Are you wondering what changes the Affordable Care Act (Obama Care) has in store for 2014 Medicare Supplement Insurance? Most consumers are confused about what changes they should expect from this type of insurance coverage. Some commonly asked questions are: Will they still ask health questions on the application? Will the 2014 Medicare Supplement Insurance be subject to the health insurance tax of 8 billion in 2014?
This week I am in Las Vegas, Nevada for an International Health Insurance convention. Why I was here I heard several people talking about the Affordable Care Act, Nevada Medigap Plans and other health insurance alternatives. Since the large portion of Obamacare is coming very soon I figure I would discuss how Nevada Medigap Plans will be affected by the Affordable Care Act.
Nevada Medigap Plans
In summary, Nevada Medigap Plans are supplemental insurance coverage for Medicare Parts A & B. There are 10 different plans labeled by letters A through N. Each one covers different portions of your out of pocket expenses but the Plan F is the most popular plan. The Plan G is the most cost effective of the Nevada Medigap Plans.
It is very important to compare the rates because plans are standardized and the different companies must offer the same benefits. Some companies may ask different health questions but the plan designs are federally regulated. Compare Medicare Supplement Quotes through our Medicare Quote Engine.
Nevada Medigap Plans – Affordable Care Act
In general Medigap plans will not be affected greatly by the new healthcare laws. However, we have put a few items below that will address concerns from different Nevada residents:
- Health questions will still be asked for Medicare Supplement Plans. These are supplemental policies and the “No Health Questions” applies to primary insurance not secondary insurance.
- There will be no subsidies given for Medigap Plans.
- You are not required to enroll in these plans or a Medicare Advantage Plan.
- There are laws that are trying to eliminate the Plan F Medicare Supplement. However, these new bills will probably be shot down since over 5 million people have a plan F Medicare Supplement.
To learn more about other facts regarding Nevada Medigap Plans call 1-800-800-1397 option 6.
Today I was notified of recent reports of Medigap Changes that are trying to get pushed through with the Affordable Care Act (OBAMA-CARE). The major change that is trying to get pushed through is “add cost-sharing to Medigap plans.” We have mentioned this in several other articles but will re-describe what new changes have risen.
The reason the Medigap changes are being discussed for policies like the “Medigap Plan F” is because there is no cost sharing on these plans. Many believe this causes over utilization by beneficiaries; however they do not consider the unintended impacts this has on beneficiaries.
Medigap Changes – Cost Sharing Implementation
This has not been passed yet but below are some of the effects this could have on Medicare beneficiaries.
- This is believed to cause a Medicare Beneficiary to avoid going to the hospital/doctors office for care. Which could possibly worsen their health in the long haul.
- Medigap Plan F premiums would shoot through the roof if this cost sharing was eliminated on new plans. Why? That is because there would be no new beneficiaries coming onto the plan so the only people left on these plans would be individuals with health issues that could not change.
Is there anything else being discussed as possible changes for Medigap policies?
- Benefit redesigns that would redistribute cost burdens (This already happened with the Medicare Modernization Act of 2010)
- Prohibiting or taxing Medigap “First Dollar Coverage” (mentioned above)
- Raising Medicare age
- Other things as well that are a little too complicated to review in a short article.
We recommend choosing a Plan G Medicare Supplement which can avoid possible Medigap Changes. This plan will also prevent higher rate increases which can come from Guaranteed Issue supplemental plans. You should call 1-877-936-2991 today to get a cost comparison completed of the Plan F and Plan G policies.
Most everybody across the country knows that the Affordable Care Act (PPACA), commonly referred to as Obamacare was passed in 2010. There was debate that went to the Supreme Court over whether the law was legal. The Supreme Court ruled that the United States government is basically imposing a tax not a “penalty” so it was declared lawful. Many people referred to this as a health insurance tax and not a health insurance program. It turns out that they may have been more accurate than we thought.
Starting in 2014, there will be a health insurance tax that is imposed on the fully insured market (Self-Funded Plans are Exempt). Currently most groups are on a fully insured plan and probably 90% of companies across the United States with under 50 employees are self-insured. Now that people have had time to read the bill, this health insurance tax will greatly hinder small business production.
2014 Health Insurance Tax
How much is this health insurance tax that takes place in 2014?
- PPACA will assess each health insurance company based on their “net premiums written” to know how much the tax will be to each insurance company.
- The insurance companies will pass this along to the business on a fully insured group plan or individual plan.
- The average family should see an increase of roughly $500 a year.
- The insurer fee in 2014 will be 8 billion dollars.
- The health insurance tax increases to 14.3 billion in 2018
Basically this law just created a lot of extra taxes on our health insurance that will ultimately make our premiums increases. The loss ratios haven’t even started for these plans and we know just on this one portion that there is an extra 8 billion dollars in expenses. Now throw in No Insured Maximums, No Health Questions, and 1,400 pages of new laws to comply with and you get yourself a nice little rate increase.
What does this tax pay for and what products are affected?
This tax is built to pay for the subsidies of individuals between 100% and 400% of poverty level. Which some people may benefit greatly from this tax because they will receive their insurance at a much lower premium.
Products affected by this tax will include group health plans, individual plans, Medicare Advantage Plans and supposedly Part D plans. In the law Medicare Supplement Insurance is exempt from this tax. Medigap plans are also not under the same guidelines of no health questions.
MWG SENIOR SERVICES – 800-800-1397 option 6
We all heard during the elections how President Obama and Presidential hopeful Mitt Romney argued about the Medicare Advantage cuts from the Affordable Care Act. Mitt Romney sited that there was over 700 billion in MA cuts, while President Obama argued that this was absurd. Well the truth came out this week when Medicare Advantage cuts appeared larger than anticipated.
Medicare Advantage Cuts
The last week of February, the Centers for Medicare and Medicaid Services announced a further cut of 2.3% in Medicare Advantage Payments in 2014. This sent the Medicare Advantage Plans into an uproar stating that they were already getting close to a 5% cuts to their plan and adding this 2.3% would put them right at 7% cut.
The insurance companies were not the only ones who noticed these cuts. Companies that are publicly traded and offered MA Plans all took a hit. Some companies like Humana and United Healthcare took large hits (roughly 8%).
What do these Medicare Advantage cuts mean?
To a consumer these Medicare Advantage cuts mean either a loss of benefits, higher premiums or both. AHIP recently released a statement that members will probably get some unpleasant surprises in 2014 plan year. Some of the possible changes could be premium increases from $50-$90 per month or cut in benefits.
If premiums increase and benefit are cut we are expecting Medicare Supplement plans to increase enrollments. These plans supplement Original Medicare and pick up the deductibles, coinsurance, and co-pays that accompany covered Medicare services. Medicare Supplements normally have higher premiums than Medicare Advantage Plans, but they do provide much more extensive coverage.
These Medigap plans also do not limit providers available, but MA plans do limit their members to specific networks which is the major issue with people who have enrolled in a MA Plan. Basically these MA cuts will stir up some change in the Medicare market towards the end of 2013 (Annual Election Period) so people have a chance to change prior to the 2014 plan year.