10 Life Situations When Short Term Health Insurance is an Excellent Option for Consumers

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Short Term Medical with Capital Benefits Group

These alternative plans could help over 8 million consumers keep insurance during times of transition.

SCOTTSDALE, Ariz.April 5, 2018 /PRNewswire/ — Pivot Health, a leading provider and manager of specialty health insurance products, defined 10 ways short term health plans can benefit consumers who would otherwise be uninsured or lack sufficient coverage due to changes in their life situation. 

“An Affordable Care Act (ACA) plan is a fine solution for individuals and families who qualify for financial subsidies to lower their health insurance costs. But for the 8 million Americans who don’t qualify for an ACA plan subsidy and for those in a variety of life events, they should know there are other affordable options,” said Jeff Smedsrud, Chief Executive Officer of Pivot Health. “When life throws a curve ball, short term health plans can be a low-cost insurance solution while covering doctor office visits, hospitalization and more. It is a niche, temporary solution, but a large overall market.”

Smedsrud compiled a list of 10 life situations when short term health insurance could make the most sense for a health care consumer:

  1. Joining the “gig” economy – At the end of 2016, the percentage of new entrepreneurs starting their own companies was 7.4 percent – the highest it has been in four years. A recent study credited a rebounding economy, easy-to-obtain credit and hopes for an Obamacare repeal and tax reform under the Trump administration as reasons for the surge. For new business owners or solo-preneurs, being able to obtain immediate and affordable health insurance coverage is a key component to their personal success. Short term medical insurance can start in just 24-hours and costs about 50% less than traditional health insurance. 
  2. Stuck in employer waiting period – The unemployment rate across the nation is at an all-time low due to recent economic upturn. With a robust economy, workers can jump from job to job to ultimately land their ideal career. Yet many times employers have a 90-day waiting period before health insurance benefits begin. A temporary short term health plan helps bridge the gap for workers who are between jobs or stuck in a new employee waiting period.
  3. Moving to new state – In 2016, about 7.5 million Americans moved to a new state. When an individual with an ACA plan moves, their insurance certificate is no longer valid in their new state of residence. They can certainly enroll in another ACA plan once they have settled in their new home, but time and paperwork can delay coverage. In addition, the deductible starts over which is a big disadvantage to those who move late in the year. Short term medical with a lower deductible can serve as a temporary solution to provide immediate coverage for an unexpected illness or accident that occurs.
  4. College Students.   Students are allowed to stay on their parent’s health insurance plan until the age of 26.  But not all insurance companies will cover students attending college out-of-state. It could also be less expensive to remove a student from a parent’s policy and enroll in a short term health plan, a quick and easy solution for the months a student is away at school.
  5. Aging off parents insurance plan – The ACA allowed parents to keep their adult children on their family plan until the age of 26. Children who do not have access to employer coverage or need a more affordable option can benefit from low-cost short term health insurance. This is especially important for those who age off of their parent’s plan later in the year. A short term plan can be an excellent bridge of coverage to January 1.
  6. Early retirees –  When examining a larger demographic of 50-64-year old women, Pivot Health sales data shows this group completed the most applications on its website in 2017 when looking at gender-specific data. Early retirees who do not yet qualify for Medicare but have too much household income to qualify for an Obamacare subsidy, can find a new option through short term medical that is friendly to budget-conscious, not-quite-yet-senior-citizens who are retiring early. Pivot Health estimates that nearly one million pre-retirees may be best served by – but should at least consider – a short term medical plan. 
  7. Freedom from doctor network – In 2017 1.9 million individuals who enrolled in an ACA plan only had one insurance carrier to choose from, often with restricted provider networks. This limits health care choice, especially in rural communities where provider resources are thin. Short term health plans marketed by Pivot Health have no doctor network. All providers are accepted, giving policyholders the ability to see any physician or facility without the worry of staying in-network.
  8. Divorce – More than 825,000 individuals divorced in 2017. In almost every case, one of the two partners needs to adjust their health insurance coverage, even temporarily. Women are at a greater risk of losing their insurance. A government study indicates that approximately 115,000 women lose their health insurance in the months following divorce. A short term health insurance plan can be purchased for a minimum of 30 days or for multiple months, depending on how long someone going through a divorce needs to get back on their feet.
  9. Too rich for Medicaid, too poor for subsidies – Across the U.S., 2.4 million people don’t make enough to qualify for a tax credit to purchase health insurance on the ACA exchange, yet make too much money to qualify for Medicaid benefits. This group of “coverage gap” individuals could benefit from low-cost short term insurance.
  10. COBRA – The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides individuals who lose their job the ability to keep their health insurance for up to 18 months. The Bureau of Labor Statistics reports approximately 36 million Americans changed jobs in 2017. They might have the option to enroll in a COBRA plan, but the cost is far from economical. When an individual enrolls in COBRA, they must pay the entire insurance premium plus a 2 percent administrative fee. Many would be better off purchasing a short term health plan and saving their extra dollars while they job hunt. Additionally, those who had been employed by firms with less than 20 employees are not eligible for COBRA. 

