On October 12th, President Trump signed an Executive Order, forcing changes to be made toward some of the rules of small business health insurance plans, short-term health insurance policies, and cost-sharing reduction payments (aka subsidies). 

 What does the Executive Order mean

• Broader rules for AHP’s (Association Health Plans), allowing small businesses to purchase plans across state lines.  By joining an AHP, small employers within the same line of business could purchase plans collectively. 
• Increase the policy period on short-term plans from 3 months to 12 months with the option to renew.  These plans are not required to follow the rules of the ACA mandate (i.e. they do NOT provide coverage for pre-existing conditions)
• Cost-sharing reduction payments (aka subsidies) will no longer be funded by the government.  Insurers are required by law to offer assistance to low-income individuals.  Customers who are currently receiving assistance through the Marketplace will likely see little change.
• Rates have not been released and likely will not be released until November 1st.  This means renewals will not be available until November 1st. 

How to Avoid Rate Increases:

• Be prepared to discuss your household, estimated adjusted gross income for 2018.  This will be used to determine if you qualify for assistance.
• Those without pre-existing conditions should consider temporary insurance.  The premium is much lower and all plans offer a PPO network.  Wellness visits are not included with these plans.
• If you are going to opt to self-insure, protect yourself with an accident or critical illness plan.  The plan works separate from health insurance and pays you based on a diagnosis of a critical illness (cancer, heart attack, or stroke) and in the event of an accident (slip, fall, and break an ankle) the plan will pay you a certain dollar amount.  The purpose is to use the funds to pay towards the unexpected hospital or urgent care visit.
• Review ALL of your insurance policies.  As a broker I have access to multiple carriers which allows me the opportunity to find the best plan based on your needs.  I’ve saved people thousands by reviewing rates with multiple carriers.  Personal lines insurance (auto, home, life, and health) is my area of expertise!

On May 3, 2017, the House of Representatives passed the American Health Care Act. This will take at least until August before it goes back to the House. Congress must reconcile the two bills before it can go to President Trump for signature.  It is very important to note that if you currently have coverage under Obamacare, as long as you continue to pay your premiums you will still continue to have coverage for all of 2017. Even if the AHCA passes the Senate and the bill is not vetoed by President Trump, nothing changes with your current coverage under Obamacare for 2017.

How does American Health Care Act(Trumpcare) differ from Obamacare? 

1. Elimination of the penalty.

Obamacare required every American to obtain health insurance, or pay a penalty of $695 of 2.5% of your annual income. AHCA would allow people not to purchase health insurance if they choose. There would also be new continuous coverage incentives implemented, so individuals without 12 months of continuous coverage would be assessed a temporary 30 percent premium surcharge. They are hoping to implement this change in time for the 2018 Open Enrollment.

2. Replaces Obamacare premium subsidies with tax credits.

The Obamacare subsidies will be renamed as tax credits and will range from $2,000 to $14,000 based on age — with families receiving higher credits than individuals.

The credits will be reduced for individuals making over $75,000 annually and for families making over $150,000 annually. 

3. Allows states to obtain waivers to change “essential health benefits”.

Obamacare imposed federally established minimum benefits that all health insurance policies had to offer. These “essential health benefits” included mental health and substance-abuse services, prescription drugs, preventive care, maternity care, emergency services and lab services. AHCA will allow states to apply for waivers that allow them to change these minimum benefits for purposes such as reducing healthcare coverage costs and increasing the number of people with healthcare coverage.

4. Allows states to obtain waivers to allow insurers to charge more for pre-existing conditions.  Creating a new high-risk pool.  

Under Obamacare, health insurers are prohibited from charging higher premiums for individuals with pre-existing conditions. AHCA would allow states to obtain waivers to allow insurers to charge more for people with pre-existing conditions. Those enrollees would have to have let their coverage lapse, and the state would have to set up a risk program — such as a high-risk pool — that, in some cases, could provide help to those being charged higher premiums.

5. Allows insurers to charge older adults more than rates charged for younger adults and allow states to request federal waivers to modify market rules such as the limitations on rating based on age.

Obamacare limited insurers to charging older adults a maximum of three times the rates charged to younger adults. AHCA would raise the ratio limit from three to five.  They would like this to take effect as early as 2018.

6. Allows states to implement Medicaid work requirement

AHCA would allow states who choose to do so to require “able-bodied” Medicaid recipients to either work, participate in job-training programs, or help with community service.

7. Repeals Obamacare Consumer Taxes

Obamacare included a laundry list of taxes, such as a tax on some health insurance plans, a tax on certain prescription drugs, a tax on indoor tanning services, a medical device tax, and a capital gains, dividend, and interest income tax for higher-income Americans. AHCA eliminates all of these taxes.

These changes have been approved by the House and have been passed on to the Senate.  It is unknown how long this will take or if it’ll be in force by Open Enrollment.  Carriers have not released any specifics about their 2018 plans or acknowledged if they will be making any changes.

I will continue to send updates as they become available.  If you have any questions about these proposed changes, please feel free to contact me at 708-544-0050 or kelly@kellyburkeinsurance.com