HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS - DAVID GOLDSTEIN #126793 2019 - please do not reproduce or distribute without author's permission ...
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DAVID GOLDSTEIN #126793 HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS © 2019 - please do not reproduce or distribute without author’s permission
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS WHO I AM ▸ RVer like you - 3 years full-time ▸ Age 57, wife age 56 ▸ Recovering lawyer, long-time entrepreneur ▸ Retired from full-time career; now work part-time for Escapees ▸ Not an insurance professional ▸ Have had to navigate all these options myself
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS WHAT WE'LL COVER ▸ Important concepts for RVers ▸ Understanding the available options ▸ Understanding ACA subsidies ▸ How to choose ▸ Resources You can download a copy of this presentation from today’s schedule in the Escapade 59 app.
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS WHAT WE WON'T COVER ▸ Medicare (over 65) ▸ Medicaid ▸ Children’s Health Insurance Program (CHIP) ▸ TRICARE (retired military) ▸ Recommendations of specific companies or products
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS HERE WE GO…
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS IMPORTANT CONCEPTS
IMPORTANT CONCEPTS FOR RVERS
THE PURPOSE OF HEALTHCARE COVERAGE
▸ Is NOT… NEARLY 60% OF PEOPLE WHO
▸ to cover routine expenses HAVE FILED FOR BANKRUPTCY
▸ to avoid a tax penalty SAID A MEDICAL EXPENSE
“VERY MUCH” OR “SOMEWHAT”
▸ IS to cover potentially catastrophic CONTRIBUTED TO THEIR
unexpected costs due to… BANKRUPTCY. THAT WAS MORE
▸ Severe illness THAN THE NUMBER WHO CITED
▸ Traumatic injury HOME FORECLOSURE OR
STUDENT LOANS.
▸ With no coverage, you risk:
▸ Providers refusing to offer
services
American Journal of Public Health
▸ Bankruptcy and financial disaster
IMPORTANT CONCEPTS FOR RVERS
NATIONWIDE COVERAGE
▸ Access to provider network outside home state?
▸ HMO vs. PPO/EPO
▸ Need for PCP referrals can make HMO impractical for
travelers
▸ Many HMOs (and some PPOs/EPOs) provide no
coverage outside state except for emergencies
▸ Definition of “emergency” can be narrow
IMPORTANT CONCEPTS FOR RVERS DOMICILE ▸ You must get coverage in zip code of your domicile ▸ Plan availability & cost can drive choice of domicile ▸ Might make it worthwhile to change domicile ▸ OR might make it worth keeping your current domicile
IMPORTANT CONCEPTS FOR RVERS AFFORDABLE CARE ACT ▸ “ACA” or “Obamacare” ▸ Much more than just subsidies ▸ Provides numerous consumer protections for "compliant" plans ▸ Has caused higher premiums because of… ▸ Broad coverage required ▸ Political uncertainty
IMPORTANT CONCEPTS FOR RVERS
ACA-COMPLIANT VS. NON-COMPLIANT PLANS
ACA-compliant Non-ACA-compliant
Regulated? Yes Only if it’s “insurance”
Provides 10 Essential Health Rarely - benefits like mental health, substance
Yes
Benefits? abuse and wellness may be excluded
No - health questions required; can be
Guaranteed acceptance? Yes
declined or charged more for some conditions
Guaranteed renewable? Yes Varies
Pre-existing conditions No - usually excluded for 1-5 years
Yes
covered? (or may never be covered)
Unlimited lifetime benefits? Yes No
Enroll anytime? No Yes, generally
Avoids tax penalty? Yes Yes - individual mandate repealed for 2019
Eligible for subsidies Yes No
Cost without subsidies $$$$$+ $$ - $$$IMPORTANT CONCEPTS FOR RVERS ESSENTIAL HEALTH BENEFITS
IMPORTANT CONCEPTS FOR RVERS ENROLLMENT WINDOW ▸ ACA-compliant plans available only during specific period ▸ Open enrollment (everyone) ▸ Generally November 1 - December 15 ▸ Expanded in some states & for some plans ▸ Special enrollment period = 60 days from qualifying life event, including: ▸ Marriage ▸ Having or adopting a child ▸ Moving (changing domicile) ▸ Involuntary loss of other coverage ▸ Change in income
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS UNDERSTANDING THE AVAILABLE OPTIONS
UNDERSTANDING THE AVAILABLE OPTIONS
SUMMARY OF OPTIONS
▸ ACA-Compliant
▸ Group (employer-provided)
coverage
▸ COBRA continuation coverage
▸ Individual major medical plans
▸ Non-ACA-Compliant
▸ Short-term medical plans
▸ Fixed benefit plans
▸ Association health plans
▸ Health care sharing ministries
▸ CombinationsUNDERSTANDING THE AVAILABLE OPTIONS
GROUP (EMPLOYER-PROVIDED) COVERAGE
ACA Compliant? Subsidies? Nationwide Coverage?
