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Health Insurance


Health Insurance Information

What is Health Insurance?

That is a question that would probably take days to answer, especially in light of the Affordable Care Act.  Everyone's talking about it and everyone knows that there is a mandate to carry insurance; but how does it work? 

The good news is that you don’t need to know everything.  You just need the information necessary to make an educated decision for your healthcare needs. A decision that allows you to secure the best rates for a plan that fits your needs.  This is where we come in- to educate you and help you make the right choice for you and your family. 

Simply put, health insurance is the most prudent way to finance your medical care and assure that you will not be forced to use your income and/or savings if the need for medical care should arise; in addition to making sure that you comply with the Individual Mandate.

Why can Insurance Companies do a better job at financing my healthcare costs?

First because insurance carriers insure millions of people, in all risk pools, in their plans.  Second they are able to collect billions of dollars in premiums to cover their costs of healthcare for those who are in the high risk pool.  Lastly, the carrier in California pay doctors and hospitals on a contracted rate and are mandated to  pay more than 85 cents out for every dollar they collect to health care providers. The other 15 cents of the dollar goes to enrolling people, paying claims, negotiating lower costs with medical providers, and keeping their insured notified on changes.

 

What is a "Contracted Rate" referred to in health insurance policies?

One of the biggest benefits of having health insurance is that you are able to pay reduced fees for medical services.  This reduced fee is called a "Contracted Rate."  The insurance companies negotiate on behalf of their insureds with doctors, hospitals, labs and other medical specialists to get the lowest costs possible, that cost becomes the Contracted Rate between the Medical provider and the carrier.  

 

Why do I need health insurance?

First, as of January 1, 2014, it is a Federal Mandate and without the insurance you will waste your hard earned dollars on paying unnecessary penalties.

More importantly, though, no one knows if you’ll get really sick or injured. We hope not. But, if something really bad happens, like you dive into a swimming pool and break your back; or you get a rare form of cancer; the cost of the immediate, top-quality medical care could easily be hundreds of thousands of dollars or more. No one can afford that. So, by paying a little bit each month to an insurance company, you will have the security of knowing that if something happens the insurance plan will be there.

What are the penalties I would pay for not carrying health insurance as of January 1, 2014?

 

The Penalties are as follows:

 

 

 

What are some highlights of Individual Health Insurance.

  • Beginning January 1, 2014, Individual Health Insurance is NO longer medically underwritten.  This is major step forward for accessibility of healthcare. This means that most Individual Health plans will be Guaranteed issue regardless of the health of the individual applying for coverage.  
  • The new Individual market makes it simple and more affordable for you and millions of other Californians to get health insurance that can't be cancelled or denied because of a pre-existing medical condition.
  • The Individual market, through the Exchange called  Covered California, makes available for those who financially qualify,  the use federal financial assistance that can help lower your health care costs in both premiums and out of pocket expenses.
  • You will benefit from new standards for health coverage. As part of the federal health care law, the Affordable Care Act, all insurance plans must cover Essential Health Benefits such as doctor visits, hospitalization, emergency care, maternity, pediatric care for your kids, prescriptions, and other services. All newly sold health insurance plans, whether purchased through the Exchange or the Individual marketplace will now cover these services.
  • Individual Health Insurance Contracts are month to month which means that you can cancel any month and renew up to age 65 as long as payment is made.
  • There are different options for Individual Health Insurance.  PPO's which will probably offer the most affordable care in the market, HMO's that have recently been priced out of the market and HSA's which are great options  if you plan to fund the separate HSA accounts.
  • Rates are standardized which means that the rates shown in our instant quote are best available on the market.
  • Maternity is mandated coverage on all new plans.  Preventative is covered at 100%.
  • Dominant carriers in the California individual market are Anthem Blue Cross, Kaiser, Blue Shield of California, and Health Net.

What is the Individual Exchange and Covered California?

The Excahnge creates state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges, administered by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. Exchanges will have a single form for applying for health programs, including coverage through the Exchanges and Medicaid and CHIP programs.

What is the difference between the Individual Exchange and the Individual Marketplace for Health Insurance?

The great news is that plans offered both on and off the Exchange are all guaranteed issue.  In other words, whether you decide to go through the Exchange or through the Individual Marketplace to secure health insurance, the plans will not require any Medical underwriting.

The Exchanges provide Premium and Cost Sharing Subsidies.  Provides refundable and advanceable tax credits and cost sharing subsidies to eligible individuals. Premium subsidies are available to families with incomes between 133-400% of the federal poverty level to purchase insurance through the Exchanges, while cost sharing subsidies are available to those with incomes up to 250% of the poverty level.

The Individual Marketplace provides similar health insurance plans that are purchased directly through the carriers, but no subsidies or cost sharing is applied to these plans. In other words, you can purchase the same kinds of health plans from Covered California as you can in the private market, but you can only use tax credits if you buy insurance through Covered California.

What is "Guaranteed Issue?"

Beginning on January 1, 2014, the ACA requires that all plans guarantee issue and renewability of health insurance plans regardless of health status and allows rating variation based only on age (limited to a 3 to 1 ratio), geographic area, family composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the small group market and the Exchanges.

 

Can My Agent secure me health Insurance coverage through the Exchange (Covered California) in addition to the Individual Marketplace?

Yes, absolutely.  A California licensed agent who has been certified by Covered California may assist in enrollments in the exchange.  Century Total Insurance Agency is a Certified Covered California agent and  prides itself on helping its customers navigate their way through the California Exchange system.

What happens if I already have Health insurance?

If you already have health insurance provided by your employer that is affordable, you do not need to do anything. If you are paying more than 9.5 percent of your household income toward insurance premiums, then you may be eligible for financial assistance available through the Exchange; and we will make sure that you received those benefits if you qualify. If you have insurance from your employer and apply for a tax credit, we must first determine if that health plan you are enrolled in is affordable and provides adequate coverage. If that coverage is determined to be affordable and adequate, then you cannot receive a government tax credit (subsidies or financial assistance) for new insurance.

What are the qualifications to qualify for Financial Assistance through the Exchange?

 

Do the ACA compatible Health plans have Maximum Annual Limits?

The ACA prohibits annual limits on the dollar value of coverage beginning January 1, 2014.

What are Essential Health Benefits?

Beginning January 1, 2014, all health plan will include essential health benefits package that provides a comprehensive set of services, limiting annual cost-sharing to the Health Savings Account limits ($5,950/individual and $11,900/family in 2010).

*******What kind of plans will be available beginning January 1, 2014?

The ACA creates four categories of plans to be offered through the Exchanges, and in the individual and small group markets, varying based on the proportion of plan benefits they cover.

Pay Attention to the following when you are looking for Individual Health Insurance.

  1. How much you pay when you see a doctor – this is the “Dr. Copay” – it could be $20, or 40% after a deductible. Know how much you pay when you see a doctor.
  2. How much you pay when you go into the hospital – this could be before or after a deductible, there could be a charge per day or per admission.
  3. How much is the maximum you will have to pay if you have a catastrophe – this is the “out-of-pocket limit” (you’ll see it abbreviated as “OOP” .) This is the maximum YOU pay in one year. Generally, the insurance company pays 100 percent of expenses after this amount – with some exceptions (i.e. prescription copays).
  4. How much you pay for prescription medicine – miracle drugs keep people out of the hospital and they can be very expensive. You should understand what you are expected to pay for your prescription drugs with each medical plan you are considering.

Final Advice

Don’t get overwhelmed with the weird terms and many selections. We are here to help you compare plans and see if you qualify for subsidies.  When you are ready, get your individual health insurance quote.

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