Today short term medical plans are restricted to 90-days of coverage. However, a proposal to overturn the 90-day limitation was recently issued by the Trump administration. The Department of Health and Human Services (HHS) is accepting comments about the proposal through the end of April 2018. It is expected HHS will reverse the rule at the end of 2018, allowing short term health insurance plans to have a coverage duration of up to 364 days. Short term plans generally do not cover pre-existing conditions, can deny coverage to individuals with chronic health conditions, have leaner benefits than ACA plans and are not considered qualified health benefits for purposes of premium subsidies based on income.

“Truth is, the short term medical insurance market is much bigger than experts estimate and helps millions get coverage and keep from being uninsured,” said Smedsrud. “It is not for everyone nor should it be considered a permanent plan. But there are millions who need temporary coverage because there are lots of curveballs in this turbulent time. Our plans provide easy enrollment, next day coverage, access to all medical providers, the ability to tailor plans to meet current needs, offer monthly pricing to meet many budgets, plus prescription drug benefits.”

About Capital Benefits Group
Capital Benefits Group is an insurance management, and benefits distributor company led by an experienced team of health insurance professionals.The company has proprietary products and dedicated relationships with several national carriers. Capital Benefits Group is excited to promote and distribute Pivot Health benefits. Pivot Health has led previous firms that were acquired by NYSE listed companies and recently announced it was acquired by HealthCare.com (www.healthcare.com), a privately-owned search-and-compare health insurance shopping platform. For more information, visit www.capital-benefits.com or email info@capital-benefits.com. 

Trump proposal boosts skimpy insurance plans, again undercutting Obamacare

The Trump administration is proposing to expand the availability of short-term health insurance plans that some deride as “junk insurance” — an effort that could give consumers cheaper coverage options but undermine Obamacare’s marketplaces and popular protections for pre-existing medical conditions.

Proposed rules issued this morning follow an executive order from President Donald Trump this fall seeking to expand access to more affordable health insurance alternatives to comprehensive, but pricey Obamacare plans. The HHS proposal, released weeks after the Trump administration issued a rule encouraging small businesses to find coverage outside the Affordable Care Act marketplaces, represents the administration’s latest effort to unwind the health care law with repeal efforts stalled in Congress.

“We need to be opening up more affordable alternatives,” Health and Human Services Secretary Alex Azar said on a call with reporters today. “Today’s action represents an important promise kept by the president.”

But many health care experts fear expanding the availability of the health plans, which are exempt from Obamacare’s robust consumer protections, could further destabilize the law’s wobbly insurance markets. Critics say the plans offer just the illusion of coverage, and enrollees often don’t realize how limited their benefits are until it’s too late.

Short-term plans maintain cheaper prices than traditional insurance by refusing coverage for pre-existing conditions, in some cases, and some medical services. Unlike Obamacare coverage, the short-term plans typically cap payouts, which could leave enrollees with catastrophic illnesses or injuries on the hook for huge medical bills.

“The way that you get to lower premiums is to reduce benefits,” said Kevin Lucia, a professor at Georgetown University’s Center on Health Insurance Reforms. “It’s a quick fix, but ultimately those products don’t help consumers who need them.”

The new rules are a reversal of the Obama administration’s efforts to limit short-term plans. It reduced the plans’ maximum length from one year to three months, hoping to steer more people into comprehensive Obamacare coverage.

The new proposal from Trump’s health, labor and treasury departments would restore the 12-month limit on short-term plans. The administration projects that between 100,000 and 200,000 individuals now in Obamacare plans would instead opt for short-term plans in 2019.

“You’ll get such low prices for such great care,” Trump said at the signing of his October executive order on health care. “It should have been done a long time ago.”

Supporters of short-term plans say they are an affordable insurance option for people who don’t want robust coverage and have been priced out of the individual market — especially middle-income customers who don’t qualify for Obamacare’s insurance subsidies. The Trump administration on Tuesday pointed out that the number of individuals purchasing plans without subsidies fell by 2 million, or nearly 25 percent, between 2016 and 2017, and one in four customers had access to just a single insurer selling coverage this year.