YES
YES VARIES
(from employer)
▸ If you have it, keep it (usually)
▸ If it's available but you don't accept it, you cannot get ACA
subsidies
▸ Applies to eligible dependents as well
▸ Exception: affordable coverage ruleUNDERSTANDING THE AVAILABLE OPTIONS
COBRA CONTINUATION COVERAGE
ACA Compliant? Subsidies? Nationwide Coverage?
YES NO VARIES
▸ COBRA requires most employers to offer continued healthcare
coverage to all terminating employees
▸ Lasts up to 18 months
▸ You pay 100% of cost (no employer subsidy) + 2% admin fee
▸ You can change to a different employer-sponsored plan
▸ 30-day election period after termination
▸ Don't assume COBRA will be too expensive—compare other options
▸ Availability of COBRA does NOT disqualify for ACA subsidiesUNDERSTANDING THE AVAILABLE OPTIONS
INDIVIDUAL MAJOR MEDICAL PLANS
ACA Compliant? Subsidies? Nationwide Coverage?
YES NO
YES
(on exchange) (with few exceptions)
▸ Plans can be very expensive unless you qualify for
subsidies
▸ Plan availability varies greatly by state
▸ Of major RV domicile states (SD, TX, FL), only Florida has
PPOs with nationwide coverageUNDERSTANDING THE AVAILABLE OPTIONS
SHORT-TERM MEDICAL PLANS
ACA Compliant? Subsidies? Nationwide Coverage?
NO NO MAYBE
▸ Limited benefits (pre-existing conditions excluded, lifetime cap,
not all essential health benefits)
▸ Limited term
▸ Up to 12 months per term, but many states limit to 3 or 6 months
▸ No more than 36 months total
▸ Subject to underwriting
▸ Caution: “back-end underwriting”
▸ Renewals & renewal rates are not guaranteedUNDERSTANDING THE AVAILABLE OPTIONS
FIXED BENEFIT INDEMNITY PLANS
ACA Compliant? Subsidies? Nationwide Coverage?
YES
NO NO
(usually)
▸ Pay a fixed cash benefit for each covered event
▸ Examples: $100 per physician visit, $3,000 per day of hospitalization
▸ Higher payments = higher premiums
▸ National coverage
▸ Most allow you to see any licensed provider in the country
▸ Some also provide access to managed care network to help control
your costs
▸ Most require simple underwritingUNDERSTANDING THE AVAILABLE OPTIONS SAMPLE FIXED BENEFIT SCHEDULE
UNDERSTANDING THE AVAILABLE OPTIONS
THE RISK OF FIXED BENEFIT PLANS
TRUE INSURANCE FIXED BENEFIT PLANS
PLAN PAYS YOU PAY
EVERYTHING EVERYTHING
COSTS OF CARE
ABOVE THAT ABOVE THAT
COSTS OF CARE
AMOUNT AMOUNT
YOU PAY A PLAN PAYS A
FIXED AMOUNT FIXED AMOUNT
FIRST (COPAY, FIRST FOR
DEDUCTIBLE, EACH COVERED
ETC.) EVENTUNDERSTANDING THE AVAILABLE OPTIONS
ASSOCIATION HEALTH PLANS
ACA Compliant? Subsidies? Nationwide Coverage?
NO YES
NO
(usually) (usually)
▸ Coverage procured by a membership group, much like an employer
▸ Rules now allow more groups to qualify
▸ Principal purpose may be to provide members with insurance
▸ Sole proprietors without employees now eligible
▸ Associations may get large-group insurance or self-insure
▸ Large-group insurance may not cover all EHBs
▸ Self-insured groups not subject to state regulations or to some ACA protections
▸ AHPs are in flux due to recent deregulation
▸ Bottom line: less expensive coverage, but also lower qualityUNDERSTANDING THE AVAILABLE OPTIONS
HEALTH COST SHARING MINISTRIES (HCSMS)
ACA Compliant? Subsidies? Nationwide Coverage?
