My purpose here today is to ask for your help to protect an unrepresented minority. Specifically, those who have been priced out of the ACA marketplace and do not qualify for federal health insurance subsidies to lower their health insurance premiums. According to CMS – Centers for Medicare & Medicaid Services – numbers released yesterday, during last year’s ACA open enrollment period, 360,168 individual applications were processed in Illinois via our State/Federal partnership health insurance exchange. 282,491 of those applications were eligible for a Federal health insurance subsidy to help lower their premiums.
That means 77,677 applications did not receive financial assistance and were forced to pay the full price for health insurance. In addition to those who applied via our exchange and were denied a federal subsidy, there were an additional 127,459 applicants who applied OFF our exchange directly with insurance companies because they already knew they were not eligible for financial assistance. That equates to 205,136 applicants who were forced to pay the full premium for individual health insurance. A premium that has more than doubled since 2014.
The most important aspect of the ACA we can all agree on, is that the law was intended to provide some form of health insurance coverage to everyone, whether they could afford it or not. That’s why subsidies were written into the law. Unfortunately, for the 205,000 consumers who do not qualify for federal health insurance subsidies in Illinois that is no longer the case. For them, ACA-qualified coverage has become anything but ‘affordable’.
The full price for a family of four for the cheapest Bronze PPO plan with Blue Cross Blue Shield of Illinois with a $15,800 out of pocket expense in Chicago is now $1,835 per month which equates to $22,000 annually. This is why so many who do not qualify for health insurance subsidies have been priced out of the ACA marketplace and are now seeking other options that are not safe now but can be made much safer by this legislative body. Those non safe products are known as Non ACA-qualified Short Term policies. They are not safe now because this legislative body restricted the amount of time one can own these policies from 12 months to 6 months of maximum policy ownership and I am asking you to restore the amount of time one can own a non ACA-qualified policy back to 12 months so that they are once again safe to purchase.
It’s not that applicant’s who don’t qualify for federal health insurance subsidies don’t want ACA coverage. They’d be crazy not to want it. It is the most comprehensive health insurance coverage ever sold in the United States and there is no underwriting. Everyone gets coverage regardless of preexisting conditions. That is a VERY good thing. However, the recent actions taken by this legislative body are not only placing those priced out of the ACA marketplace at great peril but you are threatening the structural integrity of our health insurance exchange and the ACA overall.
It may sound strange that I’m asking you to fortify non-ACA policies in order to protect the ACA but there is sound reasoning and supporting data behind this request.
First and foremost, is the fact that consumers who purchase Short Term policies in Illinois are now placed at great risk if at the end of the 6 month policy period they are then laying in a hospital bed with a life threatening condition when their coverage ends. Even if that individual could qualify for another 6 month Short Term policy, that life threatening condition would be considered preexisting which means it would not be covered under their next 6 month Short Term policy. This would leave them uninsured entirely until the next annual ACA open enrollment period begins again in November in which case their coverage cannot begin until the 1st of the following year. This is why it is essential to have 12 month Short Term policies available in Illinois so that consumers stay consistently insured between ACA open enrollment periods. This way when the Short Term policy ends at the end of 12 months, it ends safely the following year during the ACA open enrollment period. If a family member develops a new medical condition they can obtain coverage for that new condition via the ACA exchanges.
Secondly, let’s identify the fiscal implications. Companies who provide health insurance, both ACA-qualified AND non ACA-qualified Short Term health insurance are required to contribute hundreds of billions of dollars in order to help stabilize the ACA health insurance marketplace and ensure those who are eligible for subsidies continue to receive them.
Section 1910 of the Affordable Care Act outlines the Health Insurance Tax which has resulted in $58 billion dollars being collected from health insurance companies since 2014. $14.3 billion of that was collected last year alone. That money is then used to stabilize the health insurance marketplace by ensuring that those who do qualify for federal health insurance subsidies continue to receive them. The health insurance tax is an essential risk mitigation system build into the ACA and without it premiums would be much higher and subsidies would be much smaller and available to fewer people.
