In 2020 there is no longer a penalty for not having health insurance that is compliant with the Affordable Care Act.
In 2020 there is no longer a penalty for not having health insurance that is compliant with the Affordable Care Act.
Unless someone turning 65 has lifetime health benefits from their or their spouse’s employment, they usually have two choices on how to receive their Medicare coverage. They can enroll in a Medicare Supplement and a separate prescription drug plan or in a Medicare Advantage Plan with drug coverage. If they have drug coverage from previous employment or military service, they also have the option to enroll in only a Medicare Supplement or a Medicare Advantage with no drug coverage.
Typically the premiums for a Medicare Advantage Plan are much lower than a Medicare Supplement. In the Research Triangle area (Raleigh, Durham and Chapel Hill) there are numerous Medicare Advantage Plans that have a zero premium. My experience is that the majority of seniors who sign up for these plans are very satisfied with the benefits and coverage. However, as we all know, life is unpredictable. When your health suddenly takes a turn for the worse having a plan that requires you stay in a network of medical providers or allows you to go out of network, but at a substantially higher cost, can create anxiety. This is why understanding the rules for change are important.
When you first turn 65 you have what is called a “trial right”. This term means you can try Medicare Advantage for one year. At any point during this 12 month period you can drop your Medicare Advantage Plan and return to Original Medicare. Once you drop your Medicare Advantage plan, you have 63 days to enroll in a Medicare Supplement without going through medical underwriting (answering health questions). If you wait longer the insurance companies that market Medicare Supplements will require medical underwriting and can decline you for coverage. You also have 63 days to enroll in a drug plan. If you don’t enroll during the 63 day period you will be required to wait until Annual Enrollment (October 15 through December 7th). The plan you enroll in during this period will not begin until January 1st of the following year. Unless you have a very low income, this will cause you to pay a penalty for going without creditable drug coverage for several months. This penalty will continue as long as you are enrolled in a prescription drug plan.
For folks that are already on a Medicare Supplement there is also a “trial right”. This allows them to drop their Medicare Supplement and try a Medicare Advantage for one year. However, their “trial right” is more restrictive. They can enroll in Medicare Supplement Plans A,B,C,F,K or L without medical underwriting, but the not the popular Plan G.
In 2019 during the Open Enrollment Period, which is from January 1 through March 31, one can change from a Medicare Advantage to a Medicare Supplement and a drug plan. However, unless they are in their first year of Medicare or are enrolled in a plan which is ending, they will be required to go through medical underwriting to obtain a Medicare Supplement.
Sometimes an insurance company will decide to terminate one of their Medicare Advantage plans. This is called a SAR (Service Area Reduction). When this happens they are required to send a letter to each person on this plan. In addition to explaining when the plan will end, the insurance company must provide details on the time period for obtaining new coverage and one’s options during this period. Instead of choosing another Medicare Advantage plan, the policy holders of the terminated plan can choose a Medicare Supplement. This letter is their proof that they are in a “guaranteed issue period”, which allows them to enroll in Medicare Supplement Plans A, B, C, F,K or L without going through medical underwriting.
There are also situations where CMS (Centers for Medicare & Medicaid Services) forces a Medicare Advantage Plan to terminate for not adhering to government rules. This type of termination gives the policy holders the same “guaranteed issue rights” described above.
If you (or your spouse) lose or quit your job with health insurance when you are eligible for Medicare it is unlikely COBRA (Consolidated Omnibus Budget Reconciliation Act) will be your best choice for health insurance. Medicare does not recognize COBRA as creditable coverage as they do group health insurance. Medicare eligible individuals have 8 months to sign up for Medicare Part B once they lose their group health insurance. However, if one chooses COBRA instead and stays on it 18 months, they will be required to enroll in Part B between January 1st and March 31st. To make matters worse their Part B coverage will not begin until July 1st. Since you are not allowed to buy a Medicare Supplement or Advantage Plan without Part B, it means they will go several months with only Part A (hospital) coverage. Read More
Unlike large employer group plans, employees on small group plans (fewer than 20) are required to enroll in Medicare Part B when they turn 65. Part B helps cover the cost of doctor visits, outpatient care, some preventative services, home health care and durable medical equipment. Once you enroll in Part B you have 6 months to purchase a Medicare Supplement without going through medical underwriting (being required to answer medical questions). If you have concerns about being declined or charged a higher premium due to your health status you should purchase your own plan before the end of this six month window.
