Archive | The self-employed

ALCHEMY – CHANGING A BRONZE PLAN INTO A GOLD PLAN (ALMOST)

The question most frequently asked by my clients is how can I afford my premiums, and medical expenses at the same time?

The answer in the past has boiled down to either purchase the least expensive Bronze plan, to save money or a Gold or Platinum plan to save medical expenses.

For 2018, individual health insurance rates will be increasing, which means that new and existing clients will be financially impacted more than in past years. Clients who purchase their coverage outside of the Covered California Exchange, because they not eligible for a federal premium subsidy, must find solutions to lower their premiums and medical expenses.

There is a strategy that I recommend to my clients: enroll in lowest premium Bronze plan available, and couple the plan with additional coverage to pay for or reimburse the high deductible medical expenses associated with these plans.

• THIS STRATEGY IS ONLY EFFECTIVE IF THE COMBINED MONTHLY PREMIUMS OF THE BRONZE PLAN, AND ADDITIONAL COVERAGE ARE LOWER THAN THAT OF A GOLD PLAN.

The types of coverage that I recommend fall into two broad categories: (i) one that reimburse for any medical expenses cause by any accident and/or critical illness; (ii) a limited benefit hospital admission or indemnity plan that will reimburse for any medical expenses generated in the hospital because of an accident or illness.

THE FOLLOWING IS A PROPOSAL FOR AN EXISTING CLIENT WHO RESIDES IN WEST LOS ANGELES:

The father is 42, the mother is 38, and the two children are under 14. The family is not eligible for a subsidy, and purchases their coverage Off Exchange with Blue Shield because they want a PPO.

BLUE SHIELD PPO MONTHLY PREMIUMS, DEDUCTIBLE, MAXIMUM YEARLY FINANCIAL LIABILITY:

• Gold PPO $1,852 No deductible, $6,000 individual / $12,000 family financial liability

• Silver 70 PPO $1,490 $2,500 deductible, $7,000 / $14,000 family financial liability

• Bronze 60 PPO $1,180 $6,300 deductible, $7,000 / $14,000 family financial liability

ACCIDENT AND HOSPITAL INDEMNITY PLANS:

• Accident Only – $55 monthly premium for family. $6.750 individual or $13,500 maximum reimbursement (includes $250 deductible)

• Accident + Critical Illness – $55 monthly premium for family. $6,350 individual or $12,700 maximum reimbursement (includes $500 deductible) plus $7,500 in Critical Illness coverage (only coverage for insured and spouse)

• Hospital indemnity – $150 monthly premium for family. $5,600 per person with no deductible. Pays in addition to any other coverage.

THE TOTAL COMBINED APPROXIMATE MONTHLY PREMIUMS FOR BRONZE PPO PLUS ADDITIONAL COVERAGE IS $1,235 VERSUS $1852 FOR A STANDARD GOLD PPO.

• A POTENTIAL MONTHLY SAVING OF $617 PER MONTH OR $7400+ PER YEAR.

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ANTHEM BLUE CROSS CUTS COVERAGE IN CALIFORNIA

On Monday August 1st, Anthem Blue Cross announced that it is pulling out of the individual insurance market in California, except for three regions in Northern California: Redding, Santa Clara County, and Stockton/Modesto.

  • All other ACA individual Anthem plans will be terminated December 31,2017. This decision does not affect those who have employer based insurance or individuals enrolled in “grandfathered” plans (plans purchased before March 2010).

Anthem’s Medicare Supplement, Medicare Advantage, Part D Drug Coverage, and individual dental, vision, and life policies will be continued to be offered in California.

According to Covered California’s most recent enrollment snapshot from March, Anthem currently covers about 252,560 Obamacare customers, 61% of whom live in regions where the carrier will pull out of the market.

Those numbers do not include people who have purchased Anthem plans outside of the exchange. A Covered California spokesman said in an email that an additional 150,000 Anthem plans are estimated to be in place outside the exchange.

  • How will the termination of your Anthem policy affect your coverage?

On-Exchange plans through Covered California will be moved to another carriers’ plan offering similar coverage if the member does not take any action during the Open Enrollment period to directly change carriers and plans.

The full details of how this will work is still being formulated, and more details should be released shortly.

For those with Off-Exchange plans, you must move to another carrier offering plans in your zip code. The enrollment must take place on or before December 15th, to have a January 1st effective date.

In 2018, Blue Shield of California will be the only carrier offering both a PPO, and HMO plans throughout the state. All other carriers will only offer some form of narrow network plans such as an HMO or Exclusive Provider Organization (EPO).

  • All carriers offering On-Exchange and Off-Exchange plans are indicating double digit rate increases for 2018.

As an example, in Southern California Blue Shield has filed for rate increases of between 18% to 22% for their PPO plans and 9% for their ACO/HMO plans. Other carriers will be releasing information on rate increase during the next few weeks.

In addition to higher rates, most carriers will also narrow their provider networks by only offering HMO or EPO plans with specific provider networks. These plans will not reimburse for any out of network services; therefore, members may be required to change some or all their doctors.

California is still one of the few states where a carrier, Blue Shield of CA, still offers PPO plans. In Arizona, Nevada, and Colorado the only options for individual plans is some form of HMO/EPO.

In addition, California has at least one carrier offering individual coverage in all counties and zip codes in the state. This is not the case in in Arizona and Colorado.

If you are a current Anthem client with an Off-Exchange plan terminating December 31st, please call me (John Barrett) at 626 797-4618, and I will answer your questions.

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SHORT TERM MEDICAL COVERAGE – A BRIDGE UNTIL OPEN ENROLLMENT

Has your individual health insurance policy recently been cancelled?