The pertinent section of Section 1910 of the ACA was outlined in the final rules posted in the Federal Register on November 29, 2013. In those final rules the following paragraph outlines which type of health insurers are subject to this tax and I quote: “Section 9010(a) imposes an annual fee, beginning in 2014, on each covered entity engaged in the business of providing health insurance. Section 9010(c) provides that a covered entity is any entity that provides health insurance for any United States health risk during each year.” The important point to note here is that the tax is levied only on health insurance plans.
By restricting Short Term policies to 6 months this legislative body has unknowingly left these consumers with no other option but to enroll in similarly low priced “Christian Sharing Plans” which do not end abruptly but are also not insurance and as such are not required to contribute anything under the aforementioned health insurance tax. By shifting those dollars that would normally be spent on Short Term health insurance to Sharing Plans which are not insurance, you are undermining the structural integrity of the ACA and so is every other state legislative body that has restricted this type of health insurance to 6 months or less. As ACA-qualified policies continue to increase in price this trend is going to continue unless you take action to stop it.
Lastly, let me address the often repeated fallacy that Short Term health insurance policies are “junk” policies or that they are “skinny plans”. Whilst it is true that Short Term health insurance plans do not cover preexisting conditions, those that are offered by companies like United Healthcare do provide coverage for the vast majority of illnesses and injuries such as Cancer, Stroke, Heart Attack, Organ Transplants, Mental Nervous Disorders, Newborn care, Diabetes, Autism, Durable Medical Equipment, Home Health Care, inpatient and outpatient diagnostic testing as well as Nuclear Medicine, MRI and CT including a routine colonoscopy. They also provide coverage for inpatient and outpatient surgery, anesthesia as well as outpatient prescription drugs. They even provide first dollar coverage with no deductible required for outpatient doctor visits, urgent care visits and state mandated routine preventive care such as Mammograms, Cancer screenings and Contraceptives. That does not sound like a “junk plan” to me. Neither does it sound like a “skinny plan”. These policies also provide $2,000,000 in coverage annually for each insured member. So no, they do not provide all the protections that ACA-qualified policies do but they do provide very good coverage and for half the price. THIS makes them very attractive to those who do not qualify for health insurance subsidies.
Equally important to know is that both United Healthcare and National General which are the two largest Short Term health insurance policy providers in Illinois provide a national PPO network with their policies which includes in network access to Northwestern Memorial hospital, University of Chicago medical center, Rush university medical center and the Lurie Children’s hospital. None of those hospitals accept ANY individual ACA-qualified health insurance policy, not even those offered by Blue Cross Blue Shield of Illinois. No matter how much you pay for an ACA-qualified Individual policy in Illinois you cannot take your sick child to the premier Children’s hospital in the Midwest which is Lurie Children’s hospital. With non ACA-qualified Short Term policies you can walk right in the door at all four of those hospitals and hospitals around the nation.
In closing, because so many are now abandoning the ACA exchanges and can no longer safely purchase Short Term health insurance due to the aforementioned 6 month restriction and instead are now shifting those dollars to “Christian Sharing Plans” which are not insurance and as such do not contribute anything under the aforementioned health insurance tax. And because those who participate in “Christian Sharing Plans” have no policy, no contract and no regulatory recourse when Sharing Plans stop paying claims as they have done repeatedly. I am asking for this regulatory body to restore non ACA-qualified Short Term health insurance plans to 12 months in order to ensure that those who have been priced out of the ACA marketplace remain safely insured with actual health insurance without risk of running out of coverage in the middle of the year which can lead to disastrous consequences.
I thank you for your valuable time today. I will take questions if time allows.
Contrary to popular belief, both Democrats AND Republicans have had a long history of ensuring that Americans have access to coverage for preexisting conditions. In fact, a bipartisan piece of federal legislation requiring coverage for preexisting conditions existed long before the implementation of the ACA – Affordable Care Act, known colloquially as “Obamacare”. Public law 104-191 also known as HIPPA – Health Insurance Portability & Accountability Act – of 1996 outlined in sections 2741, 2742 and 2744 the role that both health insurers and state regulators must play in ensuring coverage for those with preexisting conditions. That law was supported by both Democrats AND Republicans for more than a decade before Obamacare.
