I hear this quite a bit from the public but find it a bit disconcerting when I hear it from agents and brokers who are supposed to be better versed in these thing.
The myth is that the penalty for not complying with the Obamacare rule of having creditable qualified health coverage will be $95 in 2014. Well, if a person has an adjusted income of $9500 annually then yes, the penalty is $95 in 2014. Of course, that person would qualify for no-cost Medi-Cal (CA Medicaid) and would be able to obtain qualified health coverage and avoid the penalty.
The actual penalty for 2014 is $95 OR 1% of income, whichever is greater. By 2016 this goes up to 2.5% of income. Below I have broken out the actual numbers for the penalty for California residents should they choose to avoid buying a qualified health plan under Obamacare.
Income 2014 2015 2016
1% 2% 2.5%
$20,000 $200 $400 $500
$30,000 $300 $600 $750
$40,000 $400 $800 $1,000
$50,000 $500 $1,000 $1,250
$75,000 $750 $1,500 $1,875
$100,000 $1,000 $2,000 $2,500
As you can see, depending on income level, not having qualified health coverage under Obamacare can be a bit costly in terms of penalty. When you hear someone say "it's just $95", you can smile because you know the truth.
Dave
www.davefluker.com
www.gilroyhealthinsurance.com
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Sunday, May 19, 2013
Wednesday, May 1, 2013
Healthcare Reform Application Video
The video below outlines the application and health insurance purchasing process per HHS and CMS. As mentioned in my earlier blog post today, the process looks to be two separate steps to complete plan enrollment.
Covered California will be the California state exchange and there may be some variations on this that are state-specific, we will have to wait and see. I suspect though that the process will be generally uniform across the country whether it's a state or federal exchange.
As always, if you don't see a video below, you are viewing copied and unauthorized content stolen from my blog. My blog is http://davefluker.blogspot.com
www.davefluker.com
For more information on California Healthcare Reform, visit the California Healthcare Reform section of my web site at
http://www.davefluker.com/healthcare_reform.html
Covered California will be the California state exchange and there may be some variations on this that are state-specific, we will have to wait and see. I suspect though that the process will be generally uniform across the country whether it's a state or federal exchange.
As always, if you don't see a video below, you are viewing copied and unauthorized content stolen from my blog. My blog is http://davefluker.blogspot.com
Reform Application Process Video
Davewww.davefluker.com
For more information on California Healthcare Reform, visit the California Healthcare Reform section of my web site at
http://www.davefluker.com/healthcare_reform.html
Exchange Application Process As It Looks
CMS has released a new Obamacare application form which has been shortened down considerably. About 3 pages for individuals and 7 pages or so for families. This simplified will make the enrollment task much easier for most people. There is also a third application form for those who wish to purchase inside of their state's exchange (be it state, partnered or federal - California will be state) who do not receive a subsidy.
Looking at the applications it is becoming clearer that the process to enroll, be it online or via paper application, will be a two step process that will likely have to be completed in two separate sittings.
The "Application" form is a form used to secure the right to shop in the exchange (now referred to as "marketplace") for coverage and pick a plan.
Link to individual application
Once the application is approved, then you will be given some kind of permission to actually go into the marketplace and make your purchase. Paper application states 1-2 weeks after submission to get permission. I expect online will be faster, however we don't yet know what the lag time will be between submission online and approval to shop.
For those purchasing their coverage outside of the exchange in the open market (private exchange), this application process will most likely not apply.
Remember, the initial 'right to shop' application is for qualification, not plan selection, and the information is vetted between Social Security, IRS and Department of Homeland Security.
For more information on California specific healthcare reform, visit the California Healthcare reform section on my web site at
http://www.davefluker.com/healthcare_reform.html
Dave
www.davefluker.com
Looking at the applications it is becoming clearer that the process to enroll, be it online or via paper application, will be a two step process that will likely have to be completed in two separate sittings.
The "Application" form is a form used to secure the right to shop in the exchange (now referred to as "marketplace") for coverage and pick a plan.
