Health Insurance: Who knows? Who cares?

Someone once told me to never sign my name on anything I haven't had a chance to read and understand first. When it came to selecting a health plan, how many of us can honestly say that we did this? Whether your plan is through your emp

loyer, you applied directly through a carrier or you selected a plan through the exchange marketplace, many of us are far too busy to properly analyze our options. Even after soliciting help from friends or a certified broker or navigator, most people are still unclear as to what their actual benefits are. While it may not be crucial to understand every little detail, understanding the differences between things such as a deductible vs a copay, an HMO vs PPO, how different plans cover prescriptions, etc., can mean thousands of dollars in savings to you if you're positioned correctly. Selecting a health plan is much more important than just something to cross off of your "to-do" list. Here are some topics that come up a lot in everyday conversations which should help you navigate these waters more confidently.

The individual mandate for health insurance is gone...

Great! This means that the government is no longer going to penalize me for not having minimum essential coverage! Yes....and no. The individual mandate to maintain minimum essential coverage has indeed been lifted, but won't take effect until 2019. That means that anyone who doesn't have coverage in 2018 will be penalized upon filing taxes. Currently, the penalty is $695 or 2.5% of your income (capped at $2,085) for each adult in the household without insurance. If you or someone in your household has coverage for a portion of the year, the penalty will be a pro-rated amount for every month that you don't have a plan in place. Many people do not know that the penalty IS NOT assessed if the period of time you didn't have insurance for was 3 months or less. This being the case, it opens up the conversation about Short-Term health insurance plans, which are a great option for healthy individuals looking to save money on premium.

What in the world are Short-Term medical plans and how do I get one???

With premiums and deductibles being so high on traditional health plans, Short-Term medical policies are an amazing tool to give you both piece of mind and many more pieces of paper in your wallet! Short-term plans do not cover pre-existing conditions, do not qualify as minimum essential coverage and can only be purchased for up to 3 months at a time - so why would someone want something like that? These plans are not designed to act like traditional coverage. What they do is provide is a cap on your out-of-pocket expenses, should something unexpected happen, without the burden of having to pay an outrageous amount of premium. I often recommend these plans to people who are healthy and tell me that they'd prefer to go without insurance, self-insure throughout the year, and then pay the penalty at the end. This works if the person stays healthy all year-round, but if an unforeseen medical incident were to take place, there would be no cap on the amount of money they would be responsible for. By putting a short-term plan in place for 1/5 of the cost, this person can save money by not purchasing a major medical policy but can also sleep at night knowing that they wont have a $100,000 bill if they are to end up in the hospital. Also, as I mentioned briefly above, there is no penalty if a person is without coverage for 3 months or less. This means that someone could have a major medical plan for 9 months out of the year, drop that plan and pick up a short-term plan for the last 3 months of the year. This person would not be assessed a penalty, wouldn't be a single day without coverage and would have saved money on premium for the last 3 months of the year! With the current state of the health insurance industry, consumers are thinking of all types of different ways to find something that works for them. Hospital Indemnity policies are also great to couple with either type of insurance to cover high deductibles and coinsurance.

What's next?

With so much uncertainty surrounding health insurance, it's tough to predict what the lay of the land will look like 9 months from now. With the individual mandate going away, the obvious reaction is that it also means premiums will skyrocket (even more than the 33% increase most of us saw last open enrollment). However, without other parts of the Affordable Care Act being repealed, higher premiums would cost the federal government an unsustainable amount of money in advanced premium tax credits. Reducing the cost of prescription medications will go a long way towards keeping premiums down as much as possible, but will it be enough? Will people be able to apply for insurance year-round, or will we still be subject to applying during open enrollment and special enrollment periods? Will pre-existing conditions still be required to be covered? Will I be able to purchase plans across state lines?

While none of these questions are clear at this point, when the time comes we will all need to know how these decisions will impact us. There's a lot of speculation and theories as to what we should do in these situations. One thing we can be sure of is that regardless of the circumstance, Insurance Financial Resources will be here to help you customize a plan that works best for you.

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