Good Neighbor Insurance (www.gninsurance.com and dev.gninsurance.com) is continuing to update our clients on the new health insurance laws. There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. Many critical details of this new insurance law will be clarified in the months and years to come.
These six major coverage options are:
(1) Individual or family coverage
(2) Employee/employer group option for small businesses (typically under 50 employees)
(3) Employee/employer group option for large businesses (typically larger than 50 employees)
(4) Exchange options through the state you are residing in (fully integrated 1-1-2014 and are quasi-government and private insurance coverage combined)
(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards
(6) Full government health plans like Medicaid, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.
Note: Updated 8-20-2010
High-risk pools are temporary and will morph into Exchanges starting 1-1-2014. States may run their own high-risk pool or have the US federal government carry out the program which will be similar for all states. The high risk-pool has started on 7-1-2010 and will continue till 12-31-2013. Currently twenty-one states have asked the federal government to run their high-risk pool.
Individuals who have a pre-existing medical condition and have not had creditable coverage for the previous six months.
The Secretary of HHS will determine the minimum benefits that must be included and plans must cover at least 65% of health care costs.
Premiums and Cost-Sharing
Set premiums as if for a standard population and not for a population with a higher health risk. Allow premiums to vary by age (4:1), geographic area, and family composition. Limit out-of-pocket spending to $5,950 for individuals and $11,900 for families, excluding premiums.
$5 billion currently
Q AND A
Who is eligible for coverage through the temporary high-risk pool?
U.S. citizens and legal residents who have a pre-existing medical condition and have not had creditable health coverage for the previous six months are eligible for coverage.
What benefits will high-risk pool enrollees receive?
The high-risk pools will cover a range of benefits, including primary and specialty care, hospital care and prescription drugs. The health plans will be required to cover pre-existing medical conditions upon enrollment. The high-risk pool programs must cover at least 65% of the health care costs for a standard population.
How much will high-risk pool health coverage cost?
The premium cost for high-risk pool coverage will be established for a standard population in the non-group market and will not be based on the health status of enrollees. Premiums will be allowed to vary by age (by a 4 to 1 ratio), geographic area, and family composition. Premiums for the high-risk pool operated by the federal government will be available on July 15, 2010. Yearly out-of-pocket costs will be limited to $5,950 for individuals and $11,900 for families, excluding premiums.
How will the high-risk pool be funded and administered?
The health reform law allocates $5 billion to administer the national high-risk pool. This funding will go toward health care claims and administrative costs that exceed the premiums collected for the high-risk pool. On April 2, 2010, U.S. Department of Health and Human Services Secretary Kathleen Sebelius issued a letter that gives states the following options for operating the temporary high-risk pool: (1) Operate a new high-risk pool alongside an existing state high-risk pool; (2) Establish a new high-risk pool if the state does not currently have one; (3) Build upon other existing coverage programs designed to cover high-risk individuals; (4) Contract with current HIPAA insurance carriers or insurers of last resort to provide subsidized coverage; or (5) Do nothing, in which case the U.S. Department of Health and Human Services would carry out the coverage program in the state.
When does the high-risk pool go into effect?
The federal high-risk pool will begin taking applications on July 1, 2010 and coverage will begin on August 1, 2010. States operating their own high-risk pools will also aim to begin coverage relatively soon, but may not all meet the August 1 date for coverage. The high-risk pools will terminate on January 1, 2014 when the state-based American Health Benefit Exchanges are established and other insurance market reforms go into effect, providing new coverage options for people with pre-existing health conditions.
Given that this is a temporary form of coverage, what happens to people when the high-risk pool terminates in 2014?