Link to individual application
Once the application is approved, then you will be given some kind of permission to actually go into the marketplace and make your purchase. Paper application states 1-2 weeks after submission to get permission. I expect online will be faster, however we don't yet know what the lag time will be between submission online and approval to shop.
For those purchasing their coverage outside of the exchange in the open market (private exchange), this application process will most likely not apply.
Remember, the initial 'right to shop' application is for qualification, not plan selection, and the information is vetted between Social Security, IRS and Department of Homeland Security.
For more information on California specific healthcare reform, visit the California Healthcare reform section on my web site at
http://www.davefluker.com/healthcare_reform.html
Dave
www.davefluker.com
Friday, March 22, 2013
WSJ - Insurer Health Premium Warnings Continue
Today's Wall Street Journal has another article concerning warnings by health insurers about potentially high premiums in January when Obamacare kicks in.
http://online.wsj.com/article/SB10001424127887324557804578374761054496682.html?mod=pls_whats_news_us_business_f
Those at lower income levels will receive subsidy for both premiums and a subsidy reduction in deductibles, co-pays and out of pocket maximums. Those at higher income levels will receive no assistance towards premiums.
Dave
www.davefluker.com
http://online.wsj.com/article/SB10001424127887324557804578374761054496682.html?mod=pls_whats_news_us_business_f
Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation's biggest firm projecting that rates could more than double for some consumers buying their own plans.
In a private presentation to brokers late last month, UnitedHealth Group Inc., the nation's largest carrier, said premiums for some consumers buying their own plans could go up as much as 116%, and small-business rates as much as 25% to 50%.
Aetna Inc., in a presentation last fall to its national broker advisory council, suggested rates on individual plans not being grandfathered under the law could go up 55%, on average, and gave a figure of 29% for small business rates.
Those at lower income levels will receive subsidy for both premiums and a subsidy reduction in deductibles, co-pays and out of pocket maximums. Those at higher income levels will receive no assistance towards premiums.
Dave
www.davefluker.com
Friday, March 1, 2013
Narrow Provider Networks For Exchange Health Plans?
An article in today's Wall Street Journal reinforces something we brokers have known for quite some time--health exchange plans will have limited provider networks for access to healthcare.
These networks, known as limited or narrow networks (a newer term is ACO - accountable care org) will have a much smaller number of participating providers and will be working with lower negotiated rate schedules than traditional networks such as Blue Cross' Prudent Buyer Network.
For those who purchase health coverage inside of the exchange, the availability of healthcare providers will be markedly less than plans sold on the open market. This may mean that Blue Cross or Blue Shield PPO health plans may not offer BlueCard national PPO access on plans sold through the exchange leaving that benefit to normal network plans sold outside of the exchange.
Once the California health plans are developed and released for the exchange and non-exchange markets, we will have a clearer idea about the networks available in both markets.
Dave
Wednesday, February 27, 2013
ObamaCare 'Glitch" Affects Dependents and Employers
According to recent information, a situation with regard to employer coverage under the ACA (ObamaCare) may create severe hardship for dependents of employees participating in group health coverage plans through their jobs.
The way the bill was written (apparently the government can't fix it, either), a family offered health coverage through an employer plan who might otherwise be subsidy-eligible in the individual exchange would be prohibited from receiving that subsidy to buy there because the employer's plan meets the definition of 'affordable coverage'. Here's where it gets sticky..............
Defined as affordable coverage in this situation means that the health premium for the employer plan does not exceed 9.5% of the family's income. But that's not all...................
The 9.5% is keyed to the self-only coverage premium available to the worker, not his or her family.
Generally employers will subsidize a portion of the employees health premium (in CA at least 50%) but often don't offer any cost-share for the spouse and dependents. Also, dependent costs tend to be much higher than employee costs for health plans, sometimes three times as much. The numbers in an article published by the Huffington Post quoting Kaiser Family Foundation suggest that a typical workplace health plan costs about $5,600 for an individual worker while family coverage in nearly three times higher at $15,700. But............
The $15,700 won't enter the calculation for determining the affordability of the employer plan relative to the individual subsidy exchange (assuming the family would qualify for a subsidy), it will be based solely on the $5,600 self-pay premium for the employee.
