Avoid double digit health premium rate increases

Bob Smith

By Bob Smith, North American Health Plans Insurance Advisor

Recent health care legislative attempts in Congress demonstrate that the state of the individual market is facing uncharted waters and health insurance experts foresee rough seas ahead in 2018.

Lost in the debate is the financial impact the uncertainty will have on Independent Contractors and individuals responsible for purchasing health insurance. Based upon income, many 1099 wage earners will not qualify for federal tax credits to lower premiums or subsidies to reduce coinsurance, deductibles and out-of-pocket maximums. Regrettably this unenviable position will cause increasing premiums and financial risk.

Affordable Care Act open enrollment is around the corner and decisions for health plans issued January 1st must be made between November 1 and December 15. Projecting the cost of premiums is a difficult task compounded by the present market instability, which actuaries deplore. What may provide insight and make the upcoming landscape clearer have been news reports of carriers requesting up to 40% increases. There is also the threat of carriers contemplating pulling out of the market diminishing choices. Not unlike what Henry Ford recounted,and I paraphrase: you can have a health plan in any color you want, as long as it’s blue.

But all is not bleak on the horizon. There are viable alternatives to help protect against increasing premiums and reduced health benefits. Of course an option is to not purchase health insurance and maintain a self-funding status. This option is one I do not recommend as it is not a proper risk adverse strategy.

A better alternative is a Fixed Indemnity Health Plan. These plans provide a significantly lower cost option with enhanced care and choice through a national PPO physician/facility network. Fixed Indemnity plans are not subject to limited open enrollment time restrictions and can be selected throughout the year. As the name implies, the plans provide a fixed benefit of your choosing for doctor visits, in-patient hospital care, professional surgical services, out-patient procedures, etc. In essence coverage is not unlike ancillary benefits that reimburse a daily rate (i.e. hospital room of up to $4500/sickness and $6000/injury) and lump sum dollar amount of coverage for services and procedures. Plan premiums are typically 30% to 50% lower than ACA Plans, which in real dollars can mean a family savings of up to $700 monthly.

If your health premium is greater than your mortgage or rent, it may be time to consider another health coverage option. It can make sense, dollars and cents.

Bob is a GABB Affiliate member. Contact him at Bob.Smith4Health@gmail.com