As I pointed out in my ObamaCare video, we are constantly bombarded with misinformation about the Affordable Care Act(ACA) or ObamaCare. Here are five more examples of these fallacies:
fallacy #1: “All health insurance must be purchased from the Marketplace. Read More
As they say, “knowledge is power”. The information below will help you become a savvy health insurance shopper and find the best policy or policies for you and your family:
Explore your options with an agent who represents several health insurance companies and can help you make comparisons. There is no charge for this service and it can save you a lot of time and aggravation. Once you have educated your agent on your budget, expectations, doctors and preferred hospitals, he/she can advise you on the policies and insurance companies that would best fit your needs. For quotes from several top insurance companies or additional information, Click Here.
Don’t wait until the last minute to apply for insurance. This is probably the best way to make sure you get the best possible deal. With the passage of the Affordable Care Act you may quality for government help paying for your health insurance policy. Unless you have a qualifying life event (i.e. losing your health insurance due a job loss, moving to a new area, divorce or birth of a child) that gives you a 60 day period to purchase health insurance, you can only enroll in ACA compliant health insurance during Open Enrollment (from November 1st until December 15th). If you apply during Open Enrollment your policy is effective January 1st.
Understand the following 4 insurance terms and use them to evaluate your choices:
Deductible – Dollar amount of medical expenses you pay before your insurance covers you.Coinsurance – After the deductible this is the percentage the insurance company must pay. For example, if your plan is an 80/20 this means the insurance company must pay 80% and you must pay 20%. It is important to purchase a plan that has a limit on the dollar amount you are required to pay.
Co-payments – Fixed dollar amount you pay for a doctor visit, emergency room visit or a prescription drug.
Maximum out of pocket – This includes every dollar you pay for prescription drug, co-pays and deductibles using your insurance card. Once you reach your maximum your insurance company must cover all your medical expenses the rest of the year. The maximum out of pocket resets itself every January 1st.
Make sure you understand how your policy covers prescription drugs. This means you must understand the deductibles, co-pays and yearly maximums.
If you have children who are 18 or younger and your income for the past year is low, your children may qualify for reduced or free government sponsored health insurance. For additional information contact the NC Division of Medical Assistance at 800-367-2229 or www.nchealthystart.org.
North Carolina State law requires university students to have health insurance. If your children are college students contact their Student Health Services and request information on their student health insurance plans. Compare the cost of their university plans to your cost of adding them to your policy.
Consider purchasing an IRS-Qualified High Deductible Health Plan (HDHP).
Purchasing one of these policies can reduce your monthly premium by 50% or more. This is a perfect solution for healthy people who rarely go to the doctor. These HDHP’s can be paired with a Health Savings Account (HSA) that offers additional savings by reducing your taxable income. Unlike the traditional health insurance plans, the policy holder pays for all medical expenses until he reaches his deductible. Like traditional plans, HDHP’s have a wide range of deductibles, coinsurance options and benefits. .
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) allows workers and their dependents to purchase group coverage for 18 months (or sometimes longer) when the worker is voluntarily or involuntarily terminated. Workers who elect this coverage can pay up to 102% of the premium that the employer pays for coverage. The employer has 44 days to notify the terminated employee of his or her COBRA rights and the employee has 60 days to respond. To avoid COBRA confusion individuals should be aware of the following key points:
If you’re one of those folks who accepted the COBRA offer from your employer thinking you would quickly get another job that never materialized there is a new Special Election Period (SEP) to help you. Perhaps you were offered a going away package that included your former employer paying all or most of your COBRA medical plan for several months. If the payment ended before you got another job it is unlikely that COBRA is affordable to you as an unemployed person. Since your former employer is no longer helping you pay for your health insurance you might need help from another source. To eliminate this burden CMS(Centers of Medicaid and Medicare) recently announced that you have until July 1, 2014 to apply for a health insurance plan through the Marketplace with a government subsidy.
Unlike most people I enjoy going to the dentist. As a child I had a dentist who knew how to entertain his patients while performing dental procedures that were usually painless. When my dentist retired his son took over the practice and continued the family tradition of making the patients feel at ease. It’s good that I have always had access to exceptional dental care since I was not blessed with good teeth. My numerous childhood fillings resulted in a lot of crowns and root canals as an adult.
Fortunately my personal experience has helped me understand the important features of good dental plan and how to assist my clients in evaluating these plans. Here is my advice for buying dental insurance: