Idaho Braces for Health Insurance Rate Hikes

Last week the Idaho Department of Insurance released the proposed rate increases on health insurance and it is not good news for consumers. The Idaho Statesman reports that while not yet approved, the proposed rates reveal an average increase of 38%. What’s more, the benchmark Silver plans lead the pack with an average increase of a whopping 50%!

According to Dean Cameron, Director of the Department, as much as 20% of the increase is directly attributable to uncertainty caused by President Trump. Cost Sharing Reimbursements are provided by the Federal Government to insurance companies to help pay for health services to individuals making less than 250% of the Federal Poverty Level. President Trump has repeatedly threatened to end those payments which has caused insurance companies across the country to jack up the rates on the Silver plans that those payments directly affect.

Ironically, the President’s intermittent threats may actually help consumers and cost the Federal Government more money. The Advance Premium Tax Credits (APTC) that help reduce the monthly cost of insurance policies are based on the cost of the Silver plans. So, if the cost of those plans spike, as they are doing for 2018, then the amount of APTC available to consumers also goes up. President Trump’s attacks on the Affordable Care Act may inadvertently cause it to become even more popular n 2018.

While Idaho has more choice of companies in its exchange than some other parts of the country, one company has announced that it is pulling out of the exchange for 2018. Bridgespan, a sister company to Regence Blue Shield of Idaho, has announced that it will not offer any plans on Your Health Idaho, the Idaho exchange, in 2018. Here in North Idaho, Bridgespan saw an influx of business last year fueled in part by Blue Cross’ decision to change its network from the standard PPO model to a much more restrictive “modified” HMO. Those people who are currently on Bridgespan policies, and who are using Advance Premium Tax Credits (APTC) to purchase them, will have to find another company when Open Enrollment starts on November 1. Bridgespan is trying to get approval to let people keep their policies off the exchange. If approved by the Department of Insurance, that would mean those people could keep their Bridgespan policy but would have to pay full price for it without the benefit of APTC.

Although four companies offer policies on Your Health Idaho, only three are available in North Idaho: Blue Cross of Idaho, Mountain Health Co-op and PacificSource. Of the three, Mountain Health Co-op had the lowest proposed average increase of its plans at 25%, while PacificSource had the highest at 44%.

Open Enrollment has been shortened this year as well, running from November 1 to December 15. If consumers are going to make a change, it must be done within that period. Idaho’s individual health insurance customers will be well advised to be ready to shop carefully this year.

Time to Review Your Life Insurance?

Many people buy life insurance when they are young, perhaps when getting that first good job, but then never review it again. This is a mistake! Although there can be many reasons that your need for life insurance may change, there are some key events in life that can indicate the need for more or less life insurance coverage.

An article in US News and World Report last month highlighted several of these notable events:

  • Marriage: Some couples wait until they either have children or purchase a home to think about life insurance but this overlooks some key liabilities. Marriage creates a union in finances and each person is now exposed to the total liabilities as well as the assets of the couple. Usually, two incomes are being used to finance a certain lifestyle and consideration must be given as to what would happen if one of those incomes suddenly disappeared.
  • Children: The birth or adoption of children immediately creates financial commitments. These can range from making sure that a surviving spouse can raise the children with just one income to providing for higher education down the road.
  • Home Purchase: Most people get this one because it is such a large financial commitment and you want to be sure that a surviving spouse has enough money to continue ownership of the home. What is sometimes missed, however, is when the second or third home is purchased. Often the new home is more valuable than the last and the mortgage is even higher. It is important to review life insurance at each new purchase or refinance to make sure there is still enough coverage.
  • Starting a Business: When a person starts a business they often max out their resources and credit in order to get the fledgling enterprise off the ground. That simply means that if the person were to suddenly die, a surviving spouse or perhaps business partner would be left unable to move ahead without a significant amount of cash. In addition to coverage for a spouse, there are specialized policies for business partners to protect each other from disaster.
  • Over 50(ish) and Retirement: As they age, people often find themselves as “empty nesters” when the house is paid for, the kids are gone and college is no longer a worry. This is a time when life insurance can be reviewed and either decreased or possibly shifted to another type of coverage. Usually, the need for extremely large amounts of coverage has passed. At this time a person might do away with large term policies and perhaps look at either Long Term Care policies or Final Expense policies.

