This year in Oregon you may notice that plan options have been extremely limited compared to years past. There is a very large push for individuals to elect the ACA Major Medical plans through the exchange. While these plans are the right fit for many individuals, especially those with pre-existing conditions or the need for coverages not typically covered by alternative products, they are not a one size fits all for everyone.
If you do not qualify for a subsidized medical plan through the Affordable Care Act plans on Healthcare.gov they get very expensive. For example, a young couple both 28 years old with no medical conditions, non-smoking, who both earn $35,000 do not qualify for assistance. Plans start at over $500 per month for the bottom of the barrel bronze level plans. That is over $6,000 for the year not including any medical treatment, which going forward is capped at approximately $16,000 if the treatment is in-network. There oftentimes is no cap if you are out of network (topic for another day). This means that your potential out of pocket costs are roughly $22,000 WITH INSURANCE! That’s 31% of the households combined annual income.
Most young families do not have an additional $22,000 that they can afford to put towards medical costs. As a full-service brokerage, we offer many different plans and try to give consumers a choice in selecting their health plans. They can be summarized into a few of the most popular alternatives to the ACA plans that those who qualify enjoy as another option.
In many states, there are no restrictions or few restrictions that affect the public’s choice in terms of plan options. What we see in the industry is that other states offer multiple choices when it comes to coverage types and leaving consumers without options can potentially lead to unforeseen negative consequences. Here is a brief rundown on the top plan types that are offered as alternatives to the marketplace plans.
Short Term Medical
Short term medical coverages were intended on temporary coverage options for individuals that are in-between plans. Either you have lost your employer coverage, you recently moved, or in general if you needed coverage for a set time throughout the year. Once the ACA was exposed for not adhering to its stated plan of lower-cost options or the ability to keep your doctor people started looking for alternatives and as a response, short term plans were available for the entire year but had some restrictions as far as what they would cover. Mainly pre-existing conditions and pregnancy coverage.
Carriers started offering longer-term plans, or auto-renewing plans that ran back to back keeping you insured and even covering pre-existing conditions that you were diagnosed within the duration of the policy periods. In fact, many states right now offer the ability to keep your short term coverage for 3 years! These typically have a stronger national network that you have access to, have considerably lower rates, and overall grant you more choice when it comes to your healthcare.
Oregon residents, however, do not get that luxury since short term products are limited to 90 days only, no option to renew, no option to re-enroll during the calendar year.
This means if you are in between coverages multiple times in the year (such as job changes) you are out of luck when it comes to temporary coverage beyond your first stint. It also means those dishonest insurance agents that do not disclose this leave the public completely unprotected if they opt for a short term product during open enrollment. Once your 90 days are up, you are uninsured with no ability to sign up for Major Medical. This not only is a terrible situation to be in for healthy individuals but especially those with ongoing medical conditions that they need treatment for.
Limited medical products are intended for supplemental additions to your base health plan. They pay a fixed amount for covered services and allow you to negotiate rates with your providers, or go hand in hand with current coverage to offset the cost of doctor’s visits, labs, treatments, etc. While not an ideal plan for most as a stand-alone plan, it is still an option to keep these plans as a standalone medical coverage that is very inexpensive and gives yet another choice.
With the increasing rates of Major Medical plans, and the decreasing of area networks, many individuals opted for these plans and they became quite popular with healthy individuals that hardly use their coverage in the first place. They liked the idea that there was no deductible to meet and benefits were paid immediately. It gives a sense of value with the plans in that you have negotiating power with the providers and for common day to day tasks were actually quite competitive with the Major Medical plans if you factor in the deductible and out of pocket costs that you are stuck with going in the ACA plans.
The majority of limited medical plans have been restricted in Oregon which may be due to plans being misrepresented in the past and agents not fully disclosing the plan details.
If you haven’t heard of health sharing plans, you haven’t been searching for alternatives. These have become increasingly popular with individuals looking for a less expensive alternative to the ACA. One major factor about these plans is that they do meet the requirements set in place by the ACA and will grant you creditable coverage. Meaning no threats of a tax penalty if you do not jump through the government’s hoops of proving you have medical coverage.
These health sharing plans often have ties with religious affiliations and bypass the laws with a religious exemption loophole. While this may not be everyone’s cup of tea, it at least gives a choice in how you seek coverage. They are not technically “insurance” and as such do not fall under the DOI’s regulations for insurance. However, people still enjoy the coverage as it is far more affordable and often have stronger networks than that of ACA plans.
While nothing has been officially released as far as deregulating plans since they are not insurance, what we have seen is that some providers are being held up and not allowing new members to enroll. (Timing of this is very interesting two weeks before open enrollment)
When it comes down to it, alternatives are being stripped away from Oregonians and individuals are being forced into the ACA if they are wanting coverage for 2020. What are your thoughts? Do you feel as if your choices are being taken away? Would you like to see plan options return to Oregon so that you can make an educated purchase based on the needs of your family?