YES
NO NO
(usually)
▸ How HCSMs work
▸ Members contribute a “share” (payment) monthly, usually to a pool
▸ HCSM pays member claims out of the pool
▸ Members must follow a common set of religious or ethical beliefs
▸ Advantages:
▸ Share amounts are usually less than unsubsidized individual major
medical premiums
▸ Usually provide access to provider network with agreed discountsUNDERSTANDING THE AVAILABLE OPTIONS HEALTH COST SHARING MINISTRIES RISKS ▸ HCSMs are not insurance! ▸ Virtually unregulated ▸ No guarantee of payment ▸ Little coverage for pre-existing conditions ▸ Can charge higher rates or decline membership based on health status ▸ Limited services ▸ Limits on amount that will be paid annually & lifetime ▸ May have exclusions related to beliefs of the group ▸ Not all providers will accept coverage
UNDERSTANDING THE AVAILABLE OPTIONS
COMBINATIONS
▸ Don’t overlook combining two or more products to get
what you need
▸ Examples:
▸ Subsidized marketplace plan offering only in-state
coverage + fixed indemnity plan for when you travel
▸ COBRA + HCSM to bridge pre-existing condition
waiting periodHEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS UNDERSTANDING ACA SUBSIDIES
UNDERSTANDING ACA SUBSIDIES WHAT IS THE ACA SUBSIDY? ▸ “Subsidy” = Premium Tax Credit ▸ Amount based on income ▸ Dollar-for-dollar reduction in income tax ▸ Can be used in advance to offset premiums on an ACA plan ▸ Reconciliation on your tax return ▸ Limitation on how much you can owe
UNDERSTANDING ACA SUBSIDIES
EFFECT OF ACA SUBSIDIES
▸ Family of 2 adults, no children ▸ Sumter County, Florida (33513)
▸ Both age 55, non-smokers ▸ Unsubsidized Silver plan premium: $1,606/month
Premium Tax Credit Estimated Net Premium
$1,577 $1,541
$1,600 $1,520
$1,426
$1,319
$1,200
Amount per month
$1,200 $1,065
$800
$541
$400
$406
$287
$179
$29 $65 $85
$0
$16,460 $22,715 $24,690 $32,920 $41,150 $49,380 $65,840
ACA Modified Adjusted Gross IncomeUNDERSTANDING ACA SUBSIDIES
WHO QUALIFIES FOR ACA SUBSIDIES?
▸ Three main requirements
1. No access to affordable employer-sponsored
coverage
2. Income within a certain range
3. Not eligible for Medicaid or CHIP
▸ There are others that won’t be of concern to most RVersUNDERSTANDING ACA SUBSIDIES
ACA SUBSIDIES - ACCESS TEST
▸ No access to "affordable" employer-sponsored coverage
▸ You have "access" if it's available, even if you don't
accept it
▸ Employer coverage is "affordable" if
▸ It provides “minimum value” (60% of average costs)
▸ It covers inpatient and physician services (less than
Essential Health Benefits) - most plans do
▸ Employee-only premium for lowest-cost plan isUNDERSTANDING ACA SUBSIDIES
FAMILY "GLITCH"
▸ “Affordability” is based on
employee-only cost, not
family cost
▸ Most employers pay no
portion of dependent
premiums
▸ Result:
▸ Entire family is ineligible for subsidies
▸ But family coverage is definitely not “affordable”
▸ Must buy other coverage for spouse (and children if not eligible
for CHIP)UNDERSTANDING ACA SUBSIDIES ACA SUBSIDIES - INCOME TEST ▸ Income is 100% (or 138%) to 400% of Federal Poverty Level for family size ▸ “ACA Modified Adjusted Gross Income” ▸ Form 1040 Adjusted Gross Income ▸ + non-taxable Social Security benefits ▸ + tax exempt interest ▸ + foreign earned income
UNDERSTANDING ACA SUBSIDIES STATES WITH EXPANDED MEDICAID
UNDERSTANDING ACA SUBSIDIES
INCOME LEVELS ELIGIBLE FOR ACA SUBSIDIES (2020)
▸ 2019 FPL guidelines, for determining 2020 subsidies (previous year’s FPL guidelines are used)
▸ Thresholds are higher in Alaska & Hawaii
Lower income limit Upper income
People in
States without Medicaid States with Medicaid limit (400% of
household
expansion (100% FPL) expansion (138% FPL) FPL)
1 $12,490 $17,236 $49,960
2 $16,910 $23,336 $67,640
3 $21,330 $29,435 $85,320
4 $25,750 $35,535 $103,000
5 $30,170 $41,635 $120,680
6 $34,590 $47,734 $138,360UNDERSTANDING ACA SUBSIDIES ACA SUBSIDIES - MEDICAID/CHIP TEST ▸ Not eligible for Medicaid or CHIP ▸ CHIP benefits available at higher incomes, so kids might not be eligible for subsidies even if parents are
UNDERSTANDING ACA SUBSIDIES
BEWARE THE ACA SUBSIDY "CLIFF"
▸ At max income, you lose about 33% of possible subsidy
▸ At $1 more, you lose 100% of subsidy!