This is another reason why I believe, when all of the information gets out there, employers may begin to drop health coverage, send their employees to the individual exchange for their subsidy and maybe assist with premium or give them a pay raise.
Dave
www.davefluker.com
The way the bill was written (apparently the government can't fix it, either), a family offered health coverage through an employer plan who might otherwise be subsidy-eligible in the individual exchange would be prohibited from receiving that subsidy to buy there because the employer's plan meets the definition of 'affordable coverage'. Here's where it gets sticky..............
Defined as affordable coverage in this situation means that the health premium for the employer plan does not exceed 9.5% of the family's income. But that's not all...................
The 9.5% is keyed to the self-only coverage premium available to the worker, not his or her family.
Generally employers will subsidize a portion of the employees health premium (in CA at least 50%) but often don't offer any cost-share for the spouse and dependents. Also, dependent costs tend to be much higher than employee costs for health plans, sometimes three times as much. The numbers in an article published by the Huffington Post quoting Kaiser Family Foundation suggest that a typical workplace health plan costs about $5,600 for an individual worker while family coverage in nearly three times higher at $15,700. But............
The $15,700 won't enter the calculation for determining the affordability of the employer plan relative to the individual subsidy exchange (assuming the family would qualify for a subsidy), it will be based solely on the $5,600 self-pay premium for the employee.
This is another reason why I believe, when all of the information gets out there, employers may begin to drop health coverage, send their employees to the individual exchange for their subsidy and maybe assist with premium or give them a pay raise.
Dave
www.davefluker.com
Sunday, February 24, 2013
California PCIP To Suspend New Enrollments March 2, 2013
Following on the HHS directive closing new enrollments in federal PCIP 2/16, the California PCIP has announced that it will suspend further enrollments in the CA PCIP effective march 2, 2013.
http://www.pcip.ca.gov/PCIP_Program/PCIP_Not_Accepting_New_Enrollments_After_March_2nd_2013.aspx
This new enrollment suspension comes 9 months earlier than anticipated when the program was set up in 2010. It was schedule to enroll through December, 2013.
CA PCIP enrolled the most of any state. PCIP in total enrolled 135,000 nationally of which approximately 100,000 remain enrolled. Cost for PCIP was $5 Billion. Average cost per enrollee in the PCIP ran around $37,000 in benefits on a very small premium.
CA PCIP applicants after March 2 will be denied enrollment in PCIP and vetted for eligibility for the MRMIP (CA Major Risk Program).
Dave
www.davefluker.com
http://www.pcip.ca.gov/PCIP_Program/PCIP_Not_Accepting_New_Enrollments_After_March_2nd_2013.aspx
This new enrollment suspension comes 9 months earlier than anticipated when the program was set up in 2010. It was schedule to enroll through December, 2013.
CA PCIP enrolled the most of any state. PCIP in total enrolled 135,000 nationally of which approximately 100,000 remain enrolled. Cost for PCIP was $5 Billion. Average cost per enrollee in the PCIP ran around $37,000 in benefits on a very small premium.
CA PCIP applicants after March 2 will be denied enrollment in PCIP and vetted for eligibility for the MRMIP (CA Major Risk Program).
Dave
www.davefluker.com
Saturday, February 16, 2013
PCIP Shutting Down New Enrollments Early
The PCIP (Pre-Existing Condition Insurance Program) will be closing new enrollments.
As directed by HHS yesterday, the federal PCIP will cease accepting new enrollments today (Saturday) for enrollment in the PCIP. States have been directed to curtail enrollments as well for those states (like California) which run a state-based PCIP. Many states are scheduled to cease new enrollments on march 2, 2013.
Update: California PCIP will close for new enrollments on Saturday, March 2, 2013. See my blog post regarding California PCIP closing.
http://davefluker.blogspot.com/2013/02/ca-pcip-to-suspend-new-enrollments.html
The PCIP program was established in 2010 under ObamaCare to provide a temporary high risk pool for approximately 400,000 individuals nationally over the 4-year scheduled run. It never enrolled more than 135,000 with approximately 100,000 still on the rolls.
