choosing coverage – Maddox Insurance Agency

Lost your job? Here’s how to keep your health insurance or find new coverage now.

August 26, 2021/in Blog, choosing coverage, COBRA, employer sponsored insurance, individual health insurance, premium subsidies, special enrollment period /by wpmaddoxins

Most Americans under the age of 65 get their health insurance from an employer. This makes life fairly simple as long as you have a job that provides solid health benefits: All you need to do is enroll when you’re eligible, and if your employer offers a few options from which to choose, pick the one that best fits your needs each year during your employer’s annual enrollment period.

But the downside to having health insurance linked to employment is that losing your job will also mean losing your health insurance, adding stress to an already stressful situation.

The good news is that you’ve got options — probably several, depending on the circumstances. Let’s take a look at what you need to know about health insurance if you’ve lost your job and are facing the loss of your employer-sponsored health coverage.

Can I enroll in self-purchased insurance as soon as I’ve lost my job?

If you’re losing your job-based health insurance, you do not have to wait for the fall open enrollment period to sign up for a new ACA-compliant plan.

Although the COVID-related special enrollment window for individual/family health plans has already ended in most states, you’ll qualify for your own special enrollment period due to the loss of your employer-sponsored health plan.

This will allow you to enroll in a plan through the marketplace/exchange and take advantage of the subsidies that are available (and bigger than ever, thanks to the American Rescue Plan), without having to wait until 2022 to get coverage.

If you enroll prior to your coverage loss, your new plan will take effect the first of the month after your old plan ends, which means you’ll have seamless coverage if your old plan is ending on the last day of the month.

Your special enrollment period also continues for 60 days after your coverage loss, although you’d have a gap in coverage if you wait and enroll after your old plan ends, since your new plan wouldn’t take effect retroactively.

If you’re in that situation, you might find that a short-term health plan is a good option for bridging the gap until your new plan takes effect. Short-term plans won’t cover pre-existing conditions and are not regulated by the Affordable Care Act (ACA). But they can provide fairly good coverage for unexpected medical needs during a temporary window when you’d otherwise be uninsured.

Be sure to check your options again during open enrollment

If you sign up for coverage now in your special enrollment period, keep in mind that you’ll still need to re-evaluate your coverage during the upcoming open enrollment period, which begins November 1. Even though you’re enrolling fairly late in 2021, your new plan will reset on January 1, with new pricing and possibly some coverage changes. There also might be new plans available in your area for 2022.

So your special enrollment period (tied to your coverage loss) will be your opportunity to find the best plan to fit your needs for the rest of this year. And if you’re still going to need self-purchased coverage in 2022, the upcoming open enrollment period will give you a chance to make sure you optimize your coverage for next year as well.

COBRA (or state continuation) versus self-purchased coverage

Depending on the size of your employer, COBRA might be offered to you. And even if your employer is too small for COBRA, you might have access to state continuation (“mini-COBRA”), depending on where you live. Either of these options will allow you to temporarily continue the coverage you already have, instead of switching to a new individual-market plan right away.

If COBRA or state continuation is available, your employer will notify you and give you information about what you’ll need to do to activate the coverage continuation and how long you can keep it.

Normally, you have to pay the full cost of COBRA or state continuation coverage, including the portion that your employer previously paid on your behalf — which was likely the bulk of the premiums. But until the end of September 2021 (so for just one more month), as part of the American Rescue Plan (ARP), the federal government will pay the full cost of COBRA or state continuation coverage for people who involuntarily lost their jobs.

For much of this year, the soon-to-end COBRA subsidy has changed the calculus that normally goes into the decision of whether to continue an employer-sponsored plan or switch to a self-purchased individual/family plan. But after the end of September, the normal decision-making process will again apply. And you’ll have a special enrollment period when the COBRA subsidy ends, which will allow you to transition to an individual/family plan at that point if you want to.

COBRA coverage vs individual-market health insurance

Here’s what to keep in mind when you’re deciding between COBRA and an individual-market health plan – either initially, or after the COBRA subsidy ends on September 30:

ACA marketplace subsidies are now available at all income levels, depending on the cost of coverage in your area (the American Rescue Plan eliminated the income cap for subsidy eligibility for 2021 and 2022). And the subsidies are substantial, covering the majority of the premium cost for the majority of marketplace enrollees. Unless your employer is continuing to subsidize your COBRA coverage after the federal subsidy expires, you’ll probably find that the monthly premiums are lower if you enroll in a plan through the marketplace, as opposed to continuing your employer-sponsored plan.
Have you already spent a significant amount of money on out-of-pocket costs under your employer-sponsored plan this year? You’ll almost certainly be starting over at $0 if you switch to an individual/family plan, even if it’s offered by the same insurer that provides your employer-sponsored coverage. Depending on the specifics of your situation, the money you’ve already paid for out-of-pocket medical expenses this year could offset the lower premiums you’re likely to see in the marketplace.
Do you have certain doctors or medical facilities you need to continue to use? You’ll want to carefully check the provider networks of the available individual/family plans to see if they’re in-network. And if there are specific medications that you need, you’ll want to be sure they’re on the formularies of the plans you’re considering.
Will you qualify for a premium subsidy if you switch to an individual/family plan? If you do qualify, you’ll need to shop in your exchange/marketplace, as subsidies are not available if you buy your plan directly from an insurance company. (You can call the number at the top of this page to be connected with a broker who can help you enroll in a plan through the exchange.) And again, as a result of the ARP, subsidies are larger and more widely available than usual; that will continue to be the case throughout 2022 as well.

Free health insurance if you collected unemployment in 2021

If you’re approved for even one week of unemployment compensation in 2021, you qualify for a premium subsidy that will fully cover the cost of the two lowest-cost Silver plans in the marketplace/exchange in your area, through the end of the year.

The subsidy will also likely cover the full cost of many of the Bronze plans, and possibly some of the Gold plans, depending on the pricing of plans where you live. This is a special subsidy rule created by the ARP, for 2021 only.

In addition to the subsidy that will allow you to get a free Silver plan, it will also ensure that any of the available Silver plans have full cost-sharing reductions.

What if my income is too low for subsidies?

In order to qualify for premium subsidies for a plan purchased in the marketplace, you must not be eligible for Medicaid, Medicare, or an employer-sponsored plan, and your income has to be at least 100% of the federal poverty level. (As noted above, for 2021 only, you’re eligible for subsidies if you receive unemployment compensation, regardless of your actual total income for the year, as long as you’re not eligible for Medicaid, Medicare, or an employer’s plan.)

In most states, the ACA’s expansion of Medicaid eligibility provides coverage to adults with household income up to 138% of the poverty level, with eligibility determined based on current monthly income. So if your income has suddenly dropped to $0, you’ll likely be eligible for Medicaid and could transition to Medicaid when your job-based coverage ends.

Unfortunately, there are still 11 states where most adults face a coverage gap if their household income is below the federal poverty level. They aren’t eligible for premium subsidies in the marketplace (unless they’ve received unemployment compensation in 2021 and can thus qualify for 2021 subsidies).

This is an unfortunate situation that those 11 states have created for their low-income residents. But there are strategies for avoiding the coverage gap if you’re in one of those states.

And keep in mind that subsidy eligibility in the marketplace is based on your household income for the whole year, even if your current monthly income is below the poverty level. So if you earned enough earlier in the year to be subsidy-eligible for 2021, you can enroll in a plan with subsidies based on that income, despite the fact that you might not earn anything else for the rest of the year.

When open enrollment begins in November, you’ll need to project your 2022 income as accurately as possible, if you’re still needing to purchase your own coverage for 2022. But for the rest of 2021, you can use the income you already earned this year to qualify for subsidies.

What if I’ll soon be eligible for Medicare?

There has been an increase recently in the number of people retiring in their late 50s or early 60s, before they’re eligible for Medicare. The ACA made this a more realistic option starting in 2014, thanks to premium subsidies and the elimination of medical underwriting.

And the ARP has boosted subsidies and made them more widely available for 2021 and 2022, making affordable coverage more accessible for early retirees. That’s especially true for those whose pre-retirement income might have made them ineligible for subsidies in the year they retired, due to the “subsidy cliff” (which has been eliminated by the ARP through the end of 2022).

So if you’re losing your job or choosing to leave it and you still have a few months or a few years before you’ll be 65 and eligible for Medicare, rest assured that you won’t have to go uninsured.

You’ll be able to sign up for a marketplace plan during your special enrollment period triggered by the loss of your employer-sponsored plan. And even if you earned a fairly robust income in the earlier part of the year, you might still qualify for premium subsidies to offset some of the cost of your new plan for the rest of 2021.

You’ll then be able to update your projected income for 2022 during the upcoming open enrollment period; your subsidies will adjust in January to reflect your 2022 income.

And marketplace plans are always purchased on a month-to-month basis, so you’ll be able to cancel your coverage when you eventually transition to Medicare, regardless of when that happens.

Don’t worry, get covered

The short story on all of this? Coverage is available, and obtaining your own health plan isn’t as complicated as it might seem at first glance, even if you’ve had employer-sponsored coverage all your life.

You can sign up outside of open enrollment if you’re losing your job-based insurance, and there’s a good chance you’ll qualify for financial assistance that will make your new plan affordable.

You can learn more about the marketplace in your state and the available plan options by selecting your state on this map. And there are zero-cost enrollment assisters – Navigators and brokers – available throughout the country to help you make sense of it all.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Lost your job? Here’s how to keep your health insurance or find new coverage now. appeared first on healthinsurance.org.

If I can’t buy a short-term plan and I don’t have a qualifying event, what are my coverage options?

January 15, 2021/in choosing coverage, community health center, direct primary care, fixed-indemnity health insurance, short term health insurance /by wpmaddoxins

Q: There are no short-term health plans for sale in my state and I don’t qualify for a special enrollment period for ACA-compliant coverage. Is my only option to go without coverage until next year?

A: Although the Trump administration relaxed the rules for short-term plans in 2018, states can continue to impose their own rules for short-term plans, and the majority of the states have done so.

As of early 2021, there are no short-term plans available for purchase in California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, and Vermont. In each case, it’s because state laws either prohibit this type of coverage altogether, or because the state’s laws are strict enough that short-term insurers have chosen not to offer coverage.

No short-term plans for sale?

So what are your options if you’re not eligible to enroll in an ACA-compliant plan and short-term plans are not for sale in your area? This is a tough situation. In terms of getting real major medical health insurance, you’ll have to wait until open enrollment to sign up, with coverage effective next January (unless you’re Native American, in which case you can enroll at any time).

Of course, if you or your spouse become newly eligible for an employer-sponsored plan between now and then, you could enroll in that plan as soon as you become eligible. If you become eligible for Medicaid or CHIP, you can enroll anytime, and if you’re gaining eligibility for Medicare, you’ll have a seven-month window during which you can enroll.

Otherwise, your options are very limited but not necessarily nonexistent. Depending on where you live, how healthy you are, and various other factors, you may be able to enroll in some type of limited coverage. It won’t be real health insurance, but it might end up being better than nothing.

Healthcare sharing ministry plans

If your lifestyle is compatible with the requirements for healthcare sharing ministries, this might be an option that will provide at least some level of coverage until you can enroll in a health insurance policy.

However, it’s important to understand that healthcare sharing ministries are not health insurance. The “coverage” they provide isn’t backed by any sort of guarantee, and consumers have fairly limited recourse if they run into problems with the sharing ministry plan.

Although no sharing ministry plan is actually providing real insurance coverage, some sharing ministry plans are less reputable than others and it’s important to do your homework if you’re considering a sharing ministry plan as a last recourse.

Fixed-indemnity plans

Fixed-indemnity plans are exempt from ACA regulations, and they’re often conflated with short-term health plans. But they are a very different type of coverage.

Short-term plans tend to be somewhat similar to the sort of coverage that was available in the individual major medical market prior to 2014 (before the ACA reformed that market and added numerous consumer protections). Fixed-indemnity plans, however, tend to provide much less coverage.

Instead of a deductible, coinsurance, and capped out-of-pocket costs, a fixed-indemnity plan operates from the perspective of limiting how much the insurance company has to pay, rather than limiting how much you have to pay. (To be clear, short-term health plans don’t entirely limit how much you have to pay either, since they have annual and lifetime benefit limits.)

So fixed indemnity plans will have a schedule of benefits that the policy will pay for certain services. For example, they might pay $1,000 for each night you spend in the hospital, and $1,500 for a surgery and $50 for an office visit. The amounts vary from one plan to another, but the point is that the benefit amounts are laid out in the policy itself, regardless of how much the services actually cost.

So if your fixed indemnity plan will pay $1,500 for a night in the hospital and you end up getting a bill for $15,000 after spending one night in the hospital, you’re going to be on the hook for the other $13,500. (Depending on the plan, you may receive fixed reimbursement amounts for other services performed while you were in the hospital.)

A fixed-indemnity plan should not be considered a substitute for health insurance and it’s absolutely not something that you should rely on long-term. But if you find yourself in a position where there is literally nothing else you can buy, it could end up saving you some money if you need medical care, so it’s arguably better than nothing. And there are fixed-indemnity plans for sale in many of the states where there are no short-term plans available.

Direct primary care

Depending on where you live, you may be able to find a primary care doctor who offers services through a direct primary care plan. These plans will help to keep your costs for primary care steady and predictable, but they won’t cover you if you need medical treatment beyond what can be provided in a primary care setting.