“Basically what they’re doing is giving people options who are already trying to jump off the ship,” said Edmund Haislmaier, a health policy analyst at the conservative Heritage Foundation.

UnitedHealthcare, which withdrew from the Obamacare marketplaces after mounting financial losses, was “excited” by Trump’s health care executive order, chief financial officer Dan Schumacher said on an investor call in October. He cited the company’s history of selling short-term plans and touted it as an attractive option for people “in between coverage.”

The Trump administration last month also proposed expanding the availability of association health plans, in which small businesses and self-employed individuals band together to purchase coverage. The association plans are exempt from some Obamacare rules, such as the requirement to cover a set of 10 health benefits the law deemed “essential,” including prescription drugs and emergency care.

Trump’s insurance proposals come shortly after the GOP tax overhaul scrapped Obamacare’s individual mandate starting in 2019. The administration is also taking steps to expand exemptions to coverage requirement while it’s still in effect this year.

 Taken together, the administration’s moves are expected to weaken the law’s insurance marketplaces since individuals with few medical needs are likely to gravitate to the cheaper coverage. That would leave a disproportionately sicker, more expensive population in the Obamacare plans, further driving up already-rising premiums. Most low-income Obamacare customers would be protected from the resulting premium increases thanks to the law’s hefty insurance subsidies, meaning the marketplaces likely can still survive.“There won’t be a death spiral, but the people who really lose in that scenario are basically middle class people who are sick,” said Michael Miller, policy director of consumer advocacy group Community Catalyst.

States supportive of Obamacare are likely to take steps to curb the proliferation of short-term and association plans. In California, for example, state lawmakers this year have already offered legislation that would prohibit the sale of short-term plans.

The proposed rule will be open for comments until April 23.

Rachana Pradhan contributed to this report.

Bust The Myths About Children’s Dental Care

InsuranceNewsNet

While the general public acknowledges the importance of oral health, many Americans are still not connecting dental health to overall health or its value in lowering health care costs. The effect could be a reduction in children’s dental health.

Insurance agents and brokers can help do something about it, however, simply by working to boost group clients’ dental plan enrollment.

According to an American Dental Association (ADA) study, 95 percent of respondents agreed regular dental appointments are essential to their health, yet only 37 percent reported actually visiting a dentist within the last year.

The lack of urgency around preventive dental care trickles down to children, and is further fueled by misconceptions about pediatric dental care.

However, health benefit advisors can help close the dental wellness gap by distributing small bits of dental communication throughout the year leading up to enrollment.

A great time to start busting these misconceptions is during Children’s Dental Health Month in February.

The reality of children’s dental health

Kids with private dental coverage typically receive dental care earlier than those with public or no coverage. But it appears not to be early enough.

More than half of children ages two to four years old – regardless of household income level – are less likely to have seen a dentist compared to older children. The American Academy of Pediatric Dentistry recommends regular dental appointments after the first erupted tooth or by age one. Yet many parents wait until their children are much older to schedule their first dental visit.

Some parents are unaware of the common oral problems in toddlers and young children that, when ignored, can lead to major dental procedures. Some oral problems can follow kids as they grow and potentially result in even higher dental costs later.

Pediatric Dentistry’s 2015 clinical article, “Cost-Benefit Analysis of the Age One Dental Visit for the Privately Insured,” the annual cost for children who receive dental care by age one is significantly less compared to children whose regular dental care is delayed until they are older.

Children’s Dental Health Month tries to raise public awareness about the reality of children’s dental health while dispelling pediatric dental myths, such as toddlers do not need regular dental exams or only sugary foods cause cavities. The ADA produces lots of great content on the importance of family dental health, including how to care for children’s teeth and start great dental habits early.

Health benefit professionals can incorporate this content into their regular client communications for a powerful enrollment message and call to action to use preventive benefits, especially for young children.

Reiterate the dental message

The “Global Employee Benefits Watch 2016/2017 Report” found that employees are more likely to engage with relevant communication distributed over a period of time, using multiple channels. The right message for children’s oral health can be easy to find.

As one of the sponsors for Children’s Dental Health Month, the ADA provides multiple resources on its website from posters to news articles about pediatric dental health. Also, dental carriers can be a wonderful source of employee communication, including highly effective visual communication.

Brokers can amplify the wellness message by encouraging their group clients to use short and concise communications from these resources. The dental message should be repeated and distributed through multiple channels, as employees have different preferences for receiving news and benefits communication.

The goal is to motivate the audience to adapt proactive health behaviors while tying back to dental benefits.