Not long after HIPAA was signed into law, states began developing one or more state run risk mitigation mechanisms to ensure that those in the individual health insurance marketplace were ensured access to coverage for preexisting conditions. 35 states decided to develop High Risk health insurance pools. In Illinois, our High Risk health insurance pool was called ICHIP – Illinois Comprehensive Health Insurance Plan. The existence of ICHIP ensured that Illinois residents who purchase their own individual health insurance were guaranteed coverage for preexisting conditions long before Obamacare. In order to qualify for ICHIP coverage one would have to have been denied coverage from a health insurer in the individual marketplace due to a preexisting condition or have exhausted COBRA continuation coverage from a former employer. If that individual applicant had kept consistent health insurance coverage without a lapse of more than 63 days, they were guaranteed immediate coverage from Blue Cross Blue Shield of Illinois via ICHIP. If they had a lapse in coverage of more than 63 days, they would have to wait up to 6 months before preexisting conditions would be covered. These regulations provided a strong impetus for consumers to keep consistent health insurance coverage in place. This prevented applicants from ‘gaming the system’ by waiting until they were sick to purchase health insurance coverage.
10 other states chose to implement an “Individual market guaranteed issue mandate.” Under this state run risk mitigation system, residents of those states were guaranteed coverage for preexisting conditions from a variety of health insurers operating in that state. For example, in the state of Ohio, there were multiple health insurance carriers that had to “guarantee issue” 4% of their block of business to people with preexisting conditions during an annual ‘open enrollment’ period. During this annual open enrollment period, each health insurance carrier had to report to the Ohio Department of Insurance as to whether or not they “met their 4% guarantee issue quota”. Once one health insurer met their 4% quota, all future applicants with preexisting conditions were then referred to one of the other health insurers operating in Ohio who had not met their 4% quota and those remaining applicants would then be guaranteed coverage from that carrier. Under this innovative and intelligent state run risk mitigation system, all health insurers in the state shared the risk and everyone had access to coverage for preexisting conditions. Again, long before Obamacare. See page 10 of the Ohio “Guide to Health Insurance”
To learn more more about consumer protections under HIPAA law, download
“Protecting Your Health Insurance Coverage” from CMS –
Centers For Medicare and Medicaid Services.
There is nothing new under the sun.
You probably noticed something familiar about how Ohio’s annual “open enrollment” period. You should, because that is how risk in the individual health insurance marketplace is managed today under the ACA. We now have a national ACA open enrollment period which begins on November 1st and ends on December 15th of each calendar year. During this 45 day window, all Americans can purchase individual health insurance regardless of their health history and preexisting conditions are not excluded from coverage.
Why though is this annual open enrollment window only 45 days long? Why can’t we just buy health insurance whenever we want? Why do we have to wait until November each year? The reason you cannot do so is because if you were allowed to buy health insurance whenever you want, no matter how sick you may be, you would simply wait until you were sick to buy it and you would have no impetus to keep that coverage after you received whatever medical treatment you were seeking at the time. This is akin to buying home owner’s insurance after your home burns down or car insurance after you wreck your vehicle. Allowing such behavior would rapidly bankrupt all health insurers in a very short time.
The purpose of “insurance” is to manage future risk if and when it may occur. It is not to absorb all risk as it occurs. It is the consistent payment of monthly premiums by multiple policy holders which allows insurers to build the necessary financial reserves from which to pay your claims if and when they may occur. This is why the annual ACA open enrollment period is restricted to a 45 day window once a year. It forces Americans to keep their health insurance coverage in place throughout the year to ensure they keep consistent coverage for preexisting conditions between open enrollment periods. Consistent payment of those premiums allows the health insurers to build the necessary financial reserves to pay your claims if and when they may occur.
Republicans allocated $100 billion plus to ensure coverage for preexisting conditions
The aforementioned preexisting solutions to preexisting conditions were only two of the types of protections that could have been implemented had the House Republican’s “American Health Care Act” survived Senate scrutiny or, if the Senate “Better Care Reconciliation Act” had survived John McCain’s 2 a.m. thumbs down vote. Both bills provided solid protection for consumers with preexisting conditions. Page 45 of the American Health Care Act created the “Patient and State stability fund” which outlined on page 51 more than $100 billion over the first 8 years for states to re-establish state run High Risk health insurance pools or other state and federally run risk mitigation systems. This is nothing new. In fact, our Illinois health insurance exchange is a state/federal partnership exchange. Both entities working together to ensure coverage for preexisting conditions.