Even with that low mark, PCIP has run out of money and only has enough money left in the system to provide care for existing subscribers. The US Government seeded the PCIP with $5 Billion to fund the 4-year operation. What's left of that money is only enough to possibly cover those already enrolled.
PCIP was intended to run through December 31, 2013 and then shutter in favor of ObamaCare.
Dave
www.davefluker.com
As directed by HHS yesterday, the federal PCIP will cease accepting new enrollments today (Saturday) for enrollment in the PCIP. States have been directed to curtail enrollments as well for those states (like California) which run a state-based PCIP. Many states are scheduled to cease new enrollments on march 2, 2013.
Update: California PCIP will close for new enrollments on Saturday, March 2, 2013. See my blog post regarding California PCIP closing.
http://davefluker.blogspot.com/2013/02/ca-pcip-to-suspend-new-enrollments.html
The PCIP program was established in 2010 under ObamaCare to provide a temporary high risk pool for approximately 400,000 individuals nationally over the 4-year scheduled run. It never enrolled more than 135,000 with approximately 100,000 still on the rolls.
Even with that low mark, PCIP has run out of money and only has enough money left in the system to provide care for existing subscribers. The US Government seeded the PCIP with $5 Billion to fund the 4-year operation. What's left of that money is only enough to possibly cover those already enrolled.
PCIP was intended to run through December 31, 2013 and then shutter in favor of ObamaCare.
Dave
www.davefluker.com
Thursday, February 14, 2013
Final California Health Benefits Exchange Plans Released
The California Health Benefits Exchange (Covered California) has released the final standard health benefit designs for 2014.
Designs include two Platinum plans, two Gold plans, 5 standard Silver plans (3 Individual and 2 SHOP small group exchange), six Silver low-income plans, two Bronze plans and one Catastrophic plan.
HSA -compatible plans are available in the Silver and Bronze tier, one plan each tier.
Now we wait for the insurance carriers to design their versions of these standard designs for placement in the California Health Benefits Exchange. All insurance carriers may not participate in in the exchange nor will they necessarily provide exchange health plans at each metal tier.
Also a reminder that insurance carriers will be selling metal tier plans outside of the CA exchange and those plans will not be quoting on the exchange web site.
Final Standard CA HBEX plans
Dave
www.davefluker.com
Designs include two Platinum plans, two Gold plans, 5 standard Silver plans (3 Individual and 2 SHOP small group exchange), six Silver low-income plans, two Bronze plans and one Catastrophic plan.
HSA -compatible plans are available in the Silver and Bronze tier, one plan each tier.
Now we wait for the insurance carriers to design their versions of these standard designs for placement in the California Health Benefits Exchange. All insurance carriers may not participate in in the exchange nor will they necessarily provide exchange health plans at each metal tier.
Also a reminder that insurance carriers will be selling metal tier plans outside of the CA exchange and those plans will not be quoting on the exchange web site.
Final Standard CA HBEX plans
Dave
www.davefluker.com
Wednesday, February 13, 2013
HR 544 And Health Premium Rates (Update) Liberty Act
In my previous blog regarding the "Liberty Act" HR 544 seeks to increase the mandated ratio of premium pricing from 3:1 to 5:1 to help reduce monthly health insurance premium costs to younger people. Currently the PPACA requires that the maximum rate differential between the oldest subscriber and youngest cannot be more than 3 times the youngest subscriber's rate.
http://davefluker.blogspot.com/2013/02/hr-544-addresses-health-premium-ratio.html
To understand what is at issue for younger California residents (and other states as well), we need to first look at rate differential under the current underwriting (can be denied if too risky) system which enrolls only generally healthy individuals.
For my area zip code 95020:
Clear Protection Plus 3300 PPO (most popular plan in CA) at standard monthly rate:
Age 19 - $86.00
Age 63 - $347.06
Age 19 Adjusted to PPACA Ratio - $115.67 (immediate 35% Rate Increase)
1/3 of the age 63 rate would be $115.67. Under the current system (not a guaranteed-issue take all comers system), the 19-year-old would experience an immediate 35% rate increase on 1/1/2014 to meet the mandatory 3:1 ratio. The carrier is certainly not going to lower the age 63 rate.