All the necessary tools to become an advocate of pediatric oral health are already available through the ADA’s public awareness campaign. Brokers just have to share the message.

As a trusted health benefits advisor, your insights and guidance about children’s dental health will provide a better understanding of general dental health and reinforce the advantages of dental benefits. In turn, this approach will strengthen your client relationships as you offer your expertise and empathy for the wellbeing of employees and their families, and it may even increase dental plan participation during your next open enrollment.

Amy Marko is the senior vice president of dental and vision products and professional relations for Starmount, Unum Group’s dental and vision center of expertise. Amy may be contacted at amy.marko@innfeedback.com.

Insurance Agents Provide the Most Important Work Benefits

Health Care Seen as Most Important Work Benefit

Health insurance remains the most important benefit to workers, according to an Employee Benefit Research Institute study, with 87 percent calling it important or very important to them–more than the 77 percent responding similarly regarding their retirement savings plan and the 72 percent for vision and dental care.

“Workers overwhelmingly consider health insurance to be the most important workplace benefit when considering whether to stay in a current job or choose a new job,” it said in a report on the latest version of a poll taken annually for 20 years.

However, overall workers are only “moderately satisfied with the benefits package offered by their employer.” Of those polled, for example, about a fifth said their employer does not offer health insurance and a quarter said it does not offer a retirement savings plan and a third said it does not offer long-term care insurance–in contrast to the federal government, which offers each to nearly all of its employees.

However, the poll also found that certain benefits the government doesn’t offer are common in the private sector. Fifty-eight percent said their employer offers short-term disability insurance, 28 percent accident insurance, 21 percent supplemental health insurance, 19 percent critical illness insurance and 16 percent cancer insurance.

Original Article

 

 

Not matter the age of the workforce of your clients, providing a complete health care package is required to retain and recruit top talent.  Provide flexible benefit options to your clients. Quote groups of 10 or more now for group dental and save 10% on current rates with a guaranteed rate for two years. Quote 5 groups of 10 or more within 30 days and receive an entry to win an IPad.  Get a group quote now.

Don’t forget to talk about Vision. Voluntary and Employer paid options. 

 

Not just dental and vision for groups of 10 or more, we also provide Life, STD, Discount Pharmacy Plans, and so much more for small groups and individuals. Contact us. 

The Amazon Collaboration: 5 thoughts for benefits brokers

Unless you’ve been under a rock the past few days, you’ve heard that Amazon, Berkshire Hathaway, and JPMorgan Chase announced a collaboration to do something about health care for their employees. While the announcement highlighted goals of transparency, tech innovation and forsaken profits – it didn’t include details of how these goals would be achieved. So, what are we supposed to think?

I’ve read at least 10 articles on the topic and it’s BIG in all ways! (ICYMI: Amazon is the biggest retailer, JP Morgan is the biggest bank and Berkshire Hathaway has substantial minority stock holdings in some of the biggest and best-known publicly traded companies in the United States. The health-care industry is 18 percent of the GDP and within two hours of the announcement, speculation caused key health care companies to drop $30 billion dollars in market value.)

As a previous senior manager at Amazon, I have great confidence in this collaboration because Jeff Bezos demonstrates the characteristics this endeavor will require: vision, financial strength, tech innovation, enthusiasm and a passion for the customer. I’m excited to see these three giants of tech, finance, and industry collaborating.

My career at Amazon brings to mind five thoughts about this announcement:

1. This collaboration is unique

It’s unique for two specific reasons:

  1. These three companies are using their own employee populations to “test” some ideas that could have a broader reach in the future. In the next few years, the companies are projected to provide health insurance for over 1 million employees and 2.5 million members in the US. Based on the average employer spend per employee, these three companies are looking to pay a combined $14 billion dollars annually on health care costs. This strategic partnership with such a large population will create opportunities to reduce cost, improve transparency, and build technological solutions.
  1. While each company is an expert in their own industry, none of them know health care. They might not KNOW health care, but they sure spend a lot on it. health care spending is a major expense for employers and can cause a competitive disadvantage. Starbucks spends more on employee health benefits than on coffee beans, and GM spends more on it than on steel.

During my time at Amazon, we entered product categories that weren’t our expertise. We were known for selling books and CDs, but broke into the footwear and clothing market. To gain expertise fast, Amazon would sometimes acquire industry innovators. One of the best-known acquisitions was Zappos, an expert in the footwear industry with great insights, innovation and a relentless focus on customer experience. Amazon became a student of Zappos and as a result is now the top retailer for footwear in the US. I think this deal opens opportunities for more partnerships with health care leaders and experts who have proven to bring innovation and customer-focus.