So, the evidence proves that Republicans not only want to ensure preexisting conditions are covered but they are also willing to allocate many hundreds of billions of dollars to ensure that they are. The evidence also proves that we did not need Obamacare to ensure coverage for preexisting conditions. The states already had risk mitigation systems in place long before Obamacare and those systems or similar systems could be implemented once again.
The question is not if Republicans want to cover preexisting conditions. The question is how they are to be covered going forward. Mandating that health insurers cover preexisting conditions is fruitless if there are no health insurers left to provide said coverage for preexisting conditions. So many health insurers have exited the individual health insurance marketplace since Obamacare, including the nation’s largest health insurers, United Healthcare, Aetna, Humana, Anthem Blue Cross etc. This has left states like Indiana with only one health insurer left for those who purchase individual health insurance and that carrier only offers a small HMO option.
State based risk mitigation systems currently employed via ACA waivers granted by the Trump administration.
Alaska applied for and was (finally) granted a 1332 waiver from CMS on July 11, 2017. That waiver allowed Alaska to separate the most expensive consumers from the rest of that state’s risk pool and as a result health insurance premiums dropped significantly this year. They will drop even more next year.
Wisconsin applied for and received an ACA waiver allowing them to create a state based reinsurance program sponsored in part by the Federal government. The “Wisconsin Health Care Stability Plan” will pay 50% of insurers’ claims between $50,000 and $250,000. The state projects it will spend $34 million of its own funds for these claims next year, with the rest coming from the federal government. The feds, however, aren’t expected to shell out any new money because reinsurance also helps the federal government. The lower rates mean it will spend less on premium subsidies for those who qualify. Those savings will be redirected to the stability plan.
These are just two examples of how state’s can better manage risk at the local level by being granted waivers from the “one size does NOT fit all” government take over of the American health care system known as “Obamacare”. There will be more to come thanks ONLY to the leeway allotted to state’s by the election of President Donald J. Trump.
The truth about Trump not defending the latest legal challenge to Obamacare
President Trump’s D.O.J. has chosen not to defend Obamacare against the latest legal challenge to it led by Texas and 19 other states. That case argues (legitimately) that since the SCOTUS found the “Individual Mandate” constitutional in 2012 by defining it as a “tax” and later Republicans passed tax reform which included repeal of the Individual Mandate. The Individual Mandate can no longer be constitutional because there will be no more penalties assessed for not buying health insurance as of January 1, 2019. The D.O.J. is also arguing that two other Obamacare provisions should be struck down — one requiring insurers to cover those with preexisting conditions AT THE SAME PRICE AS THOSE WITHOUT PREEXISTING CONDITIONS. The Leftist media cabal reporting on this case conveniently leaves that last part out. That does mean that if the state led case against Obamacare succeeds, that preexisting conditions would not be covered. It simply means that those with certain preexisting conditions could pay more than those without preexisting conditions which is how the system worked prior to Obamacare.
I discussed this issue in greater detail with Dan Proft and Amy Jacobson on Chicago’s Morning Answer on WIND. Click below for to watch the replay:
The next likely chance to achieve any kind of legislative change to the ACA (Obamacare) will be on November 6, 2018, which is the midterm election. If Republicans then have enough Senators who are actually willing to cast a yes vote they will then deliberate throughout 2019 until the last date to use the Budget Reconciliation process (requiring only 51 votes). Since it is unlikely that Republicans will achieve a 60 vote majority in the U.S. Senate, they will have to rely once again upon Reconcliation. The final date to pass legislation using Reconcilation is September 30, 2019. A month later, the next annual ACA open enrollment period begins again. There will be no changes to health care policy until that ACA open enrollment period ends on December 15, 2019. This means the earliest we might see legislative changes to the ACA will be early 2020.
