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What you might not know about the ACA?

Many Americans are hoping for a reform in the health insurance system. They are hoping that the Trump administration delivers on its promises regarding health care. People want choices and perhaps that is what the incoming administration is planning to accomplish. It is not clear what changes may be made yet.

What most do no know is that in many states people only had one choice for their health insurance. What is worse is that in other states people had no choice in health insurance. Moreover, many of those who did sign up for insurance through the ACA, were unable to pay their premiums. Many people who qualified for the ACA, did not qualify for government subsidies.

The idea of the ACA was to get the young and healthy people to sign up to provide a cushion for those older Americans who do need health insurance more often. This, however, was not very successful. Young people were priced out of the market, as current wages do not keep up with the rising cost of living.

Obviously the health care system is incredibly imbalanced and a ponderously expensive entity that needs work to make it function well. Much like immigration reform, a replacement for the ACA is going to take some foresight and careful consideration.

Posted on Tuesday, February 28th, 2017. Filed under Health Insurance.

The Affordable Care Act May Not Be So Affordable

Before the Affordable Care Act (ACA) came into being there was a four tier co-pay plan in place. When the ACA was passed people had to know their insurance plan very well, in order to make the most informed decision about switching healthcare.

While there is a great deal of speculation as to what may or may not replace the ACA, it is clear that it was challenging for many people who were used to the previous health care system. Before it was implemented, the four tier co-pay plan was clear: a set price for Tier 1 (preferred generic) and another price for Tier 2 (non-preferred generic).

When the ACA arrived, Americans had to pay close attention to their insurance plans. Many plans stated generic drugs were at no cost; Tier 2 through Tier 4 did not have a co-pay (only after the deductible is reached). Bronze and Silver plans use a major medical deductible before you get the co-pay for brand name drugs. Many of these changes, however, are proving to be costly for individuals and families.

Tier 3 had a certain dollar amount for preferred brand name drugs and Tier 4 may have had a higher set price or an option of paying 25 percent of a drugs listed price. Some individuals may have had a separate deductible for brand name drugs. Health Savings Accounts were in effect prior to the ACA’s arrival, but there was not separate deductible for brand name drugs.

In or out of network was a hard choice due to the costs. An example would be a woman who chose to go out of network on a Preferred Provider Organization plan (PPO). Once out of the network, out-of-pocket expenses and deductibles double. Put another way, going out of the network not only significantly hiked costs but some services are not covered. This means you pay thousands of dollars for medical care and none of it would be applied toward your out-of-pocket maximum.

All ACA plans must have ten health benefits compared to the “other” system which included seven benefits.

ACA Must Have Benefits:

  • Outpatient care
  • Emergency room care
  • Hospital care
  • Prescription drugs
  • Recovery services
  • Lab work, blood work
  • Preventative care

Private (Individual Market) Plan Benefits:

  • Outpatient care
  • Emergency room care
  • Hospital care
  • Prescription drugs
  • Recovery services
  • Lab work, blood work
  • Preventative care (a moving target in terms of what is/is not covered)
  • Mental health (optional)
  • Maternity (optional)
  • Pediatric dental (optional)

Many Americans wondered why their costs soared instead of dropped. The answer lies in the way the ACA reform was funded. To fund such changes, there were multiple federally mandated fees (five to be exact) that began to show up on premiums in 2014. The fees were billed to insurance companies and in turn were passed along to the healthcare user.

Will the private, individual market plans return? Would a return to the old system benefit Americans? Would a blend of the old and new systems work best? Only time will tell.

Posted on Friday, February 24th, 2017. Filed under Health Insurance.

What Does the Affordable Care Act Really Mean?

With the United States facing significant changes in many areas, including health care, trying to understand what the Patient Protection Affordable Care Act (ACA) may evolve into is an unknown.

According to many industry watchers, since the ACA was enacted, over five millions people saw their health insurance policies discontinued because they did not meet ACA standards. Those plans were labeled as being unsatisfactory. However many scrapped plans offered more and were more valuable to customers than what was being sold under the auspices of the ACA.

What are the possible differences between the ACA and what may happen if it is repealed?

  • The ACA plans are focused on preventive care
  • According to the law, many of the services are covered without co-pay
  • Many of the services are not subject to co-insurance
  • Many of the services do not have a deductible
  • These services are supposedly free, but as benefits, they add to premium costs
  • Added premium costs are paid for by policy holders on the front end
  • Health Savings Account-like plans are in the Bronze category under the ACA with a family deductible of over $12,000

The number of claims an insurance carrier gets determines premium costs. There is no underwriting under the ACA, which increases an insurance company’s claim expenses. Increased costs for the increased risks translate into higher premiums. To bring costs down many carriers have restricted their networks of hospitals and doctors — a turn of events that means Americans may have to change doctors or change insurance carriers.

If the ACA is repealed and a different kind of health care system comes into play, such as the system in existence before the ACA was passed into law, the following may be implemented:

  • Insurance plans would focus on major medical
  • Health Savings Accounts with a High Deductible Health Plan or plans similar in nature may return
  • Prescription drug coverage and doctor visit co-pays were applied to the deductible
  • Monies in the savings account could pay for drugs and doctor visits
  • Many people can pay $100 to $200 to visit a doctor

The possible repeal of the ACA and what would replace it is unknown. If the old system is revitalized, consumers may well see more choices and competitive rates and plans.

While the repeal of ACA is ongoing, the prospect for more fair insurance rates and a return to better plans may be hovering on the horizon.

Posted on Monday, February 20th, 2017. Filed under Health Insurance.

Repeal and replace the ACA?

The incoming administration is determined to repeal and replace the Affordable Care Act (ACA). It is difficult to know yet, what is to replace it and how the new system will work. Some provisions from the ACA may be kept in place like keeping kids on a parent’s health plan until they are 26 years-old and not denying people health insurance if they have pre-existing conditions. But the question remains how is the Trump administration going to accomplish this?

Because there is no established system that keeps track of who signed up for insurance and who did not. The question is how to determine who did get insurance, who did not, who was possibly forced into buying it and who still does not have insurance.

Some pundits claim that the ACA gave coverage to 20 million Americans who had never had insurance before. Others say, that it was 14 million counting those who were insured but lost their insurance and had to buy new plans under the ACA. Many people feel cheated and overcharged with their health insurance plans under the ACA.

What is next? Some Americans hope that the Trump administration will repeal the and replace the current healthcare system with something that will lower insurance costs, lower premiums and open the market up with more insurance choices.

Posted on Monday, February 6th, 2017. Filed under Health Insurance.