With regard to life insurance, every person’s situation is unique. Just because a co-worker or relative carries a certain amount of coverage, that has absolutely no bearing on how much you should carry. Any change in your financial or personal life can signal a review of your life insurance, but the times mentioned above should be your minimum benchmark. If you want to review your insurance, you may find my ebook Do You Really Need Life Insurance can be of great help.

New GOP Health Plan No Better

This week the GOP is scrambling to slap together another version of a Trumpcare plan that will please all party members. The Freedom Caucus, the ultra-conservative wing of the GOP, wants to essentially do away with any government involvement in health care and turn it all over to private, for-profit companies to decide what’s best for Americans. Of course, the people making these decisions have wonderfully comprehensive health insurance provided automatically by the taxpayers at absolutely no cost to them. So, it’s understandable that they might not always understand the dilemma of everyday working people facing the purchase of health insurance. That said, let’s take a quick look at a couple of the primary features of the plan the GOP is currently considering.

First, they want to allow states to obtain waivers if a particular state decides that it does not want to provide all of the ten Essential Health Benefits (EHB) mandated by the current Affordable Care Act (ACA). You’re going to hear more about these so let’s take a quick look at what these EHB’s are.

  1. Ambulatory Patient Services (Outpatient Care)
  2. Emergency Services
  3. Hospitalization
  4. Pregnancy, Maternity, and Newborn Care
  5. Mental Health and Substance Use Disorder Services
  6. Prescription Drugs
  7. Rehabilitative and Habilitative Services and Devices
  8. Laboratory Services
  9. Preventive and Wellness Services
  10. Pediatric Services including Oral and Vision Care

Before the ACA, many insurance companies limited Mental Health Care, put very low limits on Rehabilitative Services and often put separate, high deductibles on Pregnancy and Maternity Care. With the waiver system being proposed by the GOP, insurance companies could once again take us back to the pre-ACA days when the could pick and choose what services to offer and limit or exclude those coverages that they did not find profitable. Once again, people needing those services, or any others the insurance companies chose to exclude, would find themselves out of luck.This is the very sort of cherry-picking that the ACA was designed to prevent.

Second, the GOP claims they want to keep the provision of the ACA that requires insurers to accept people with pre-existing conditions, but they now want to allow the companies the right to charge those individuals higher rates. This is the system we already had! How much do you think it will cost someone with a cancer diagnosis to buy insurance? This is the same as saying you have the right to buy a 2017 Lamborghini Adventador SV Roadster — all you need to do is pay $535,500! The word you will hear thrown about is guaranteed “access” to health insurance. Access means absolutely nothing if the insurance companies can single out those with pre-existing conditions and price them out of reach.

As of today, there is no word on what they are now planning to do with Tax Credits that help people buy insurance, or the Cost Sharing subsidies that help offset the cost of healthcare for those making less than 250% of the Federal Poverty Level. Regardless of what their decision is on those items, the two items mentioned above are enough to determine that millions of people will see their health insurance options return to the pre-ACA days. But of course, the people in the House and Senate will see no impact whatsoever on their nice, taxpayer paid group health insurance plans that cover everything.

Will Trump Unwittingly Create Universal Health Care?

Donald Trump and his colleagues in the GOP claim to have one mission: repeal Obamacare and replace it with something supposedly better. After the Congressional Budget Office found that such a move would leave over 20 million uninsured in the country, some of his party balked. The far right wing of the GOP, however, felt that the GOP plan didn’t go far enough and rebelled because they wanted even less government support for healthcare. Consequently, nothing has been done so far.

What is interesting is that all this talk about abolishing the Affordable Care Act has caused California to revisit the idea of creating its own single payer system for its residents, essentially a Medicare for All plan within just one state. It takes a large pool of people to make such a plan work and California is one of the few states with enough people to probably make this work. The California legislature put forward similar plans in 2006 and 2008 but they were thwarted by then Governor Schwartzenegger.