Now for the GOOD news
The good news is that like his predecessor, President Trump also has a “pen and a phone” and he’s been using them. On October 12, 2017 he signed this executive order which was designed to restore consumer choice in the non-ACA marketplace and to spur competition “across the United States”. After considerable hand wringing from regulators and opposition groups, H.H.S. finally issued a final rule pertaining to the President’s executive action on August 3, 2018. This final rule makes two important regulatory changes. Both will become law on October 2, 2018. On that date, non-ACA Short Term health insurance plans will once again provide consistent uninterrupted health insurance coverage for up to 364 days. This is a very welcome change since our prior president reduced the amount of time consumers could own non-ACA Short Term health insurance plans to a maximum period of 90 days.
This action by former president Obama exposed consumers to the additional risk of not only facing up to four separate deductibles in one year but also facing the risk of not qualifying for a new 90 day policy due to a preexisting condition. This is true because non-ACA Short Term health insurance policies do not cover preexisting conditions nor do they cover other ACA mandated benefits such as drug rehab therapy and mental health parity. As such, they are much less expensive than ACA qualified health insurance plans and are very popular among the millions of Americans who do not qualify for health insurance subsidies. President Trump’s executive order also requires that these plans be renewable for a period of up to 3 years.
PLEASE CALL ILLINOIS GOVERNOR BRUCE RAUNER’S OFFICE
Unfortunately, Illinois legislators are trying to stop President Trump’s reforms to the non-ACA Short Term health insurance marketplace. If successful, Illinois consumers will continue to risk paying up to four deductibles in one year. The bill that stops President Trump’s reforms is HB2624, which passed both of our chambers at the end of May, 2018 and was sent to Governor Rauner in late June. The amended version of HB2624 limits non-ACA qualified short term health insurance plans to a maximum duration of less than 181 days and it prohibits renewals. HB2624 also restricts insured members from purchasing a new short-term plan from the same health insurer within 60 days of the termination of a previous short-term plan. This will further restrict consumer choice and increase out of pocket costs exponentially for Illinois consumers seeking to escape from Obamacare. Please CALL Governor Rauner’s office now and ask him not to sign HB2624.
Governor Rauner’s Chicago office: (312) 814-2121
Governor Rauner’s Springfield Office: (217) 782-0244
Governor Rauner’s Email Address: email@example.com
UPDATE: THANK YOU GOVERNOR BRUCE RAUNER! – 08/27/2018
THANK YOU Governor Rauner for using your VETO power to stop HB2624. This is GREAT news for Illinois consumers who do not need coverage for preexisting conditions and who do not qualify for ACA (Obamacare) subsidies. Thanks to Governor Rauner (and President Trump) as of October 2, 2018, non-ACA qualified Short Term health insurance policies will once AGAIN provide consistent, uninterrupted coverage for up to 364 days (not just 90 days) and they will be renewable (for the first time ever) for up to 3 years!
Click below to listen to my commentary on Chicago’s Morning Answer – 8/22/2018
Expanding Association health plans
The second regulatory change outlined in the final ruling is the expansion of AHPs – “Association Health Plans”. By “expansion”, this order refers to expanding upon the law that has regulated AHPs since 1974. That law is called ERISA – Employee Retirement Income Security Act. Traditionally, ERISA required AHP members to share a professional or other common interest in order to form an association and then offer health insurance benefits to members. Under the new final rule, those who enroll in AHPs after October 2, 2018 can purchase AHPs based on geographic location alone or by the traditional definitions of sharing a common profession or trade. And, new Associations can be formed solely for the purpose of offering health insurance to new Association members. This was heretofore prohibited.
Most importantly, unlike many of the traditional AHPs which offered substandard coverage resulting in multiple lawsuits. The new AHPs must provide many of the same consumer protections that ACA-qualified plans are federally mandated to cover such as keeping your child on your plan until the age of 26, covering preexisting conditions and including the same calendar year maximum out of pocket spending limits which are in place now for ACA-qualified plans. Those limits this year are $7,350 for an individual policy and $14,700 for a family policy. The new AHPs also cannot impose annual or lifetime maximum coverage amounts which is a welcome improvement to traditional AHPs. AHPs that cover employers with at least 15 employees must also cover Maternity.
Even though all of the aforementioned consumer protections must be included with the new AHPs, they are not required to cover all 10 “Essential Health Benefits” that ACA plans are required to cover. So, if you need coverage for substance abuse disorders, mental health parity or pediatric dental and vision, you may still want to consider an ACA-qualified plan which may be much more expensive for those who do not qualify for federal health insurance subsidies. Either way more options are always better than less.
