Healthcare Solutions Team - Steve Breer: October 2013

Thursday, October 31, 2013

Healthcare Reform School - Lesson 22 - Review of Purchasing Options

Hello all of you wonderful people. Today's lesson will be about the options that are available for purchasing health insurance. The two major options are on the Federal Marketplace or on the Private Marketplace. I will explore these two options.

As most people know, the Federal Marketplace website has experienced substantial problems with getting people signed up. Another concern about the Federal Marketplace website with many people is the protection and privacy of their personal information. The privacy issue stems from the fact that shoppers need to enter a lot of personal information before being presented with any types of options for purchasing insurance.

But I am here to tell you that the FEDERAL MARKETPLACE IS NOT YOUR ONLY OPTION. This very important fact has not been advertised at all by the federal government. Zero, Zilch, Nada.
Actually buying insurance from the Private Marketplace (not the Federal Marketplace) is the best option for many Americans. Taking this route before December 31st will be the best move for many young and healthy Americans. But this route will always be available during open enrollment. Following is a list of reasons that buying from the private market is the best option for that group.

UNDERWRITING - Insurance charge less for young healthy people. It is the job of underwriters to classify people and assign premiums. This function of insurance companies is eliminated starting January 1st.
OPTIONS - Currently there are many options available that can help reduce the cost of health insurance premiums. Most of these options go away in 2014. For example, every single person will have maternity coverage starting next year, young and old alike. Most people may not need maternity, but the mandated maternity coverage is reflected in premiums.
PRICE - Because of underwriting a options. The price is generally lower for policies that are written off of the exchange before January of 2014.
DOCTORS NETWORKS - This is an extremely important element of health insurance. I have reviewed many options on the Federal and State Marketplaces. Some of the companies have very small, meager doctors networks. This means that fewer doctors and hospitals will take the insurance, which limits your options for care. Even Blue Cross/Blue Shield has cut down their networks for the plans they are offering on the exchange, especially at the lower cost levels.
PPO's -vs-HMO - This is another extremely important element of health insurance. The lower level plans on the Federal Marketplace are almost 100% HMO (Health Maintenance Organization) style networks. Currently the popular choice for Doctors Networks when buying health insurance is a PPO (Preferred Provider Option). HMO's were popular for a short while in the 1990's, but the model of health insurance proved unpopular because the HMO requires referrals from your primary care physician to see specialist and the HMO has the final decision on approving medical procedures, not the doctor providing the service.
Quality of Care - Because of the Doctor's networks and the style of plan, you are likely to get a better quality of care by purchasing a plan of the marketplace. This is tru even after Janaury of 2014. Plans will still be available from insurance companies that are not on the marketplace and that have not reduced their networks and still provide the same care.
Exact Same Benefits - The 10 Essentail Health Benefits mandated by the ACA will be built into every single major medical health insurance plan purchased after 2014 starts. It does not matter if the plan is purchased on or off of the exchange.
Deductibles - Believe it or not, there are many better options for lower deductibles when buying health insurance from the private exchange. To get a low deductible from the Federal Marketplace, the monthly premium is very high. The private marketplace now and in 2014, will have options to reduce the deductible while keeping monthly premiums low.

I try to keep these blogs short and sweet and just hit the major points, if you have questions, just post a response.
If you would like to learn more, than choose the topic from the lessons below to learn what normal people will want to know.

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

Lesson # 19 - Top Three Questions About the Law

Lesson #20 - Open Enrollment is Here!

Lesson #21 - What Should My small Business Do Now

Thursday, October 10, 2013

Healthcare Reform School - Lesson 21 - What should my small business do now?

Welcome back. What a crazy week it has been in the New World of health insurance! The State and Federal Marketplaces (exchanges) are open and were a big topic of news stories both national and local. I of course was listening with reat interest. Sadly, much of what I heard was misleading, I don't think it was intentional, but there is so much to learn and so many intricacies in this law that it is actually hard to get it right. I am sure that the newscasters had researchers create the stories, so hopefully if the researchers did their job they would have a good and true story. Unfortunately many of the stories told only a small part of the story.

One part that of every story that was true is that the State and Federal marketplaces are woefully inadequate to handle the volume of visitors. I still have not been able to make it all of the way through an application process and I only know of one agent who was able to. So while I am authorized and accredited to help clients purchase policies through the exchange, I am putting these clients off for a few weeks until the bugs are worked out. After all the insurance purchased on the exchange is not effective until January 1, 2014.

Back to the topic of my blog "What should my Business Do Now". In terms of insurance the most important thing to know is that this law does not affect businesses with less than 50 full time equivalent employees. So you are not required to change anything.
But here is what I recommend...If you have group insurance plan for your small business change it to a Health Benefits Arrangement (HRA). First I will explain the reason and then I will explain what this is.

Change to an HRA to reduce the financial exposure inherent in small insurance groups!

This means you will drop your current group plans
Set up an HRA theough an On-Line Benefits Provider, Like Zane Benefits.
Each of your eligible employees will work with an agent/broker to purchase a customized health insurance plan that fits their needs.

2. An HRA is a method for an employer to pay a predetermined fixed benefit amount to each employee. And the employee is required to utilize that benefit for health insurance and/or health qualified expenses.

