How Things Go From Bad To Worse If Trumpcare Passes
One major problem neither side of the aisle is talking about is the lack of insurance carriers willing to stay in the exchanges. Aetna, United Healthcare, Humana and Anthem, have all announced exits from the ACA, either entirely, or almost entirely. Anthem, the latest to announce, is exiting 18 major counties in Ohio. This was an ominous announcement, in part because Anthem was very direct and transparent about their reason for doing so. Their decision centers around how it seems that politics are taking priority over people, and the governments contractual agreements.
Despite the majority of Americans supporting Obamacare, the ACA, or Trumpcare for that matter, it will in fact fail Americans if insurance carriers aren’t willing to offer coverage under the law. Time is literally running out for insurance carriers to “stay on or get off” this healthcare reform highway, as they have to submit plans for 2018 by late June.
This is compounded by the fact that in March of this year, a regulation brought forward by the previous administration, limits the amount of time a consumer can have a “short term health plan”. Short term health insurance has become an increasingly popular alternative to Obamacare plans, especially within the last 18 months as premium prices have risen dramatically in certain states.
Short term plans are not a fit for all consumers, especially those with serious health issues, or anyone planning to have a child. Short term plans can deny an applicant coverage for pre-existing conditions and the level of coverage benefits is approximately the same as catastrophic coverage. That said, if you’re relatively healthy, short term health insurance can be a great option as plans typically cost about 30% of what an ACA plan does.
Most American’s health plans require them to pay out-of-pocket for doctors visits and urgent care services and other general expenses, just like with short term plans. Short term health plans are in fact widely available, but like with anything else, the devil is in the details, and with short term health plans, you really do need to pay attention to the fine print. Short term coverage, or “term plans” as they are sometimes called, are less regulated than ACA plans. This results in there being a number of plans offered by some less than ethical companies, who often have no issue ignoring laws, regulations and moral guidelines.
According to this new regulation, short term plan coverage is capped at 3 months, which means that at the end of 3 months, that consumers short term plan ends. Brokers and carriers are required to determine if in fact a consumer previously had a short term plan at any point during the previous 12 months. This places larger, well established companies offering “short term health insurance” in a very difficult position. While they abide by the rules and regulations required of them according to HHS, others on the fringes of the industry will not.
What does this mean for Americans? It means that if there are a number of states where there are no plans, or limited plan choices or only cost prohibitive plans, consumers will very likely be forced to purchase a short term health insurance plan. This could result in Americans having to work with brokers who don’t operate in a 100% above-board manner.
Unfortunately, like in almost every other industry, the health insurance space has no shortage of scammers and con artists. Continuing to restrict short term health insurance plans to a 3-month coverage max will only increase the probability that consumers end up having to purchase coverage through one of these “shady” companies. Boiler room call centers, overstated claims on coverage benefits, pushy sales people and a generally horrendous claims process, are just some of the things Americans, who have to rely on short term health coverage, can look forward to if they don’t enroll with an ethical and transparent company.
(Continued From Trumpcare.com Homepage)
You may be wondering whether it is possible for insurance carriers to jump right back into the market after Trumpcare is passed. Unfortunately, it is highly unlikely, meaning it is almost impossible for insurance carriers to immediately offer plans the day after healthcare reform is passed and this is simply because insurance carriers need months of time to calculate and project their plan requirements in order to ensure that they comply with the new requirements of the law and can cover all of the claims. In the health insurance world, nobody just wings it, even for this administration.
How This Could Get Even Worse
First, keep in mind that according to what has been outlined in the AHCA, the open enrollment period is going to go from being approximately ninety-days (3 months) to just forty-five days (1.5 months). We are heading into what could very well be the most politicized and chaotic health insurance season in history. More carriers are pulling out of the ACA, and that means there will be millions of Americans getting cancelation notices starting in October. If this 3-month maximum on short term health insurance plans isn’t reversed for this next open enrollment period in particular, it could be even more of a disaster if parts of Trumpcare remain intact. Specifically, there is a provision that says that if someone is without coverage for more than 63 days, they have to pay an increased premium – 30% more a month for a full calendar year – for not having coverage when they do eventually enroll. It doesn’t matter what insurance plan it is or what carrier it is offered by, they will be allowed to charge Americans 30% more for any plan, because they were previously uninsured for more than 63 days.