No lying Leftists, Trump is not trying to “end coverage for preexisting conditions“. His D.O.J. however has chosen not to defend Obamacare against the latest legal challenge to it led by Texas and 19 other states. That case argues (legitimately) that since the SCOTUS found the “Individual Mandate” constitutional in 2012 by defining it as a “tax” and later Republicans passed tax reform which included repeal of the Individual Mandate. The Individual Mandate can no longer be constitutional because there will be no more penalties assessed for not buying health insurance as of January 1, 2019. The D.O.J. is also arguing that two other Obamacare provisions should be struck down — one requiring insurers to cover those with preexisting conditions AT THE SAME PRICE AS THOSE WITHOUT PREEXISTING CONDITIONS.
I put that last part in caps because the lying Leftist propagandists at Politico, WAPO and every other Left wing rag have left that important part OUT. The truth is, if this legal challenge prevails (and that’s a BIG if) those who have preexisting conditions would simply pay more than those without preexisting conditions and coverage for preexisting conditions would still exist as it did for decades before Obamacare. For responsible reporting on this issue read the following article from the Washington Examiner.
By May 1st of 2018 United Healthcare, Aetna, Cigna, Humana, Blue Cross and other carriers will once again be able to legally offer non-ACA (Obamacare) Short Term health insurance plans that will cover you for an entire year. This is thanks only to President Trump who reversed Barack Obama’s previous order restricting these much less expensive health insurance plans to 90 days of maximum policy ownership.
This is very good news for millions of healthy Americans who do not qualify for federal health subsidies and as such cannot afford to pay for individual health insurance that now costs more than their mortgage payment. THANK YOU President Trump!
Please note: Non ACA-qualified Short Term health insurance plans are not required to cover preexisting conditions or certain ACA (Obamacare) mandate “Essential Health Benefits” that are covered with ACA-qualified plans. These benefits are:
1.) Maternity and newborn care.
2.) Mental health and substance use disorder services.
3.) Certain Preventive care benefits such as routine mammograms and cancer screenings are covered with Consecutive Short Term health insurance plans.
4.) Pediatric services (including both oral care and vision care).
Group health insurance for couples ensures access to Chicago Teaching hospitals for small businesses owners.
In November of 2015, Chicagoland residents were shocked to learn that Northwestern Memorial hospital, University of Chicago medical center, Rush University medical center and the Ann & Robert H. Lurie Children’s hospital would no longer accept patients who have ACA (Obamacare) qualified individual health insurance plans.
This action led to a significant increase in the purchase of small group health insurance policies which still provide national PPO networks and still ensure access to the aforementioned teaching hospitals in Chicago.
For small corporations who could afford to insure themselves and 70% of their eligible full time employees (the minimum participation requirement), purchasing small group health insurance was a costly fix to the new narrow networks in the individual health insurance marketplace.
The ability to purchase group health insurance for you and your full-time employees is well known. What is not well known is the fact that you can purchase a small group health insurance policy without insuring your employees during a small window each year. This year that window begins on November 1st and ends on December 15th. The same time period that 2018 ACA Open Enrollment for individual plans begins and ends.
During this little known ‘relaxed underwriting’ period, an owner of a small corporation (less than 50 full-time employees) can purchase small group health insurance while employees ‘waive’ coverage without producing an eligible waiver. Normally, 70% of all full-time employees must participate in a group health insurance plan unless they have an eligible waiver such as an offer of group health insurance from a spouse’s employer or Medicare and Medicaid coverage. If you do decide to offer coverage to your full-time W2 employees during this Special Enrollment period, you do not have to pay any portion of your employee’s premium. Normally, you must pay 25% of your employee’s premium.
If you are a small business owner who is seeking to purchase small group health insurance and cannot afford to insure your employees or, your employees simply do not want to participate in a group health insurance plan. Now is the time to learn more about “relaxed underwriting”. The cost for group health insurance is now commensurate with individual health insurance but the PPO network is much larger and far more inclusive than any of the narrow networks now available in the individual marketplace. Want to learn more? Click on “contact” at HealthInsuranceMentors.com