When the temporary national high-risk pool terminates on January 1, 2014, high-risk pool enrollees will transition into receiving health coverage through the state-based American Health Benefit Exchanges. Procedures will be developed to ensure that there are no lapses in coverage. Individuals without employer health coverage and small businesses with up to 100 employees will be able to purchase coverage through the Exchanges. Premium and cost-sharing subsidies will be available for individuals with incomes between $14,404 – $57,616 and for families of four with incomes between $29,327 – $88,200. People will also be able to choose to purchase coverage in the individual market. As of 2014, insurers will not be able to deny adults coverage or charge higher premiums based on health status.
How many high-risk pools currently exist in the United States and what will happen to enrollees?
Currently, 34 states operate high-risk pools that provide health coverage to nearly 200,000 individuals. State high-risk pools share a common structure and some similarities but differ by state in many ways including eligibility, benefit design, pre-existing condition exclusions, premium costs and cost-sharing, and administration, among other areas. People who currently obtain health coverage through a state high-risk pool will maintain their current coverage. In 2014, these individuals will likely transition into the state-based American Health Benefit Exchanges. Given that the Exchanges would prohibit people from being denied coverage or charged more based on health status and would limit cost-sharing, current state high-risk pool enrollees may receive more affordable coverage in the Exchanges than they currently have in the high-risk pool.
Twenty-two of the states told the Department of Health and Human Services that they did not want to run their own risk pool and requested the US Federal government run it which is allowed in the new US health law signed in March 2010. You may see the US federal government high-risk pool plan by going to www.pciplan.com.
* The very minimum an individual will pay if you’re under 35 is right around $12,340 a year. This is including monthly premium, deductible, and co-insurance. The co-insurance part of the policy holder is $5,950 in-network or $7,000 out-of-network. There is no lifetime maximum or cap on the amount the plan pays for your care.
* HHS (United States Department of Health and Human Services), contracted out to a private insurance company called the Government Employees Health Association; the Government Employees — the insurance plan is called the GEHA / Government Employees Health Association. This plan is an HSA (health savings account) qualified high deductible health plan. The plan gives you greater control over how you use your health care benefits, and they want you to open an HSA account. The applicant must also show proof of US citizenship when applying for this US federal government high-risk pool plan.
* There are no benefits payables for anything other than preventive diagnoses until you pay out of pocket $2500. This means there is a $2,500 deductible before any benefits is paid besides preventative coverage. The next part is the co-insurance part which is an 80-20 split for in-network (maximum of your part of the coinsurance is $5,950) / 60-40 (maximum of your part of the coinsurance is $7,000) split out-of-network until you have paid out of your pocket, not including the $2,500 in-network deductible / $3,000 out-of-network deductible.
To recap; Part 1 is your deductible which you are fully responsible for. Part 2, you and the insurance company share the cost of medical care called coinsurance. When you see 80/20 that means you pay 20% of the medical bill and the insurance company will pay the 80% part. Once you meet $5,950 out of your pocket for your 20% of the coinsurance part then you are going into part 3. Part 3 is where the insurance company pays the full amount there-after for the duration of the calendar year.
So your maximum out of pocket for medical care is going to be your deductible + your co-insurance part and if you are using all in-network medical facilities, in this example, you would be spending a total of $8,450 + any copays annually; this is on top of your monthly premium. This starts over each January 1st of the following year. You may view the schedule of benefits or what we call “looking under the hood of your insurance plan” at www.pciplan.com/forms/pdfs/BenefitsSummary.pdf .
* Here are the monthly PCIP premium rates for Georgia by the age of an enrollee.
Ages 0 to 34: $323
Ages 35 to 44: $387
Ages 45 to 54: $495
Ages 55+: $688
Here are the monthly PCIP premium rates for Arizona by the age of an enrollee.
Ages 0 to 34: $323
Ages 35 to 44: $387
Ages 45 to 54: $495
Ages 55+: $688
Doug Gulleson totally adores scuba diving and travels overseas throughout the year with his underwater camera in one hand and a cup of coffee in the other. Visit Good Neighbor Insurance at dev.gninsurance.com and www.gninsurance.com/tripcancellation for Arizona and international travel insurance coverage.