Your health insurance experts for NC & SC

Alternatives to ACA Plans - Pros and Cons you should know

November 17, 2017
I've seen so many people online searching for alternatives to ACA ("Obamacare") plans. I TOTALLY get why people are looking for less expensive options, as ACA premiums have certainly gone beyond anything I could have dreamed when the law first went into effect in 2014.

But having spent close to 20 years in this business, I've seen enough to know that most people find health insurance plans pretty darned confusing. Then throw in a bunch of "alternatives," and I'm concerned about the potential for very expensive misunderstandings - of people thinking they're fully covered, and they're NOT even close to that.

I think you should be well informed about the health care coverage you're considering before you choose something with such huge potential financial consequences. In this day and age, health care costs can reach a million dollars shockingly quickly. (Which is a post for another day.)

Here are the types of plans I see most frequently being marketed as major medical work-arounds. In the interest of full disclosure, I am suggesting certain of them to my clients as well - but only while advising them of the potential pitfalls.

Indemnity plans. These plans plan pay a flat amount for a variety of types of medical services. For instance, they will pay the policyholder, say, $5000 per day in the hospital, perhaps $2,000 per day for outpatient chemo treatments, etc.

While they are considered insurance plans, do NOT think they will come anywhere close to covering your potential medical bills. Even a "minor" stay in the hospital - meaning no surgery or expensive tests - can easily run $10,000 a day. The same for chemo treatments and all the associated bills that go along with them.

While indemnity plans can serve as an add-on to a major medical plan to help offset out-of-pocket costs, I would NEVER recommend one to my clients as a major medical replacement.

Faith-based coverage. These are not insurance products. Because of the separation of church and state, it was determined that holders of faith-based plans are not subject to the individual mandate - aka the tax penalty.

While faith-based plans are generally offered by well-meaning organizations, just be aware that you have a relatively small pool of people paying fairly small monthly payments. Since the plans are not in any way regulated, I don't know who or what is actually minding the finances to be sure of sufficient reserves. It's very possible a few really large claims could up-end the ship.

If they are unable to pay your bills or have to close down completely, there are no legal protections. Enough said.

Short-term medical (STM) plans. The original (and still the intended) purpose of short-term medicals plans is to provide temporary coverage between major medical plans. The down-sides of short-term plans are that they require underwriting (health questions), and do not cover pre-existing conditions, most preventive care, or maternity.

ecause of all these limitations, short-term plans just won't work for a fair number of who either need pre-existing conditions covered or who will be declined for coverage altogether. Also, since they don't meet the requirements of the ACA, they do not protect those covered from the tax penalty. 

As of March of 2017, short-term plans were limited to three-month coverage periods. Some carriers are now getting around this by automatically allowing policyholders to re-up after the first 3-month period and are waiving the pre-existing condition clause for any new condition that arise after that first 3-month policy was issued.

Be aware that deductibles and coinsurances do start over with each 3-month re-write - so don't get too carried away with opting for really high deductibles.

I think we are going to see a loosening of the regulations surrounding STM plans under the current administration, so stay tuned for possible future short-term options for longer terms. 

Minimum Essential Coverage (MEC) plans. These are primarily (from what I've seen) preventive care plans. The big selling point for them is that, because they offer what the government considers "minimum essential coverage," they apparently protect the insured from the tax penalty.

So what am I advising for my clients? For those who are 1) not eligible for a subsidy, 2) reasonably healthy and 3) unable or unwilling to pay the high premiums of ACA plans? I'm suggesting that a combination of a short-term plan that offers repeat re-writes with a MEC plan offers the best alternative coverage available at the current time.

Is it flawless? Absolutely not. But I'm sharing the potential pitfalls with my clients so they can make an informed decision about how much risk they're willing to take.

Of course, that's as of this moment. Insurers could come out with new options or Washington, DC, could come out with new edicts that could change the landscape. But for now, we have to work with the options we have and the limitations within our current regulations, so that's my game plan for the foreseeable future.


Who should shop (or re-shop) for health insurance during the AEP?