The business partner I have chosen to administer the benefits for clients that choose to go with an HRA is Zane Benefits because they take care of everything on-line, the employer only needs to spend literally five minutes per month to review the information. Everything thing else runs very smoothly, the and the employees see the benefits come through on their pay check so they are reminded each month of the health benefit the they are getting.

You may be wondering how an HRA reduces financial risk. And the simple answer follows. A small group insurance plan is its own "Pool of clients" or "Group" in the eyes of an insurance company. If a member of that group has a lot of claims one year, then the the insurance companies are allowed to increase the premiums on everyone in that group to recoup their expenses. By law insurance companies can make 20% profit, so they will increase the premiums as much as they can. In a small pool, the increases can be really high, because there are fewer clients to mitigate the large expenses of medical claims. However once the small group plan is dissolved, the insurance company has no recourse on the members of the old group, and now that there is guaranteed acceptance by insurance companies for everyone who applies, they have no recousrse on the individual that needed (and may still need) medical care.

Another advantage of the HRA is that the employees are allowed to utilize the benefit you provide to purchase health insurance on the public exchange. This could mean that they will get a federal subsidy, in addition to the benefit provided through the HRA. This could lower the cost of their private insurance dramatically.

For more information on getting set up with an HRA get in touch with me, Steve Breer. 773-972-5343.
To review my previous lessons see below and click into the ones that look interesting to you:

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law

Lesson #20 - Open Enrollment is Here!

Thursday, October 3, 2013

Healthcare Reform - Lesson 20 - Open Erollment is Here!

The exchanges are open, the exchanges are open! This is the largest event in domestic policy since Medicare opened up for business, "for those Americans who until now were shut out of the health insurance market through no fault of their own, Tuesday was a big day. No longer do they have to fear bankruptcy after a lifetime of work because of health and employment factors outside their control — an unnecessarily cruel feature of the system under which the nation has operated." Chicago SunTimes and medicare actually has a lot of responsibility in making the Affordable Care Act Work.

Health Insurance Marketplaces officially opened in all 50 states! The interest level of the American public was very high, for example before 7:00 a.m. on Tuesday, October 1, more than 1 million people had already visited the websites.
Some of the states had better results on the websites than others. There are three types of websites on the public Marketplaces.

courtesy of renjith krishnan digitalimages.net

State Run Marketplace
Federally Run Marketplace
State/Federal partnership Marketplaces.

To figure out which your state runs, you can pretty much just look at your states' governor. Republicans have pushed back against this law since day 1, and republican governors have not created exchanges, so those states are ran by the federal government.

Enough about that, oh wait, just one more thing...The shut down of the federal government! How does the shut down effect the Affordable Care Act? Well from what I have read the expenditures in the Affordable Care Act have been categorized as mandatory and therefore are not immediately affected by funding pitfalls. And therefore the employess integral to the Affordable Care Act, such as website developers and navigators, are still working. All of the insurance companies selling insurance on the public exchange are private companies, so obviously are not affected by a government shutdown

The volume of visitors has continued to be very high. This is not all good news since the websites have been difficult to access due to high traffic volume. The official numbers of actual insurance applications completed has not been publicized, but from everything I have heard, it is a very low number. If people are unable to access the websites and purchase health insurance on-line then the system could be in big trouble. We can only hope that the accessibility and functionality issues will increase over time. They should be able to handle millions of people a day, because they do serve a very large country of over 300,000,000 people.

I have personally receive phone calls from people trying to get onto the exchange and asking for my help to get insured. I can help them, but it is hard when the technology is not working. Just to put some peoples minds at ease, the insurance that is purchased on the exchange will not go into effect until Janaury 1. The deadline for applying for a January 1st effective date is December 15th. And the open enrollment period goes all the way through March 31 of 2014. This first enrollment period is a marathon, not a sprint.

The technolgy on the marketplace has not been avaialble to brokers/agents until October 1. so I have not received a lot of training on that yet. I have receive a lot of product training on the providers and product on the exchange. One of the most significant developments that I have learned during company wide meetings with insurance company executives over the last month is about the variations in network coverage between plans that are sold on the Public Marketplace - vs - on the Private Marketplace. It turns out that the plans on the publice marketplace have very narrow networks and mostly are HMO style plans. The plans on the Private Marketplace have the same robust networks and PPO style options that people have become accustomed to. So this is a big buying decision. For thos individuals and families that do not qualify for a subsidy based on their income, time should not be spent searching for plans through the public marketplace. Better plans will be available on the private marketplace with all of the same mandated coveraes but with better doctors and pharmacy networks.

One other thing before I wrap up. One of the questions driving traffic to the Marketplace is "How expensive is it". That information is on the exchange, it is just clunky and difficult to access right now. But it is expensive...unless you qualify for a subsidy. Which means the government will pay for some of the cost of your premium. If yo do not qualify for a premium than people are much better off buying insurance on the private exchange, just like today.

My last 19 blog posts are listed below. If you want to find out more about a specific lesson, then scroll down through and learn to your hearts delight.

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert

Lesson # 19 - Top Three Questions About the Law