Insurance marketplaces in states like California and Washington have been making headlines recently as they continue to outperform the federal marketplace in coverage provided by portals such as healthcare.gov. These performances have shown that states are effectively reaching and exceeding federal standards more successfully than federal programs.
California and Washington specifically have provided policies for approximately 50 percent of the amount of people who have been covered by the federal marketplace which services most of the nation. These signups apply for the Special Enrollment Period (SEP) which began when the Open Enrollment Period (OEP) closed in February 2015.
Under the Affordable Care Act, also known as the ACA or “Obamacare,” all citizens must have access to public healthcare options and must be insured by a certain deadline or face a fine. People looking to purchase insurance that meets government standards for federal programs and benefits must purchase insurance through a designated marketplace.
One such marketplace is the healthcare.gov website, which has been criticized as being difficult to navigate and unintelligible. By introducing their own marketplaces and raising awareness through advertising, the states of California and Washington signed up record amounts of people during their Special Enrollment Periods.
In order to ensure that all people are adequately covered, those seeking to purchase insurance from a marketplace must do so within a certain timeframe. This timeframe usually runs from the end of the year to the first few months of the new year and counts for that new year. There are two distinct types of enrollment periods. They are known as an Open Enrollment Period (OEP) and a Special Enrollment Period (SEP).
Open Enrollment Period
The OEP is a window in which people looking to purchase insurance from federally-approved marketplaces may purchase their coverage without incurring a fee. The OEP typically lasts from November to February, which is when it ended in 2015. However, since the laws have only recently taken effect and this is a new system, there is a grace period after the OEP has closed in which people are allowed to purchase coverage from a marketplace.
Special Enrollment Period
The SEP is a window in which people looking to purchase insurance from federally-approved marketplaces may purchase their coverage if they have missed the OEP. In some cases, a fee may still apply. Recently, the fee has been waived or is based upon an honor system. It is likely that SEPs will be less forgiving in the future but these new proceedings are still in their infancy. The SEP for 2015 ends in April. In cases that involve a change in life circumstances such as marriage or pregnancy, SEPs are typically offered with no fee.
Medicare can be an increasingly difficult subject to grasp. There are several legal and political forces that make Medicare a topic of controversy and confusion. In order to ensure that you are aware of how Medicare will affect you and your family, it is important to remember these considerations
1. Medicare Is Divided into Four Parts
Medicare coverage is divided into four parts labeled alphabetically as Medicare Part A, B, C, and D. Part A is considered hospital insurance because it covers visits to hospitals, typically for individuals who are over 65 and also eligible for Social Security benefits. Part B is considered medical insurance and anyone who qualifies for Part A is also eligible for Part B.
Coverage includes both necessary and preventative services. Part C is commonly known as Medicare Advantage and allows for supplemental insurance policies purchased through Medicare-approved private insurers. Medicare Part D includes prescription drug coverage. Anyone covered by Parts A, B, or C is eligible for Part D coverage
2. Medicare Does Not Cover All Expenses
Medicare is a supplemental policy to insure people of retirement age. However, it does not cover all services or procedures. Many procedures may need to be paid for out of pocket and even then, may not be fully reimbursed. Supplemental insurance plans such as Medicare Part C can help offset some of the costs. It is important to speak with your insurance agent regarding what is covered and how much you will owe for services and procedures
3. Open Enrollment Periods
Medicare can only be claimed during certain enrollment periods each year. Many people who are approaching 65 are encouraged to apply before they turn 65 in order to maximize their coverage. While everyone of retirement age is automatically enrolled in Medicare Part A, eligible persons seeking other coverage may only enroll during one time window each year. The Open Enrollment Period for Medicare Part B is 7 months after eligibility for Part A.
4. Special Enrollment Periods
Special Enrollment Periods also exist depending on the circumstances surrounding missing the Open Enrollment Period. Failure to enroll during the initial enrollment period may result in higher premiums.
Special enrollment eligibility criteria may include:
- Working for the government and being injured before retirement age
- Permanent kidney failure
- Had Medicare but dropped coverage
- Working for the railroad industry
- Disabled widows/widowers already receiving some sort of benefits
5. Coverage Does Not Begin Immediately
While Medicare Part A enrollment begins automatically, enrollment terms for Part B can be slightly confusing. If you enroll in Part B, coverage will begin depending upon the date that you enrolled. For example, if you enroll before you turn 65, your coverage will begin the month you turn 65.
