 days before their plans terminate and they may also apply up to 60 days after their plan’s renewal date. In this April 8, 2014 article I noted that before this new bulletin Assurant Health was the only carrier that was offering a QHP to those with plans from the ‘old market’ outside of ‘open enrollment’ periods. With this new May 2, 2014 bulletin all carriers will eventually need to comply. As of the date of this writing Blue Cross Blue Shield of Illinois had not stated when they will comply. If and when they do I will add their statement to this post.

New options for those with Americorps, VISTA or National Civilian Community Corps

This new bulletin also creates a third new ‘special enrollment’ period when members of these programs begin their service and when their service ends. Since members of these programs are often times under-insured on plans that do not contain “minimum essential health benefits” this bulletin grants a hardship exemption from the ‘individual responsibility’ TAX for non compliance. That per person TAX in 2014 is either $95 or 1% of your MAGI – Modified Adjusted Gross Income.

1 Comment

Filed under Uncategorized

Breaking news! Renewal of an individual plan from the old market is a qualifying event with Assurant Health.

I just received outstanding news from Assurant Health insurance company. In February I wrote this article that referred to a federal regulation which states that if you have an individual health insurance policy from the ‘old market’ – non grandfathered plans from 2013, 2012, 2011, 2010 and even grandfathered plans purchased prior to 3/23/2010. And, that policy renews in 2014 you can purchase a new 2014 ‘Medal’ plan on a guaranteed issue basis (no preexisting conditions) all year long, even outside of ‘open enrollment’ periods. The problem is other carriers are not considering the renewal of an old policy to be a ‘qualifying event’. So up until now, I was told that short term (temporary health Insurance) would be the only alternative for those who still have pre-2014 policies that are renewing this year.

Assurant Health announced yesterday that they are now honoring this regulation that states quite clearly that if you have an ‘old’ policy from the ‘old’ market and that plan renews you can purchase a 2014 ‘qualified’ Bronze, Silver, Gold or Platinum health insurance plan on or off the exchange on a guaranteed issue basis between open enrollment periods. This is VERY good news for anyone who has an ‘old policy’ that renews this year and is facing a large premium increase and/or has exclusion riders on their existing policy and wishes to purchase a new 2014 plan without exclusion riders. 

At this juncture, Assurant Health is the only carrier that I am aware of that is honoring the aforementioned regulation and as such they have a corner on the market until the next open enrollment period begins on November 15, 2014 for coverage effective dates beginning no sooner than January 1, 2014. As I stated in this recent article, many health insurance carriers like Aetna and Humana are not even offering short term (temporary) health insurance products until the next open enrollment period and the few carriers who are offer them with dangerously low lifetime maximum coverage amounts. It must also be reiterated that if you purchase short term coverage these policies do not cover preexisting conditions and you will be subject to a 1% of your MAGI ‘fine’ (TAX) from the IRS if you purchase short term coverage because those plans are not considered ‘qualified health plans’ under CMS and HHS regulations.

If your old health insurance plan is renewing in 2014 and you wish to get quotes from Assurant Health for a qualified replacement plan click their logo below. There is a now a new section on the application where you will need to either upload a copy of your existing health insurance ID card proving that you have a policy from the old market or you can fax a copy of your old ID card to the fax number provided on the application. This is necessary to prove that you qualify for a special enrollment period as an applicant with a qualifying event. 

2 Comments

Filed under Uncategorized

The next wave of Obamacare horror stories won’t be about cancellations.

The last quarter of 2013 was filled with horror stories of millions of Americans – many of them Cancer patients – losing their health insurance because of the PPACA “Obamacare”. Even though Barack Obama promised “if you like your plan you can keep your plan and no one will take it away from you, period.” At the very least, many of the 6.3 million policy holders who had their coverage canceled were able to obtain a QHP – ‘qualified health plan’ – on a guaranteed issue basis (no preexisting conditions) as a replacement shortly thereafter. Albeit those plans are often times more expensive and expose those consumers to higher premiums and out of pocket risk exposure, most especially if they do not qualify for taxpayer funded ‘advance premium tax credits’-  to artificially lower premiums and ‘cost sharing’ subsidies to lower deductibles.

That was then, this is now.

The new wave of Obamacare horror stories will begin being told all across America now that we are outside of the first national ‘open enrollment‘ period which ended on 3/31/2014. Only this time it won’t be about Americans losing their health insurance. It will instead be about the vast majority of Americans being unable to purchase individual, renewable health insurance from any carrier no matter how sick they are until January 1, 2015. That’s right, unlike before Obamacare when you could blame those “evil health insurance companies” for “denying you your right to health care.” Now, the blame will rest squarely on the shoulders of the greatest health insurance salesman in world history, Barack Obama.