 

2. Amazon’s culture was made for this challenge

Curiosity may have killed the cat, but it does wonders for Amazon! It’s part of the culture to always be learning and seeking to improve. When most retailers would ship, pack and land your order in a “fast” two weeks – Amazon challenged the status quo and delivered in two days. Amazon was not in the logistics business, they were in the book-selling business. Yet, today they are logistics gurus because they learned, hired experts, sacrificed short-term gains, and prioritized long-term improvement over profit.

It’s no secret that Jeff Bezos is curious about new possibilities and he acts to explore them. Recently he said, “success will require a beginner’s mindset.” While they don’t have the answer to this very complex, heavily regulated, highly political endeavor – I know that Amazon is entering this task with eyes wide open. They aren’t afraid to roll up their sleeves, challenge the status quo and spend the money and time to find the right solution(s).

I’m sure you noticed the phrase, “free from profit-making incentives.” While many in the industry may scoff at this, recognize what it means. Using their 2.5 million members, they’re willing to invest in new ideas and be a health care incubator for America. If there’s money to be made, I’m sure they’ll figure it out, but they don’t have the short-term constraint of bringing ideas to market profitably. This is a differentiation.

3. Leaders inspire results

Jeff Bezos has an amazing ability to create and communicate a bold direction that inspires results. I remember when he announced that Amazon would be the number-one clothing retailer in the US while we were still in “startup mode.” He created the vision, empowered his team, taught us to fail fast and funded the growth. Today Amazon is the number-one retailer in clothing.

Another example: Would we ever have made it to the moon if John F. Kennedy hadn’t announced before Congress, “this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth”?

I made a bold move leaving Amazon to help the team at freshbenies improve health care. I have observed that health care is a segmented industry with few leaders calling out a bold direction. I admire these 3 leaders for their audacious vision and ambition.

4. Information is useful, but rumors are useless

In an earlier article, I noted that the health care industry is ripe for disruption, innovation, a better end-user experience, transparency, technological advances, etc. If you’re concerned about this deal, you should be concerned for EVERYONE coming after health care – Google, Apple and so many others! The space is primed for gutsy companies that will deliver a better experience. Speaking of that…

5. Customer experience will be the focus

While at Amazon the team would gather for “All-Hands” meetings with Jeff Bezos. In one of those meetings, an employee inquired about Jeff’s high customer service standard. Jeff said that his goal wasn’t to just elevate the customer experience at Amazon but to influence all industries to elevate their customer experience. To him, customer service is not a goal but the entire vision of his company. Jamie Dimon, Chairman and CEO of JPMorgan Chase said, “Our people want transparency, knowledge, and control when it comes to managing their health care.” I think it’s safe to say that elevating the employee experience will be a top priority!

Megan McArdle from Bloomberg View wrote, “health care costs are a bit like the weather: everyone talks about them, but no one ever does anything about it.” Maybe these three leaders will spark change and actually do something about it.

We should all take note of the information that has been released:

  • Three companies have decided to partner to figure out how to reduce health care costs for their companies and employees.
  • They will focus on technology solutions that can provide simplified and transparent health care, at a lower cost.

That’s what we know. The rest is only rumors. Amazon is usually pretty tight-lipped about their projects, so don’t expect to hear much until the launch.

FEB 01, 2018 | BY TONIA DEGNER – Benefits Pro 

Millennials have different ideas about retirement, longevity and their finances

Millennials have different ideas about retirement, longevity, and finances at the end of life than other generations.

That doesn’t mean they think about those things realistically. In fact, they’re not thinking about their future much at all.

So finds a survey from Aperion Care that asked millennials questions as followed but not limited to: How long do you expect to live? Do you think you will have longer lifespans than your parents? How they’re doing on saving for retirement?

Bear in mind, the survey report notes, this generation (currently aged 21 to 37) grew up with the 9/11 attacks, the Great Recession, school shootings and the Gulf War. This generation witnessed the election of the first African-American president Barack Obama. In addition the view of a society that offers a very child-centrist environment, not to mention the rise of social media.

While the study finds them to be idealistic, many of their notions about the future could leave them exposed to a rude awakening.

Millennials on retirement preparation

For instance, 60% expect to be in “average” financial shape when they die, and 56 % aren’t all that concerned about being a burden to people as they age.  55 % say they’ll be about the same or worse off financially as their parents when they die.

They also see themselves dying somewhere other than a nursing home — see the snippet from Aperion’s infographic (click to enlarge):

 

Most (58 %) are already saving for retirement. 84 % of savers having accumulated less than $50,000.
( 53 % of boomers have less than $50,000 saved, too)

Asperion’s infographic (click to enlarge):

 

But besides that, here’s the really scary part: 34 % of millennials think they’ll be able to get by comfortably, no less—on less than $200,000 in retirement.

The reality, according to AARP, is that to be able to live off of $40,000 a year in retirement, a worker needs to save about $1.18 million for a 30-year retirement.

And despite that naïve expectation, other expectations included:  85 % expect to own a home, despite loads of student debt and low-paying jobs, 58 % also plan to help out their kids with college tuition and 40 % think they’ll retire younger than their parents did.

A mixed outlook on the future

Indicating a very mixed outlook, despite all those financially ambitious—if unrealistic—goals, 79 % expect to live through another major economic depression and 51 % think that global warming will become irreversible.

And in a sad commentary on both the state of the world and the state of millennials’ minds, they believe that universal health care in the U.S. is less likely (60%) than the advent of World War III (44%).

 

Life Insurance for Everyone

Healthcare Coverage Has 1 Powerful New Trick

Ted Bauman | Monday, November 20, 2017 at 4:00 pm

Earlier this year I wrote a couple of articles about the state of healthcare in the U.S. They generated a lot of responses — so many, in fact, that it took me over a day to read them all.

Somewhat to my surprise, the clear majority of the responses went something like this:

The U.S. healthcare and health insurance systems have serious problems at many levels. The problem needs to be addressed holistically, not piecemeal. No matter what one thinks of Obamacare, it would be wrong to undo it without a fully worked-out replacement.

Well, we’ve seen nine months of attempts to do just that. And all have failed — because it was clear to a majority of the U.S. Senate that they didn’t actually solve any problems, much less do so holistically.

So, we are back to the piecemeal approach, as embodied by President Donald Trump’s executive order to cut $7 billion in cost-sharing payments to insurance companies participating in the Obamacare system.

If there’s still time in your financial life, you need to start thinking of an alternative … and I know just the thing.

Skyrocketing Premiums

The $7 billion in question are the payments the government makes to health insurance companies to offset the discounts on co-payments that low-income consumers have received under Obamacare.

White House Press Secretary Sarah Huckabee Sanders said: “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system.”

There’s just one problem: The money wasn’t a subsidy to insurance companies.

It was a subsidy to low-income Americans … nearly 6 million of them, or 57% of the people who get their insurance via Obamacare.

The insurance companies are simply a pass through for the money that Trump has cut off. The money just compensates the companies for reducing high co-pays and deductibles for families unable to afford them. It’s not a source of additional profit for insurers.

By ending the payments, the administration has ensured that many Americans will see their premiums skyrocket. 20% to 25% is the figure being bandied about.

Unfortunately for many insurance companies, their rates for 2018 are already set. They can’t change them. They’ll just have to eat the losses … or become stingier about what treatments they’ll pay for.

But they have other options, too.

All of Us in the Crosshairs

Two groups of people that are especially vulnerable to the Trump action on the payments: early retirees who aren’t yet eligible for Medicare and self-employed people. Those are the two groups most vulnerable to changes in the individual insurance marketplace.

That’s because, without the funding, insurance plans will flee individual insurance exchanges in droves. That will force early retirees — and anyone else without employer-provided health coverage but an income higher than the premium subsidy cutoff — to pay full unsubsidized rates for insurance directly from the insurance companies. The same goes for copays and deductibles, which will soar.

But there will be an impact on the rest of us too … including those of us who get our insurance from our employers. Here’s how and why…

As I’ve noted, Trump’s withdrawal of the payments will force the insurance companies to eat those costs in 2018. They’ll have to make up for that loss somewhere.

They’ll do so by raising the premiums the rest of us pay, spreading out the losses across all their plans. But there’s more.

In addition to the payment cuts, the president also signed an executive order calling for new regulations to encourage cheap, loosely regulated health plans. Once those are up and running, millions of younger people will move to them.

That will leave existing insurers with a smaller pool of riskier people to insure. Elementary insurance theory tells us this will result in even more premium increases.

No Savings

To make matters worse, Trump’s move will actually cost the federal government an estimated $7.2 billion next year because it will have to shell out more in premium subsidies to cover these higher rates.

Individuals with annual incomes between $12,000 and $48,000 qualify for subsidies that offset the cost of their monthly insurance premiums. Trump’s action doesn’t touch that, so those subsidy payments will have to go up to cover higher premium costs.