If you enroll during the month you turn 65, coverage begins the month after you turn 65. If you wait until a month after you turn 65, the coverage will begin the next month. If you enroll 2-3 months after you turn 65, coverage will begin 2-3 months after you enroll.
In 2003, the United States Government instituted a program known as a Health Savings Account (HSA) as part of Medicare Prescription Drug, Improvement, and Modernization Act. HSAs allow citizens with a high-deductible insurance policy to pay into an account earmarked for medical expenses. The main selling point of these accounts is that they can be contributed to, up to a certain annual limit, without taxes. Withdrawals can be made tax-free as well, providing that the funds are used to cover medical expenses. In any other circumstances, there are typically penalties involved for withdrawals.
Eligibility for a Health Savings Account
In order to qualify for a HSA, an applicant must be currently enrolled in an HAS-eligible, high-deductible health plan (HDHP). This means that your plan must be based upon a high out-of-pocket deductible. Typically, high-deductible plans are purchased by those who rarely get sick or can easily afford high up-front payments. HSAs are not open to those listed as dependents on another person’s tax return. Additionally, persons covered by other non-HSA eligible plans or persons eligible for Medicare benefits are not eligible for a HSA.
Benefits of a Health Savings Account
Many HDHP policy holders view HSAs as a great way to save money, tax-free, for potential life emergencies. From a broader perspective, supporters of HSAs believe that HSAs incentivize a more prudent attitude towards the consumption of medical services.
The most commonly cited benefits of HSAs include:
- Provide an easy way to save for medical expenses
- Keep more money in the pocket of the consumer in the form of taxes
- Reduce the demand for non-critical medical procedures
- Potentially save money in the event of a serious accident
- Funds in an HSA may be invested into CDs, stocks, mutual funds, etc.
- Provide incentive to spend less money
Drawbacks of a Health Savings Account
While there are several benefits for HSAs, they are not necessarily for everyone. Many critics often point out that, due to the high-deductible plan requirement, HSAs only benefit the young and healthy while driving up prices of healthcare. Critics also say that poor, uninsured persons will not benefit from these incentives.
Other common criticisms of HSAs may include:
- Most HSAs are held by upper-middle class people and do not benefit the poor
- HDHPs can weaken or degrade the quality of health by disincentivizing routine healthcare
- There are tax penalties for withdrawing funds
- Potential to lose funds due to market fluctuations
With new laws and regulations concerning healthcare for Americans, it’s more important than ever to make sure you, your family, and your business are properly insured with a plan that works for you. Choosing a healthcare plan can be complex, and some individuals may find it daunting. As you go through the health insurance process, keep in mind some important tips that can help you find the plan that best suits your needs.
1. Understand What Each Plan Covers
As you look at your option, pay close attention to the benefits and coverage that each one offers. What’s right for you may not be right for others, so personalization is key. It’s important to make sure that you’ve given each option a thorough “exam” to make sure that all of your fundamental bases are covered.
In general, there are 10 main benefits that you should keep in mind when looking for a plan:
- Emergency services
- Laboratory tests
- Prescription drugs
- Newborn and maternity care
- Substance abuse and mental health treatment
- Outpatient care
- Pediatric services, including vision and dental
- Preventative services, such as mammograms and immunization
- Rehabilitation services
2. Consider All Associated Costs
Naturally, a main concern of finding a healthcare plan is making sure that it’s within your budget. Generally speaking, you can pay for your insurance plan in two primary ways: a monthly premium for purchasing the plan, and out-of-pocket expenses that are paid upon the receipt of medical care. The second option typically includes a combination of coinsurance, copays, and deductibles. In many cases, those who pay a higher premium up-front will pay less when they receive medical care. Likewise, those who pay a lower premium will typically face higher costs when receiving medical care.
3. Consult an Experienced Insurance Agent
There are a lot of considerations for a healthcare plan. This is where the help of an experienced insurance agent comes in. A health insurance agent can provide you with actionable and meaningful tips, as well as help you through the entire process. A common misconception is that you’ll always have to pay an agent – but this isn’t true. Many insurance agents will offer services for free, and receive compensation from the company through which their client signs up for a plan.
Call us today at 704-527-4220 to speak with a licensed insurance agent and find the best healthcare plan for you, your family, or your business.