An estimated 10 million individuals have either lost employer sponsored group health insurance or anticipate losing their coverage in the next year, due to no fault of their own. The nation’s economic slowdown over the past few months has caused a seismic impact in the level of risk individual’s face by being without health insurance.
The current state of affairs has led to a new awareness of acronyms. To name a few: COBRA (The Consolidated Omnibus Budget Reconciliation Act); ACT (Affordable Care Act; SEP (Special Election Period); STM (Short-Term Medical Plans).
Swimming upstream, against the current while facing the possibility of an unexpected medical occurrence, requires proactivity. Replacing the “what if” a medical issue arises with “if only” I had health coverage will address this dilemma. Lack of health coverage can cause a catastrophic impact on financial well-being.
This dire strait has placed affected individuals in unchartered waters that can present challenges and confusion. To help navigate to a safe harbor consider the following 5 options:
The Consolidated Omnibus Budget Reconciliation Act (COBRA): Employers with at least 20 employees are required to offer COBRA giving the employee the right to choose to continue their former group health benefit provided by their group health plan for a limited time period. A key factor in this scenario is cost. The monthly premium represents what the employee had been paying, the employer’s share and an administrative fee. Cost can be a prohibitive factor. Note: You won’t be eligible for COBRA if your employer has closed permanently or stops offering a health care plan.
The Affordable Care Act (ACA): In 2010 legislation passed by Congress became law and implemented in 2014. An individual can qualify for a Special Enrollment Period (SEP) if they, or anyone in their household, lost qualifying health
coverage in the past 60 days OR expects to lose coverage in the next 60 days. The Marketplace plans offered by insurance carriers in Georgia can be found at www.healthcare.gov. A key component of an ACA plan is individuals cannot be denied coverage for a pre-existing medical condition. They can qualify for subsidies based upon projected year end income as shown on the Federal tax return. These subsidies work on a sliding scale, limiting what you are personally required to contribute toward your premiums and based upon the federal poverty level. Income can be no more than 400 percent of the federal poverty level.
Fixed Indemnity Benefit Plans: These plans require medical underwriting and individuals can obtain savings of 40% and more. As the name implies the benefits are a fixed dollar amount for the medical services provided. Typical plans comprise a PPO Provider Network offering favorable network pricing while not being limited to only network providers for care. Plans do not fall under requirements established by Congress for ACA plans and are subject to medical underwriting where coverage can be denied or a pre-existing condition excluded from coverage. There is no open enrollment period and can be purchased year round.
Short Term Plans: These plans were formerly designed for interim periods of a short duration and have transitioned into multiple year coverage. Similar to the fixed benefit plans, they utilize PPO provider networks where individuals can seek care in & out network providers. Plan benefits include coinsurance (percentage), copay (dollar) benefits and a combination of both.
Health Care Sharing Ministries: Health care sharing ministries are organizations in which health care costs are shared among members who have common ethical or religious beliefs. A health care sharing ministry does not use actuaries, does not accept risk or make guarantees. The coverage is not considered health insurance and consumers who face problems with a healthcare sharing ministry, such as when a claim is not paid or a service is not covered, are not protected by their state’s insurance department.
Ancillary or Voluntary Benefits: Health insurance is important but may not fully protect against risk. “Layering” health plans with ancillary benefits covering things such as cancer, heart attack, or stroke will provide lump sum cash payments and/or pay benefits over the life of the medical issue. These plans will help reduce or eliminate the cost of out-of-pocket expenses.
Partnering with a licensed Health Insurance Advisor who does not charge a fee for services can mitigate the challenges an individual faces while seeking affordable and meaningful health insurance. Selecting an Advisor based upon your level of trust, combined with their experience, will put you on the path to avoid buyer’s remorse.