Healthcare Reform School, Lesson 19 - Top 3 Questions About the Law

Welcome back to class.  Finals are right around the corner, because the Healthcare Exchanges open on October 1, less than two weeks from now.  This blog will give some basics about the exchanges.  Many people are wondering how they will work and what the insurance will look like on the exchanges.  I will answer the most common questions I have heard.  If you have any questions please send them to me by responding to this blog or sending them directly to me.

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These are the most common questions with the most succinct answers:

1. So people who don't work get free insurance?
2. How will it affect my small business?
3. How much will the insurance cost?

Following are my answers:

1. So people who don't work get free insurance?  The follow up question for this is "why should I work at all?"  My answer is typically silence...........   The real question seems to be "How much do I have to pay in taxes" to support this law.  The short answer is approximately $67 per year per individual plus a 5.5% to 7.5% tax on our health insurance premiums.  There are six new taxes imposed to help pay for this law. Some of these new fees and taxes will be paid directly by health insurance issuers,while others will be paid directly by the sponsors of self-funded health plans. Some fees and taxes begin in 2013 and 2014,while others are imposed in later years. Some are temporary, and others are permanent. The bottom line is that, in total, these new fees and taxes will impact premiums for all individuals covered under fully insured or self-funded plans and policies.
• Patient-Centered Outcomes Research Institute (Comparative Effectiveness) Fee. 
• Cost is $1 to $2 per year
• This will be phased out after 2019.
• Annual Health Insurance Industry Fee
• 2%-4% tax on insurance plans
• Expected to be between $8 Billion to $14 Billion per year
• Transitional Reinsurance Program Assessment Fee
• $63 per individual
• Paid by health insurers
• Collected for 2 years only, 2015 and 2016
• Risk Adjustment Program and Fee
• Paid by insures in the individual marketplace in each state that have a lower risk pool of clients.
• extimated to be between $1 - $2 per individeaul per year
• Marketplace (i.e., Exchange) User Fees
• A tax of 3.5% of monthly premiums on issuers of plans and others that may profit from the market place
• This will be a permanent tax
• Cadillac Excise Tax (tax for high-cost plans)
• This tax starts in 2018
• It is a 40% tax on the portion of a health insurance premium that exceeds a very high limit....which is $10,750 annual premium for an individual.
2. How will it affect my small business
• It will not affect your business expenses.
• Small businesses are not required to provide health insurance to employees
3. How much will the insurance cost?
• Individual plans will typically be much more expensive.  By factors of 2 or 3 times in many cases.
• Many individuals currently keep their costs down by keeping their deductibles higher and eliminating benefits that they do not want
• These options will not be available next year, so premiums will be much higher.
• Individual insurance will be comparable in cost to group plans that are really rich in benefits.

To learn more about specific topics, review the list of my previous blogs below.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 -  Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean? 
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses 

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Healthcare Reform School, Lesson #18...Advice from an Expert

Welcome back to Healthcare Reform School.  I have been disseminating information about the Affordable Care Act through this blog for over 4 months. As the full enforcement grows closer, I feel like I need to give some advice to those out there who currently have to buy their own health insurance.  So please share with those individuals you know that are in that position.

The best advice I can give is to prepare for the new law.  Why should one prepare, because your insurance premiums could double or triple starting January 1!

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Many people (most people) want nothing to do with health insurance.  Every day I talk with individuals that don't have time to spend looking at their bills or worrying about their health insurance policy. So I will give real quick advice for individuals in specific categories.  Find the category you fit in and check out your best course of action.

As a broker I represent Blue Cross, United Healthcare, Assurant, Aetna & Humana.
The two companies with the best strategy to keep your individual policy prices stable up through 2015 are United Healthcare and Assurant.  

• For all plans in effect before March 23, 2010.
• Your plan is grandfathered in and will not change
• If you like it, KEEP IT, don't change.
• For all plans purchased after March 23, 2010
• Blue Cross policy holders
• Your plan is going to be dropped on December 31, 2013 and you will need to buy a new plan that will have many benefits you may not need which will increase your premiums substantially.  Your premium could double!
• You should shop for a plan now and put a new plan in place.  
• Humana and Aetna policy holders
• You have an option to convert to a new plan starting January 1, with higher premiums and benefits that you may or may not need.
• You have an option to stick with your current plan until the anniversary of it's effective date.
• You should shop for a plan that keeps your premiums stable until the end of August 2014.
• United Healthcare & Assurant policy holders
• Your policy will remain the same through 2014.
• You should review your plans and make sure you like the way they are set up.  If you want to lower your premiums or increase your benefits, now is the time to do it by taking advantage of choices that will not be available after January 1, 2014. you will not be able to change existing plans after that.
• Policy Holders with companies that I have no mentioned above
• Check with your insurance provider to see if they are converting their plans on January 1.
• Many smaller health insurance companies are dropping out of the market all together.  Yours may be one of them.
•  For anyone shopping for insurance
• Shop with a agent/broker because you will get the most options that way.

I try to keep these blog posts short and simple.  So that is it for now.  Stay tuned for more next week.  Review all my lessons from the last four months below.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 -  Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean? 
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses
Lesson #17 - Options for Individuals and Small Businesses