Over 10 years, the additional cost would be almost $200 billion. So, there will be no budgetary savings at all … the opposite, in fact.

Playing Politics With Your Healthcare

The president and other administration officials have described Trump’s move as a way to put pressure on Congress to come up with a bipartisan fix. It’s unlikely that Trump would have done this if he thought he couldn’t get Congress to agree on an alternative fix — and fast.

Yeah, right.

Under these circumstances, if you still have time to put aside money for your retirement healthcare needs, you need to find out as much as you can about what I call the “(H)IRA” as soon as possible. It’s a special trick that can save you current tax, ensure your healthcare and help you have more to spend in retirement.

Because I have a powerful feeling you’re going to need all the help you can get.

Kind regards,

Ted Bauman
Editor, The Bauman Letter

CVS to Buy Aetna for $69 Billion in a Deal That May Reshape the Health Industry

By Michael J. de la Merced and Reed Abelson

CVS Health said on Sunday that it had agreed to buy Aetna for about $69 billion in a deal that would combine the drugstore giant with one of the biggest health insurers in the United States and has the potential to reshape the nation’s health care industry.

The transaction, one of the largest of the year, reflects the increasingly blurred lines between the traditionally separate spheres of a rapidly changing industry. It represents an effort to make both companies more appealing to consumers as health care that was once delivered in a doctor’s office more often reaches consumers over the phone, at a retail clinic or via an app.

The merger comes at a time of turbulent transformation in health care. Insurers, hospitals and pharmacy companies are bracing for a possible disruption in government programs like Medicare as a result of the Republicans’ plan to cut taxes. Congress remains at an impasse over the future of the Affordable Care Act, while employers and consumers are struggling under the weight of rising medical costs, including the soaring price of prescription drugs. And rapid changes in technology have raised the specter of new competitors — most notably Amazon.

A combined CVS-Aetna could position itself as a formidable figure in this changing landscape. Together, the companies touch most of the basic health services that people regularly use, providing an opportunity to benefit consumers. CVS operates a chain of pharmacies and retail clinics that could be used by Aetna to provide care directly to patients, while the merged company could be better able to offer employers one-stop shopping for health insurance for their workers.

But critics worry that customers could also find their choices sharply limited. The deal risks leaving patients with less choice of where to get care or fill a prescription if those with Aetna insurance are forced to go to CVS for much of their care.

On Sunday, the two companies emphasized their ability to transform CVS’s 10,000 pharmacy and clinic locations into community-based sites of care that would be far less expensive for patients.

“We think of it as creating a new front door to health care in America,” CVS Health’s chief executive, Larry J. Merlo, said in an interview.

The merger would establish a new way of delivering care, with nurses, pharmacists and others available to counsel people about their diabetes or do the lab work necessary to diagnose a condition, Mr. Merlo said. “We know we can make health care more affordable and less expensive.”

Mark T. Bertolini, Aetna’s chief executive, said that by using CVS’s locations, the company can provide people with a better way of accessing medical care.

CVS operates 10,000 pharmacy and clinic locations, which Aetna could use to provide care directly to customers. CreditMario Anzuoni/Reuters

“It’s in their community. It’s in their home,” he said. He added, “CVS has the draw. People trust their pharmacist.”

It is the development of community-based clinics — capable of delivering care with the technology and health information available from both parties — that could prove to be the biggest change brought about the deal.

The hope would be that consumers would not only be able to see savings by going to a retail store to treat a sore throat but also have better oversight of a chronic illness, such as diabetes or heart disease. They could get advice on how to lose weight, or undergo tests to monitor their health.

“If they can drive the adoption of the care delivery model, that’s a big deal,” said Ana Gupte, a senior health care analyst for Leerink Partners.

The merger agreement came as another factor weighs on the minds of all in the health care industry: Amazon, which has been rumored to be preparingfor an entry into the pharmacy business. Jeff Bezos, the Amazon chief executive, and his e-commerce juggernaut have already overturned many industries: book buying, retail shopping, groceries and Hollywood, using fierce customer loyalty and enormous reach as cudgels against incumbent players.

But CVS and Aetna have had a business partnership dating back seven years, and have steadily converged into similar visions of how the health care industry was evolving. Conversations about a deeper bond eventually crystallized into deal talks within the last two months, according to a person with direct knowledge of the discussions.

Although neither chief executive mentioned Amazon by name, both said that what they were creating was a compelling opportunity in and of itself.

“Chasing our competitors has never been a solution,” Mr. Bertolini said. He added, “Our competitors will do what they do.”