Millions of Americans are about to be denied their ‘right‘ to health care.

It is Barack Obama’s health care law that will be directly responsible for denying millions of sick Americans their ‘right‘ to health insurance from now until January 1, 2015. From now until then Americans who wish to purchase their own individual, renewable health insurance are barred by federal law from doing so. In fact, the only way to do so now is you have a ‘qualifying life event’ and as such qualify for a ‘special enrollment‘ period.  The truth is under Obamacare your ‘right’ to health care refers to beseeching yet another group of nameless, faceless government bureaucrats who may or may not let you purchase health insurance that will cover your preexisting conditions. Yeah, this is going to be great! Forward!

Sarah

The rest of us in the individual market will be barred by federal law from obtaining our own health insurance that covers preexisting conditions until January 1st, 2015. It is from this pool of millions that the new horror stories will come from. Imagine you are a low information voter who doesn’t vote at the ballot box but votes for American Idol candidates every year.  Then, imagine you develop cancer or another life threatening illness in May and find out that you can’t get health insurance coverage that covers your preexisting condition for another 7 months. Yeah, 2014 is going to be a great year politically for Republicans. Not even they can screw this gift up.

       Examples of qualifying life events are:

  • You move to a new area that offers you different plans, or isn’t covered by your HMO network.
  • You get married.
  • You get pregnant or adopt a child.
  • You lose other health coverage due to job loss, a decrease in work hours, end of COBRA coverage or other reasons.
  • You become a U.S. citizen.
  • Your income changes, or some other event changes your income or household status.
  • You can prove that your health insurance company violated its contract with you.
  • You are no longer covered on a family member’s policy because you turned 26, you have legally separated from or divorced your spouse, or the policy holder has passed away.
  • You become a member of an Indian tribe. Other complicated cases that may qualify for a special enrollment period
  • You faced a serious medical condition or natural disaster that kept you from enrolling. For example:
    • An unexpected hospitalization or temporary cognitive disability
    • A natural disaster, such as an earthquake, massive flooding, or hurricane
    • A planned Marketplace system outage, such as Social Security Administration system outage

    Misinformation or misrepresentation Misconduct by a non-Marketplace enrollment assister (like an insurance company, navigator, certified application counselor, or agent or broker) resulted in you:

    • Not getting enrolled in a plan
    • Being enrolled in the wrong plan
    • Not getting the premium tax credit or cost-sharing reduction you were eligible for

    Enrollment error Your application may have been rejected by the insurance company’s system because of errors in reading the data, or some of the data was missing or inaccurate. System errors related to immigration status An error in the processing of applications or system caused you to get an incorrect immigration eligibility result when you tried to apply for coverage. Display errors on HealthCare.gov Incorrect plan data was displayed at the time that you selected your health plan, such as benefit or cost-sharing information. This includes issues where some consumers were allowed to enroll in plans offered in a different area, or enroll in plans that don’t allow certain categories of family relationships to enroll together. Medicaid/Marketplace transfers

    • If you applied for Medicaid through your state, or were sent to Medicaid from the Marketplace, but you weren’t eligible for Medicaid.
    • Your state transferred your information to the Marketplace but you didn’t get an answer about your eligibility and/or didn’t get enrolled before March 31.

    Error messages Your application was stopped due to specific error messages. For example, you received a “data sources down” error message or another error message that didn’t allow you to enroll. Unresolved casework You’re working with a caseworker on an enrollment issue that didn’t get resolved before March 31. Victims of domestic abuse You’re a victim of domestic abuse and weren’t previously allowed to enroll and receive advance payments of the premium tax credit separately from your spouse. You’ll be able to do so now. Other system errors Other system errors that kept you from enrolling, as determined by the Centers for Medicare & Medicaid Services

You can still buy health insurance in the individual market but it won’t cover your preexisting conditions

Nonrenewable ‘short term’ or ‘temporary’ individual health insurance policies are still available for sale but they will not cover your preexisting conditions. And, only a few health insurers are still offering them.  Some of the biggest players in the market such as Aetna and Humana are not offering temporary plans. Of the few carriers who still are, I recommend Assurant Health for unlike other carriers Assurant Health covers outpatient prescription drugs the same as any other illness. Other carriers do not. To get quotes for temporary health insurance coverage from Assurant Health click their banner below:
Assurant Short-Term Logo
You will owe a non compliance ‘fine’ (TAX) to the IRS for taking the short term route

You must also understand that you will be subject to a 1% of your MAGI ‘fine’ (TAX) for purchasing temporary health insurance since these plans do not include the “essential health benefits” under Obamacare such as Maternity for 62 year old women and single men, drug rehab coverage for those who do not own a crack pipe and pediatric dental for those without children. As such temporary policies are not considered ‘qualified health plans’. Rest assured though, if you are self employed and do not over pay your taxes you will never pay that ‘fine’ (TAX) for the only recourse the IRS has to collect that fine is to hold your tax refund. All criminal penalties for non compliance were removed from the health care law prior to passage.