October 27, 2015
As I write this, we are moving very close to the opening day for shopping for 2016 health plans. The Annual Enrollment Period runs from November 1st through January 31st. This is the third AEP under the Affordable Care Act (ACA or "Obamacare"). Let's take a look at who can benefit from this opportunity to comparison-shop among plans.

They include those who are:
  • Currently without health insurance, including those who have short-term (also called 'temporary') insurance, since those do not meet th...

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Small Biz Owners - Are Your "Benefits" Actually Costing Employees More?

October 7, 2015
In another perplexing conundrum of the Affordable Care Act (ACA), health insurance benefits offered to employees and their families may well actually be costing the employees MORE!

How could that be? Here's how:

The ACA states that if a person has access to health insurance, whether through an employer plan (even as the spouse or child) or a government program such as CHIP or Medicaid or whatever, they are NOT eligible for any subsidy to reduce premium costs on an individual plan - even if thei...

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Falling through the ACA's cracks - one couple's story.

August 26, 2015
Any law has the possibility (probability?) of creating situations that demonstrate the Law of Unintended Consequences.

Unfortunately, to no one's surprise, the Affordable Care Act is no different.
Sometimes the resulting gaps leave agents scratching our heads trying to come up with viable work-arounds.

Let’s look at a situation that cropped up recently for one prospective client and her husband that demonstrates this. It is a perfect example of the Catch-22 created by the collision of two l...

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The Pink Slip Cometh - What to do about health insurance when you lose your job

August 18, 2015
No one is ever ready for the day the pink slip arrives. No one. Ever.

No matter how much the handwriting’s been on the wall. Not even if you hate the #@& job and are actually relieved.

I could write a whole post on how to handle a job loss, but there are many far more qualified than I to talk about that, and there’s certainly a ton of information online.

But one aspect I am uniquely qualified to address is the health insurance one.  And this is one decision I urge you NOT to make too hastily...

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Medicare: An Agent's Story - Part 2. Choosing prescription coverage.

August 5, 2015
Choosing prescription drug coverage (which is separate from what they call "original" Medicare - Parts A and B) was pretty simple for me, since I take two generally inexpensive generics. However, just to be sure, I decided to do my due diligence.

Thankfully, "due diligence" is made simple by the good folks at CMS (Center for Medicare & Medicaid Services), thanks to their Part D plan finder online.

A bit of an aside at this point: You may be wondering why in the world Medicare has all these "pa...

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Medicare: An Agent's Story - Part 1. How this agent chose supplemental coverage.

July 27, 2015
Medicare has been very much on my mind lately - for very (ahem) personal reasons! Not 'personal' as in 'private,' but personal because I'm about to be eligible. (This obviously happened when I wasn't looking and there must be a clerical error because I most certainly KNOW I'm only turning 45, not 65 :-))

I have to say, other than that a-g-e thing, it's been pretty darned painless. I applied for my Parts A and B coverage online through an "Apply for Medicare" link on the Medicare website, and a...

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Annual Enrollment Coming Soon!

November 12, 2014
The time has almost arrived! If your health insurance plan is going away (several carriers in the Carolinas opted not to extend their transitional, if-you-like-your-plans plans for another two years) or if you just don't like your current coverage for any reason - too expensive, not happy with the company, don't like the benefits, whatever -  your opportunity to make a change is coming up starting on November 15th.

You'll have until December 15th to submit an application for a January 1st star...

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The 10 Essential Health Benefits under the ACA

April 23, 2014
In order to meet the requirements of the Affordable Care Act, all individual (also called "private") health insurance plans must offer the same set of ten essential health benefits. These are services all plans must cover.

The essential health benefits include at least the following items and services:
  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency servicesHospitalization (such as surgery)
  • Maternity and newborn care (care before and after your...

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What is a "qualifying life event" and why is it important?

April 22, 2014
When I've explained to people that under the Affordable Care Act there will be ONE annual enrollment period for buying or changing individual health insurance, many think that the rest of the year I'll be sitting with my feet propped up on the desk popping bon-bons.

Uh, no. Even if I were so inclined, that's not gonna happen! I will be busy helping people get health insurance all year round because of a phenomenon known as Life Happens. And when "life happens," it often creates eligibility...

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