Premium Tax Credit
$20,000
THE “CLIFF”: $1 MORE
IN INCOME COSTS YOU
$15,000 $12,780 MORE FOR
PTC per Year
INSURANCE!
$10,000
$5,000
$0
$16,460 $22,715 $24,690 $32,920 $41,150 $49,380 $65,840 $65,841 $67,500 $70,000
ACA Modified Adjusted Gross IncomeUNDERSTANDING ACA SUBSIDIES
HOW TO AVOID THE "CLIFF"
▸ Income too high?
▸ Make a pre-tax Traditional IRA
contribution (only option after
end of year)
▸ Contribute to an HSA
▸ Draw on savings if necessary to
make up difference
▸ Income too low?
▸ Convert Traditional IRA to RothHEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS HOW TO CHOOSE
HOW TO CHOOSE
A DECISION TREE START HERE
yes FLORIDA yes ELIGIBLE no yes KEEP YOUR GROUP
FLORIDA BLUE PPO* FOR SUBSIDY? EMPLOYED?
DOMICILE? PLAN
no no
COBRA OR MARKETPLACE PLAN*
MARKETPLACE SERIOUS yes + INDEMNITY OR HCSM; DROP
PLAN* (MAYBE + OR CHRONIC MARKETPLACE PLAN AFTER PEC
INDEMNITY) PEC? WAITING PERIOD
no
OFF-EXCHANGE INDIVIDUAL no OTHER yes COBRA IF AVAILABLE, OTHERWISE
MAJOR MEDICAL, FIXED BENEFIT MAJOR HEALTH HCSM OR SHORT-TERM MEDICAL
PLAN OR HCSM ISSUES? W/GUARANTEED ISSUE
PEC = pre-existing condition NOTE: This chart represents my own opinion as a
layperson and is provided for general education
*if not in a qualified enrollment period, use short- only. Each individual’s situation is different. Always
term medical or COBRA until next open enrollment consult with an insurance professional.HOW TO CHOOSE
HOW TO SHOP
▸ healthcare.gov (if you think you'll
qualify for subsidies)
▸ Online portals (if you REALLY know
what you're doing)
▸ Assistance of a licensed insurance
broker is vital to compare options
▸ Avoid single-product agents
▸ Brokers will have access to
different plans, so may need to
shop around for best deal
▸ Check broker’s customer ratingsHEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS RESOURCES - GENERAL ▸ RVer Insurance Exchange’s 2019 Guide to Health Plan Options for RVers: http:// www.rverinsurance.com/health-insurance-guide/ ▸ How to Buy An Individual Health Insurance Plan: https://www.insurance.com/ health-insurance/health-insurance-basics/how-to-buy-an-individual-health- plan.html ▸ About the Affordable Care Act: https://www.hhs.gov/healthcare/about-the-aca/ index.html ▸ Association Health Plans https://www.healthinsurance.org/blog/2018/06/01/ the-problem-with-association-health-plans/ ▸ Health Care Sharing Ministries: What Are the Risks to Consumers and Insurance Markets? https://www.commonwealthfund.org/publications/fund-reports/2018/ aug/health-care-sharing-ministries
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS RESOURCES - ACA SUBSIDIES ▸ Will you receive an Obamacare premium subsidy? https://www.healthinsurance.org/ obamacare/will-you-receive-an-obamacare-premium-subsidy/ ▸ ACA Modified Adjusted Gross Income: https://www.healthinsurance.org/glossary/modified- adjusted-gross-income-magi/ ▸ Yearly Guidelines and Thresholds 2019: www.healthreformbeyondthebasics.org/wp-content/ uploads/2017/11/REFERENCEGUIDE_Yearly-Guidelines-and-Thresholds_2019.pdf ▸ Health Insurance Marketplace Subsidy Calculator: https://www.kff.org/interactive/subsidy- calculator/ ▸ Premium Tax Credit Change Estimator: www.taxpayeradvocate.irs.gov/estimator/ premiumtaxcreditchange/estimator.htm ▸ Medicaid coverage by state: https://www.healthinsurance.org/medicaid/
HEALTHCARE OPTIONS FOR PRE-MEDICARE RVERS QUESTIONS
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