So while they are not a substitute for health insurance, you might gain some peace of mind by enrolling in a direct primary care plan while you wait to enroll in a real health insurance policy.

Community health centers

If you have no realistic option for health insurance coverage, you may still be able to access health care, for free or on a sliding scale basis, at a community health center or charitable clinic. Health centers provide primary care, but clinics in some locations can also provide additional services, including dental care, prescription drugs, and mental health care.

The post If I can’t buy a short-term plan and I don’t have a qualifying event, what are my coverage options? appeared first on healthinsurance.org.

Healthcare sharing ministries: A leap of faith?

December 18, 2018/in choosing coverage, health care sharing ministry /by wpmaddoxins

Sharing ministry plans have seen rapid growth in membership.
Membership dues are much lower than the cost of an unsubsidized ACA-compliant plan.
But they’re not health insurance.
Plans are not subject to state and federal health insurance regulations.
Medical underwriting is permitted.
Plans have limits on the benefits they’ll provide.
Patients can see any provider, but there’s no guarantee they’ll find a provider willing to accept their sharing ministry coverage.

As health insurance premiums rise, so does the popularity of cheaper alternatives to covering medical expenses. That’s one reason why healthcare sharing ministries – which can average less than half the cost of traditional health insurance plans – have seen a major membership surge in the past few years.

Healthcare sharing ministries are faith-based non-profit organizations that pool members’ money to share medical expenses. As long as the ministry has been in existence since December 31, 1999, participation exempts members from the Affordable Care Act’s individual mandate to have health insurance (that’s no longer an issue after the end of 2018, as the federal individual mandate penalty won’t apply in 2019 or future years).

These organizations generally require members to make a promise to adhere to certain biblical values and to participate regularly in worship or prayers. As a result, some health conditions don’t comport, leaving members to pay out-of-pocket for illnesses stemming from the use of tobacco, alcohol, and drug addiction, for example. They typically don’t pay for mental health services, out-of-wedlock pregnancies, contraceptives or abortion either.

Since the Affordable Care Act became law, membership for healthcare sharing ministries has grown at a rapid rate. The Commonwealth Fund reports that there were an estimated one million people enrolled in health care sharing ministry plans as of 2018, up from about 200,000 as of 2010 (the year the ACA was implemented). More than 100 health care sharing ministries are in operation in the US, although nearly all of them are affiliated with small Mennonite churches; most health care sharing ministry members are enrolled in coverage offered by Samaritan Ministries, Medi-Share, Christian Healthcare Ministries, and Liberty Healthshare.

Desire for cheaper plans fuels interest

Why the rapid growth? Health care sharing ministry plans are far less expensive than ACA-compliant coverage for people who aren’t eligible for premium subsidies in the exchange. As long as they’re healthy, can agree to a sharing ministry’s lifestyle requirements, and aren’t concerned with the coverage gaps and reduced regulatory oversight, they can pay a lot less each month for their coverage by using a sharing ministry plan.

For example, a single person between the age of 30 and 64 who signs up with Liberty HealthShare ministry will pay $299/month. A couple will pay $399/month, and a family will pay $529/month. The plan will share up to $1,000,000 per incident, and there’s an “unshared amount” (similar to a deductible) that ranges from $1,000 to $2,250.

A single 50-year-old enrolling in Medi-Share (Christian Care Ministry) will pay between $176/month and $484/month, depending on their health and the unshared amount that they select. For a family of four with 50-year-old parents, the Medi-Share monthly cost will range from $301 to $959.

Compare that to average monthly premiums through the ACA marketplaces of $668 for a 50-year old individual purchasing a silver on-exchange plan for 2019 without any premium subsidies. A family of four (50-year-old parents and two teenage kids) will pay an average of nearly $2,000/month for a silver plan in the exchange if they aren’t eligible for premium subsidies in 2019. And silver plans can have out-of-pocket exposure as high as $7,900 for an individual and $15,800 for a family

It’s worth noting here that most middle-class families do qualify for premium subsidies in the exchange; subsidies are available for a household of four people with an income of more than $100,000 in 2019. And “income” refers to the ACA-specific calculation for modified adjusted gross income (MAGI): Contributions to retirement plans and a health savings acount will result in a lower MAGI and potentially larger premium subsidies.

But if there’s no way you’re eligible for subsidies, the monthly costs might make a sharing ministry plan look like a good option. But before ditching your ACA-compliant health insurance policy, here are five things to know about healthcare sharing ministries.