A 2005 study indicated that such a plan could save the state a third of a Trillion Dollars over ten years. Interestingly, the Congressional Budget Office in 1991 and 1993 studied a similar plan for the entire United States in which they found that such a plan could cover everyone in the country and still cut the per capita cost of health care.

Although California has a long road ahead of it before this idea might actually become reality, it will be interesting to watch because it has implications for the entire country. It is important to remember that in some countries universal coverage did not happen overnight either. In Canada, for instance. the history of their single payer system shows that it started with a single province and then a second, and then the whole country.

So the fascinating question with regard to US health care is, will Donald Trump and the GOP be remembered as the catalyst for bringing universal health care to the last industrialized nation on earth that lacks it? If California is successful, it is entirely possible that, as California goes, so goes the Nation.

Will Trump Make Obamacare Implode?

It seems that the Trump administration can’t to decide whether Obamacare (ACA) will “explode” or “implode”. Different members of the GOP use these words interchangeably, seemingly unable to get their talking points synchronized. What all such statements have in common is the absolute lack of evidence or statistics that any such thing is actually going to happen.

Sure, premiums are going up but these memory-impaired politicians forget that premiums increased every year prior to the ACA being passed. Accepting those with pre-existing conditions was always going to cause a spike in rates until the pool stabilized, but to claim that premium increases only started after ACA was passed is just, well, a lie.

Oh, and I am amused that many of these same talking heads often reference the high-deductible plans that are the result of ACA. Excuse me? Actually, ACA made plans with deductibles like $7500 and $10,000 illegal! Once again, that information does not fit the GOP current agenda regarding the ACA, which is primarily “The sky is falling, run tell the King!”.

However, the message has continued to be that ACA is failing and that the public must accept whatever cobbled together mess the ruling party can come up with. One has to wonder if they have painted themselves into such a corner that the next step will be to torpedo the ACA themselves since it won’t fail on its own as they have predicted. There are many ways to do that even though the public, and some of their own party, have strongly denounced the plan they initially offered.

One way they can start that is by having the Justice Department stop defending the suit filed by the GOP House against President Obama in 2014 claiming that cost-sharing subsidies provided to some people to lower deductibles and out of pocket expenses are not legal. If Trump orders the Justice Department to stand down on the suit, then the plaintiffs prevail and the cost sharing subsidies disappear. If the insurance companies do not receive those subsidies, then they would either have to spike rates or drop out of the markets.

According to an article in The Hill on Tuesday, the Trump administration has not decided what to do. Insurance companies are clamoring for some direction because they can’t plan for 2018 unless the money is appropriated or the lawsuit defended. Only time will tell whether Trump will attempt to destroy the ACA himself or risk the possibility that the public’s growing affection for Obamacare will continue.

Introducing The Insurance Geek

The Insurance Geek is a blog and website designed to make some sense out of what is often a confusing subject for many people. Insurance is not an exciting purchase, certainly not like buying a new car. No matter how deeply you plunge into debt to get those new wheels, most everybody gets excited about pulling into the driveway with a shiny new car. An insurance policy, not so much. You really can’t wave your brand new health, life, home or auto insurance policy in the air and impress the neighbors. And, since the insurance is often required by the state or your bank, there is the additional burden of having been forced to do it.

During over 30 years as an insurance agent, I have found that, while people aren’t necessarily thrilled about the purchase of insurance, the biggest consternation arises from the fact that the coverage, options, features and premiums are seemingly designed to be as confusing as possible. I have spent far more time over the years just explaining insurance than I have actually “selling” it.

I have written a few ebooks on insurance topics with the express idea of providing consumers with the type of knowledge needed to be a smart shopper. Those ebooks are on this website under the Insurance Books page and can be purchased if you find an interest. There is another ebook coming soon about the incredibly frustrating subject of health insurance and another one on Medicare supplements and options.

To add to those ebooks, I will also be posting in The Insurance Geek blog where I plan to delve into the same sort of topics but in a more “bite-sized” blog approach and with greater frequency. I hope you will find the information helpful. My belief is that by taking just a little bit of time to become a more educated consumer, you will understand the subject a lot better and make the purchase of insurance a lot less aggravating and intimidating. And if I can do that for just a few people, it will have been a good day!

Happy Geeking!