Here’s a real life scenario of how things go from bad to worse under Trumpcare.
Meet Jim, he’s 35, single, healthy and he needs cheaper health insurance coverage. Jim has an Obamacare plan with Humana that will no longer be available when it is up for renewal in December of 2017. Jim unfortunately lives in a county where there are no major medical plans under the ACA available. Jim has no choice but to go with a short term health insurance plan.
So, Jim signs up for a short term health insurance plan during open enrollment. He tried to sign up with a major insurance carrier direct, but when he was told that he could only have that policy for 3 months, he called around to find another plan where that wouldn’t be the case.
Jim ends up connecting with an unknown insurance agent he finds though a SPAM email he got about Trumpcare. “Vinny in Miami” sells him a short term plan along with a few supplemental products and assures him that he will just renew his policy regardless of the 3 months limit.
Best case scenario is that Vinny enrolled Jim in a plan that he represented accurately and didn’t over-promise on what the plan actually offers. Worst case scenario is that Vinny runs a boiler room call center scamming Americans and they mail out some junk insurance discount card that isn’t offering coverage at all. We wish the latter were just hyperbole, but we can assure you it is not.
In past years this exact scenario happened to tens of thousands of American families. Insurance products like short term health, which are not strictly regulated like major medical or Medicare products, always have a larger number of shady companies selling them. There are good companies to work with out there and there are bad ones, like anything.
Another scenario for Jim is that he goes without insurance until 2019. Let’s assume he continues to be healthy and doesn’t have any kind of medical emergency. In 2019, a couple insurance carriers may offer coverage in his area again and he has more choices. He may find a major medical plan that he likes and while it doesn’t cover everything that his Obamacare plan did, he thinks it is fine for his needs. Most importantly though it is about 25% less than his Obamacare plan. Well, because he went for all of 2018 without coverage, he’s going to have to pay 30% more for that plan for the first year of coverage. One step forward, two steps back.
Obama Administration – Good Intentions With Unintended Consequences
Right now, the path we are said to be on with Trumpcare and this HHS imposed 3-month limit on short term health plans, very well could be forcing more than 15 million Americans to have no other choice but to roll the dice with some very unethical companies. We keep our ear to the ground and we pay very close attention to what everyone in the health insurance industry is doing, even the unethical companies we loathe that harm Americans. Within the last few months we have received dozens of unsolicited calls and emails from shady call centers promoting “Trumpcare Plans” and keep in mind that the law has not even passed the Senate yet.
Unfortunately, this is only the start of this sort of thing. Every shady company in healthcare is salivating at the financial opportunity that the inevitable confusion that always comes along with healthcare reform, is offering them. Confused and desperate consumers are always the favorite targets of these unethical companies. While we do reach a very large audience in the U.S., and while we are unapologetically honest and transparent, and as a result, often referred by Americans to their friends and family, we don’t reach everyone.
We have serious concern that the perfect storm of politics, confusion and greed is headed towards Americans desperate for a realistic and practical version of healthcare reform.
Our hope is that President Trump and HHS unwind this regulation that was set in place by the previous administration, as quickly as possible. Its very reason for existence won’t even be applicable any longer if Obamacare is repealed and replaced. Keeping the 3-month limit in place on short term health plans will only reward unethical companies and harm American families.
Our advice, is to let your state representative know that you’re concerned about the 3 month limit on short term health insurance plans and how that might impact you if your needs require one. In this next open-enrollment period there are already going to be plenty of challenges facing American families, this is one that doesn’t need to remain in place.