SmartSense Plus 6000 PPO with Standard Rx at standard monthly rate:
Age 19 - $109.00
Age 63 - $436.00
Age 19 Adjusted to PPACA - $145.33 (immediate 33% Rate Increase)
1/3 of the age 63 rate would be $145.33. Under the current system (not a guaranteed-issue take all comers system), the 19-year-old would experience an immediate 33% rate increase on 1/1/2014 to meet the mandatory 3:1 ratio.
As you can see by the examples above, the immediate impact IF the current underwriting system were kept in place and high risks could be denied would result in an IMMEDIATE rate increase for a healthy 19-year-old of approximately 34% across the board.
Further assuming that rates will be adjusted upward of these current lower-risk underwritten rates to accommodate community rated guaranteed-issue coverage and cover all required essential health benefits and precious metal tier requirements, the rate for the 19-year-old could be stratospheric. It will certainly be more than the current 34% average increase as the medical underwriting system will disappear and anyone, regardless of health can buy coverage at the same premium rate as someone at the same age in their rating area (community rating).
HR 544 would increase the ratio from 3:1 to 5:1 which would then allow some relief for those at younger ages with the ability of the insurer to price at 1/5 the price of the 63-year-old and not 1/3 the price.
Young people need to be concerned about this. I have heard rumors that one organization, an association for retired people, is fighting against this bill. Young people need to be concerned or their health insurance rates (you have to buy it by law staring next January or face a penalty or tax or whatever they are calling it).
Dave
www.davefluker.com
http://davefluker.blogspot.com/2013/02/hr-544-addresses-health-premium-ratio.html
To understand what is at issue for younger California residents (and other states as well), we need to first look at rate differential under the current underwriting (can be denied if too risky) system which enrolls only generally healthy individuals.
For my area zip code 95020:
Clear Protection Plus 3300 PPO (most popular plan in CA) at standard monthly rate:
Age 19 - $86.00
Age 63 - $347.06
Age 19 Adjusted to PPACA Ratio - $115.67 (immediate 35% Rate Increase)
1/3 of the age 63 rate would be $115.67. Under the current system (not a guaranteed-issue take all comers system), the 19-year-old would experience an immediate 35% rate increase on 1/1/2014 to meet the mandatory 3:1 ratio. The carrier is certainly not going to lower the age 63 rate.
SmartSense Plus 6000 PPO with Standard Rx at standard monthly rate:
Age 19 - $109.00
Age 63 - $436.00
Age 19 Adjusted to PPACA - $145.33 (immediate 33% Rate Increase)
1/3 of the age 63 rate would be $145.33. Under the current system (not a guaranteed-issue take all comers system), the 19-year-old would experience an immediate 33% rate increase on 1/1/2014 to meet the mandatory 3:1 ratio.
As you can see by the examples above, the immediate impact IF the current underwriting system were kept in place and high risks could be denied would result in an IMMEDIATE rate increase for a healthy 19-year-old of approximately 34% across the board.
Further assuming that rates will be adjusted upward of these current lower-risk underwritten rates to accommodate community rated guaranteed-issue coverage and cover all required essential health benefits and precious metal tier requirements, the rate for the 19-year-old could be stratospheric. It will certainly be more than the current 34% average increase as the medical underwriting system will disappear and anyone, regardless of health can buy coverage at the same premium rate as someone at the same age in their rating area (community rating).
HR 544 would increase the ratio from 3:1 to 5:1 which would then allow some relief for those at younger ages with the ability of the insurer to price at 1/5 the price of the 63-year-old and not 1/3 the price.
Young people need to be concerned about this. I have heard rumors that one organization, an association for retired people, is fighting against this bill. Young people need to be concerned or their health insurance rates (you have to buy it by law staring next January or face a penalty or tax or whatever they are calling it).
Dave
www.davefluker.com
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