The other kind of health insurance that covers preexisting conditions outside of open enrollment

The other option if you need coverage for preexisting conditions outside of open ‘enrollment’ is to purchase small group health insurance which is available to groups of two or more people.  However, you must be incorporated and take a Schedule K as an owner of the company. Also, if you are already sick the policy will be max rated and with most carriers if you are going to add employees they must be W2 employees not 1099 contractors.

If your pre-2014 individual health plan is renewing that is a ‘qualifying event’ with Assurant

Assurant Health announced yesterday that they are now honoring this regulation that states quite clearly that if you have an ‘old’ policy from the ‘old’ market and that plan renews you can purchase a 2014 ‘qualified’ Bronze, Silver, Gold or Platinum health insurance plan on or off the exchange on a guaranteed issue basis between open enrollment periods. This is VERY good news for anyone who has an ‘old policy’ that renews this year and is facing a large premium increase and/or has exclusion riders on their existing policy and wishes to purchase a new 2014 plan without exclusion riders.

At this juncture, Assurant Health is the only carrier that I am aware of that is honoring the aforementioned regulation and as such they have a corner on the market until the next open enrollment period begins on November 15, 2014 for coverage effective dates beginning no sooner than January 1, 2014. As I stated in this recent article, many health insurance carriers like Aetna and Humana are not even offering short term (temporary) health insurance products until the next open enrollment period and the few carriers who are offer them with dangerously low lifetime maximum coverage amounts. It must also be reiterated that if you purchase short term coverage these policies do not cover preexisting conditions and you will be subject to a 1% of your MAGI ‘fine (TAX) from the IRS if you purchase short term coverage because those plans are not considered ‘qualified health plans under CMS and HHS regulations.

If your old health insurance plan is renewing in 2014 and you wish to get quotes from Assurant Health for a qualified replacement plan click their logo below. There is a now a new section on the application where you will need to either upload a copy of your existing health insurance ID card proving that you have a policy from the old market or you can fax a copy of your old ID card to the fax number provided on the application. This is necessary to prove that you qualify for a special enrollment period as an applicant with a qualifying event.

5 Comments

Filed under Uncategorized

Obamacare Open Enrollment is ending soon. If you have preexisting conditions you need to understand the new rules.

The next available effective date for individual major medical health insurance policies purchased on or off the “Health Insurance Exchange” is May 1, 2014.  The last date to buy that coverage is March 31, 2014. After March 31, 2014 you will not be able to purchase individual major medical health insurance on or off the exchange until the next “open enrollment” period begins again on 11/15/2014 and lasts until 2/15/2015. So, if you have a preexisting condition you need to start familiarizing yourself with how open enrollment works now, not later nowAlso, due to a new rule issued by CMS on December 19th 2013 (which expanded the original hardship exemption) the 6.3 million American policy holders who have lost their health insurance because of Obamacare will not be subject to a fine (TAX) in the year 2014 for not buying health insurance.

The old rules are gone

The old rules pertaining to purchasing health insurance in the individual major medical market are now gone. You can no longer purchase individual major medical health insurance coverage whenever you want, all year long. There are now specific time periods where this kind of coverage will be available in 2014 and in subsequent years. Those periods are called open enrollment periods. Outside of those open enrollment periods individual major medical health insurance coverage will not be available for sale. This means that you will not be able to get coverage for preexisting conditions.

This is why it is essential that you understand the new rules for they will affect you and everyone you know who has a preexisting condition or has lost their health insurance because of Obamacare. This is especially true because our existing state run high risk health insurance pools which provided guaranteed issue coverage for those who were declined health insurance coverage for decades before Obamacare are now being dissolved.