Are you between jobs, and need coverage for a few weeks or months?

Are you a college student in need of coverage until classes begin?

THE ANSWER TO ALL THESE QUESTIONS IS SHORT TERM MEDICAL COVERAGE.

  • Short term medical is a limited form of health insurance designed to bridge you to permanent individual or employer based group coverage.
  • Short term medical insurance is designed to protect your assets by paying for catastrophic hospital medical costs.
  • The coverage will only pay for your inpatient hospital, ER, or Urgent Care medical services.
  • Some policies may include some form of office visit co-payments before or after the deductible.
  • Drug coverage is usually limited to inpatient hospital; however, some carriers may include a drug discount card.
  • Pre-existing conditions diagnosed during 12 months prior to enrollment are normally excluded. In addition, carriers may also decline enrollment if a major illness has occurred within the last 5 years.
  • The coverage is sold on a month to month basis, up to a maximum of 6 months. Some carriers may allow the policy to roll over for additional days or months.
  • You may tailor the coverage to the actual number of days needed until the effective date of permanent insurance.
  • You may select policy maximums that range from $750,000 to $2,000,000 per person.
  • You may select a deductible from $500 to $7500; co-insurance (the amount you pay after deductible) of 20% or 50% making your total out of pocket costs (your maximum financial risk) $1,500 to $10,000, including deductible.
  • You have a choice of having an effective date the day after enrollment or up to 30 days in the future.
  • You may pay on a monthly basis or the total premium up front for the actual number of days of the policy.
  • The premiums may only be paid by credit card.
  • You may enroll directly online, and after approval the carrier will automatically download your ID card(s) and Certificate of Coverage.

If you have questions, contact me directly at (626) 797-4618 or email me at john@healthinsbrokers.com

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California Voters Are Becoming More Concerned About Healthcare Costs

The cost of getting healthcare remains a major concern, eclipsing worries about having insurance, according to a new USC Dornsife/Los Angeles Times poll. The widespread worry about costs indicates a potential shift in the debate over healthcare.

Lawmakers increasingly have been hearing complaints from their constituents about the cost of care, and polls have found that prescription drug prices, surprise medical bills and other pocketbook issues concern voters more than the future of the health law.

Echoing that national trend, almost two-thirds of voters in the USC/Times survey say they worry “very much” about rising health costs, with only 10% saying that is not something they worry about.

Cost concerns were most widespread among those in their 50s and early 60s. Indeed, that age group consistently showed the highest levels of anxiety on a series of healthcare concerns.

  • For a significant number, the healthcare law itself takes blame for rising costs. Just over half of those surveyed said they believed that costs for average Americans have “gone up a lot” because of the law, compared with roughly one-third who said that the law had not caused that to happen.
  • Most Americans have been forced to confront increased costs for health coverage for years – a trend that began long before the passage of the reform law. Employers have continued to shift costs to their workers, mostly in the form of higher deductibles and co-payments. Although those higher costs may not have been caused by the new law, many blame it.
  • The law clearly has raised costs for one relatively small slice of Americans – mostly healthy, self-employed people with middle-class or higher incomes who were previously able to buy low-cost policies on the private market.
  • The new law requires those people to buy more comprehensive policies, which provide greater coverage, but at a higher price. Covering sicker customers who used to be denied insurance has also led insurers to raise some premiums.

Low- and middle-income Americans get subsidies under the law that lower their monthly premiums, but higher-income Americans do not.

Most California voters have a positive view of their own healthcare and a somewhat positive view of healthcare in the state, the poll found. Seven in 10 rated their own healthcare as “excellent” or “good” while just under three in 10 called their care “fair” or “poor.”

*Modified from an latimes.com article, and other online sources

 

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THE SELF EMPLOYED ALSO NEED BENEFITS

Are you one of the many individuals who has become self-employed either voluntarily or involuntarily due to the changes in today’s economy?

In the past if you voluntarily left your employer or were laid off, you would have been able to move to another company; however, because of economic changes in California, you may now be forced to become self-employed, classified as an independent contractor or “consultant” to survive financially.

In addition to the financial implications, the biggest shock is the realization that by leaving your former employer you have suddenly lost the safety net for you and your family of health insurance and related benefits previously provided by the company.

  • As a health insurance broker, a specific area of my focus is the self-employed who have left companies to work independently. My goal is to provide these individuals and their families with creative strategies to replicate, on an individual basis, the benefits once provided by their previous employers.

Over the next few weeks I will be focusing my newsletter, and my other publications, on the risks faced by the self-employed through the loss of company employee benefits. I intend to recommend specific strategies to reduce or eliminate these financial risks.

A few of the issues, and questions that I will address:

  • The risk of medical expenses caused by illness or accidents.

Health insurance policies are nothing more than financial instruments designed to mitigate medical financial risks.

Do you know how to tailor the four (Bronze, Silver, Gold, Platinum) health insurance plan categories to your specific needs?

  • The risk of large out of pocket financial requirements of health insurance policies.

Currently these amounts range from $4,000 to $6,850 for individuals, and $8,000 to $13,700 for families. In 2017 these amounts will increase to $7,150 and $14,300 respectively.

How will these amounts be paid, and by whom?

  • The risk of a direct loss of income by being unable to work for a period of time (or permanently) as the result of an illness or accident.

Health insurance only pays for the medical expenses; it is not designed to replace lost income.

What types of policies can be used to protect income, and how do insurance companies view the self-employed vs. W2 employees?

  • The risks of requiring skilled nursing, assisted living or other long term care arrangements caused by an illness or accident.

Can insurance policies be structured to pay these benefits, and still provide other benefits?

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