1. They’re not health insurance

Although designed to help consumers cover the cost of medical expenses, healthcare sharing ministries differ in significant ways from health insurance policies that comply with the Affordable Care Act.

“It’s voluntary and cooperative and motivated by compassion and the urge to assist another person in need. That’s really what drives it versus an insurance arrangement where there is a contract of indemnity. That’s the essential difference,” says Dale Bellis, Liberty Health Share’s executive director.

Each healthcare sharing ministry operates a bit differently, but generally the money collected from members each month is placed into an account. The ministry then facilitates the direct sharing of medical costs among members.

“Each month members can see the names of other members who have benefited from their monthly share amount,” says Michael Gardner, director of marketing and communications for Christian Care Ministry, a healthcare sharing ministry in Melbourne, Florida.

2. State and federal regulations don’t apply

Consumers who face problems with a healthcare sharing ministry, such as when a claim is paid or a service is not covered, aren’t protected by their state’s insurance department.

As of 2018, there are 30 states with laws that exempt health care sharing ministries from laws that apply to health insurance. So members of healthcare sharing ministries in those states don’t get the benefit of regulatory oversight from the insurance department. That’s because healthcare sharing ministries are not health insurance companies and do not technically offer health insurance

So there are no guarantees that certain services or treatments, such as preventive visits and contraceptives, mental healthcare and treatment associated with drug or alcohol use or abuse, are covered. And in many cases, some of those services are specifically excluded. The ACA’s consumer protections don’t apply to health care sharing ministries, so essential health benefits don’t have to be covered.

Most health care sharing ministries do have formal appeals processes in place, but they aren’t enforced by federal or state law.

LibertyShare, for example, alerts members on its website about their rights when grievances over uncovered medical costs occur, and when attempts at resolving the dispute don’t work in the member’s favor.

This program is not an insurance company nor is it offered through an insurance company. This program does not guarantee or promise that your medical bills will be paid or assigned to others for payment. Whether anyone chooses to pay your medical bills will be totally voluntary. As such, this program should never be considered as a substitute for an insurance policy. Whether you receive any payments for medical expenses and whether or not this program continues to operate, you are always liable for any unpaid bills.

“It’s buyer beware. If you have health costs not covered there is very little recourse for you. You can’t go to a government agency to complain,” explains Sabrina Corlett, with the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute. And as the fine print clearly notes, the sharing ministry plan should not be considered a substitute for health insurance.

3. Underwriting is permitted

One common practice the ACA outlawed was the ability of health insurers to turn away people with pre-existing health conditions, or to charge them more for coverage.

Not so with healthcare sharing ministries.

Medical underwriting is allowed and pre-existing health conditions can be excluded from coverage.

4. There are limits to coverage

Unlike health insurance, there are generally limits to the amount of medical expenses healthcare sharing ministries will cover – in some cases, a maximum payout of $125,000 per incident and $1,000,000 per diagnosis.

Although healthcare sharing ministries report that most members’ “sharable expenses” are covered, they are clear to say there is no guarantee.

“Neither Medi-Share nor any of its members assume any obligation to pay another member’s medical bills,” Gardner says. Medi-Share’s policy is common among other ministries.

5. No limits on access to doctors, hospitals, but also no guarantee they’ll accept sharing ministry coverage

Christian Care Ministry is one of a few organizations with a provider network it suggests members tap for care. According to Gardner, staff is better able to negotiate a discounted rate when members see one of the more than 700,000 providers participating with the organization nationwide. However, members are allowed to see any provider they wish.

In most cases, ministries will negotiate prices on members’ behalf. And, it’s a good deal for both the patient and providers, they say. According to Bellis, 97 percent of all doctors and hospitals take the reimbursement they negotiate.

But there’s another side to this as well: Doctors and hospitals can treat sharing ministry members as cash-paying patients, which means they might not accept them at all, if the patient is expected to rack up a significant bill. To be clear, doctors and hospital like cash-paying patients if the patient pays up front or the bill is relatively small and there’s an expectation that the patient will be able to pay it without much trouble. But when a bill is expected to be substantial and isn’t paid up front, a patient without a solid insurance policy backing them might experience difficulties in getting the hospital to provide treatment.

Look before a leap of faith

Corlette of Georgetown University’s Health Policy Institute says anyone considering a healthcare sharing ministry in place of an ACA-compliant health insurance plan just needs to enter with their eyes wide open.

“What I would say about health sharing ministries is they are a leap of faith, both literally and figuratively.”

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