Buying insurance on and off the Obamacare exchange

It is important to know that you do not have to purchase health insurance at Healthcare.gov. All products sold on and off the new Obamacare HIX – “Health Insurance Exchange Marketplace” will be guaranteed issue products during the two national Open Enrollment periods. They are:

Open Enrollment Period One: 1/1/14 – 3/31/14

Open Enrollment Period Two: 11/15/14 – 2/15/15

This means that you can not be denied coverage and no exclusion riders can be placed on your policy whether you buy the product on or off the Obamacare HIX but only during these two time periods. After these two open enrollment periods you can be denied coverage. In fact, individual major medical products will not be offered between these two national open enrollment periods. If insurance carriers continued to offer guaranteed issue coverage all year long it would lead to adverse selection, as it did in Massachusetts.

What you need to know right now

Since time is of the essence (and their is nothing timely about purchasing health insurance on the exchange). You need to know the only reason to purchase health insurance inside the HIX – Health Insurance Exchange Marketplace (Healthcare.gov) is if you qualify for an APTC – Advance Premium Tax Credit – (subsidy) to artificially lower the high cost of the Obamacare “Medal” plans – Bronze, Silver, Gold and Platinum. In order to qualify for an APTX your 2014 total household MAGI – Modified Adjusted Gross Income – income after taxes and retirement contributions must be less than:

$46,960 for an individual
$62,040 for a couple
$78,120 for a family of three
$94,200 for a family of four
$110,280 for a family of five
$126,360 for a family of six

If your income is more than the aforementioned amounts, you should purchase your health insurance outside of the HIX. The same plans are available off the exchange and the application process is much faster and far more secure. Again, all major medical health insurance products purchased inside and outside the HIX will be guarantee issue (no preexisting conditions) during the two national Open Enrollment periods in 2014.

If you live in Illinois, the best priced 2014 ‘Medal’ plans are insured and underwritten by Blue Cross Blue Shield of Illinois a Division of Health Care Services Corporation. Find the right health insurance plan for you by exploring all of the plan options, save plans that fit your needs in your Shopping Cart and return to apply for coverage when you are ready. Click their logo to begin.

 

To shop for all plans on and off the Obamacare HIX in all 50 states click the banner below:

http://www.smedleyinsurancegroup.com/images/health-care-reform-quick-quotes.jpg

A cheaper option for those without preexisting conditions

If you do not have any serious preexisting conditions, you can save a lot of money if you purchase a non-renewable Temporary health insurance policy for a period of one year. These health insurance policies do not cover preexisting conditions nor do they include all of the federally mandated “Essential Health Benefits” such as Maternity, Drug Rehab coverage and Pediatric Dental. This also means that they are not considered ‘Qualified Health Plans’ meaning that you will be subject to the 1% of your MAGI penalty in 2014 if you purchase one of these plans. That stated the premium difference between these plans and ‘Qualified Health Plans’ is significant. The price difference far outweighs the additional fine you would pay to the IRS in most cases.

To run quotes for a Temporary health insurance plan off the exchange click the banner below:

If that Temporary insurance quote engine does not work in your state click the banner below:

http://www.smedleyinsurancegroup.com/images/health-care-reform-quick-quotes.jpg

Very Important Note: Since the PPACA mandates that all health insurance policies cover preexisting conditions during the first national Open Enrollment period from 1/1/14 – 3/31/14 and the second national open enrollment period from 11/15/14 – 02/15/15. You can now safely purchase Temporary health insurance knowing that when your one year Temporary policy ends you will qualify by federal law for any ‘Qualified Health Plan’ regardless of preexisting conditions during the second annual open enrollment period in 2014. Outside of those two aforementioned open enrollment periods you will not be able to obtain coverage for a preexisting condition. For this reason you must not purchase the 6 month Temporary health insurance option.

Only the 12 month Temporary insurance option is acceptable at this juncture. If you purchase a 6 month Temporary policy your coverage will end in between the two aforementioned open enrollment periods and you will not be able to obtain another policy that will cover a preexisting condition that you may develop during the first 6 months of Temporary policy ownership. HHS may yet provide us with further guidance as to whether or not the loss of a Temporary health plan outside of open enrollment periods will qualify as a “Special Enrollment” period in 2014 so that one could obtain a “Qualified Health Plan” on a guaranteed issue basis outside of open enrollment periods. As of the date of this writing no such guidance has been received.

What if your plan renews and you lose it in 2014 outside of open enrollment?

If your individual health plan renews in 2014 or you lose that plan  in a month that is outside of the two national open enrollment periods (which would be between 4/1/14 and 11/15/14) that will also be considered a Special Enrollment period. So, you will be able to buy another individual major medical policy on a guaranteed issue basis (no preexisting conditions) from any carrier offering a QHP – Qualified Health Plan – even though you will be at that juncture outside of open enrollment. 

7 Comments

Filed under Uncategorized