Many companies are seeking shelter in the arms of their former adversaries, with well-known medical groups like the Cleveland Clinic joining with Oscar Health, an insurer. With federal officials blocking traditional mergers — like the megadeal that featured Anthem and Cigna, the nation’s largest insurers, and one involving Aetna and its rival Humana — companies are looking at combinations that take them beyond their traditional lines of business.

Many analysts view the combination of CVS and Aetna as a defensive move by the companies. CVS Health, which also recently signed an agreement with Anthem to help the insurer start its own internal pharmacy benefit manager, is looking to protect its business with Aetna as it fends off rivals like UnitedHealth Group’s OptumRx and others. Aetna, foiled in its attempt to buy Humana, is searching for new ways to expand its business.

CVS and Aetna have had a business partnership dating back seven years, and have steadily converged into similar visions of how the health care industry was evolving. CreditBill Sikes/Associated Press

The merger could also fundamentally reshape the business of overseeing drug coverage for insurers, an industry that is dominated by three large players and that has increasingly come under scrutiny over the past year as public anger over high drug prices has expanded beyond the usual culprits — most notably the pharmaceutical industry — to lesser-known players like pharmacy benefit managers.

Under the terms of the deal, CVS will pay about $207 a share, based on Friday’s closing prices. Roughly $145 a share of that would be in cash, with the remainder in newly issued CVS stock. The deal is expected to close in the second half of next year, subject to approval by shareholders of both companies as well as regulators.

Antitrust approval has become an interesting question in the Trump administration, which bankers and lawyers had thought would be more tolerant of consolidation than its predecessor.

A combination of a drugstore company and an insurer is considered less problematic than a merger of two players in the same business, which could reduce competition and hurt consumers. Such concerns ultimately sank Aetna’s efforts to buy Humana, and Anthem’s push to buy Cigna, when the Obama administration signaled its opposition to such consolidation.

CVS’s proposed takeover of Aetna is a so-called vertical merger, combining companies in two different industries. But while such deals have traditionally met little opposition in Washington, the Justice Department has sued to block AT&T’s $85.4 billion takeover of Time Warner on the grounds that it would create too powerful of a content company.

Both CVS and Aetna played down the prospects of regulators moving to block their deal. The breakup fee for the transaction is not especially large, reflecting that belief.

Mr. Bertolini asserted that the companies would not raise prices for consumers. “It doesn’t make sense for us to charge people more when we want more people in the store,” he said.

But analysts and other merger experts warn that the deal could be blocked by federal antitrust officials who worry that it could lessen competition. One area of focus may be Medicare; both companies are significant players in offering prescription drug plans to Medicare beneficiaries.

While the companies said they want to lower costs, CVS also makes money on rebates from drug makers and on filling prescriptions through its pharmacies.

David A. Balto, an antitrust lawyer who has been sharply critical of combinations among insurers and pharmacy benefit managers, said that he was wary of having retailers in charge of people’s health. He argued that doctors may be in a better position to treat illness than retail executives.

“Who do you want to run the health care system?” he said.

Read article on original site: https://www.nytimes.com/2017/12/03/business/dealbook/cvs-is-said-to-agree-to-buy-aetna-reshaping-health-care-industry.html?WT.mc_id=SmartBriefs-Newsletter&WT.mc_ev=click&ad-keywords=smartbriefsnl

Healthcare Coverage Has 1 Powerful New Trick

By: Ted Bauman

Earlier this year I wrote a couple of articles about the state of healthcare in the U.S. They generated a lot of responses — so many, in fact, that it took me over a day to read them all.

Somewhat to my surprise, the clear majority of the responses went something like this:

The U.S. healthcare and health insurance systems have serious problems at many levels. The problem needs to be addressed holistically, not piecemeal. No matter what one thinks of Obamacare, it would be wrong to undo it without a fully worked-out replacement.

Well, we’ve seen nine months of attempts to do just that. And all have failed — because it was clear to a majority of the U.S. Senate that they didn’t actually solve any problems, much less do so holistically.

So, we are back to the piecemeal approach, as embodied by President Donald Trump’s executive order to cut $7 billion in cost-sharing payments to insurance companies participating in the Obamacare system.

If there’s still time in your financial life, you need to start thinking of an alternative … and I know just the thing.

Skyrocketing Premiums

The $7 billion in question are the payments the government makes to health insurance companies to offset the discounts on copayments that low-income consumers have received under Obamacare.

White House Press Secretary Sarah Huckabee Sanders said: “The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system.”

There’s just one problem: The money wasn’t a subsidy to insurance companies.

It was a subsidy to low-income Americans … nearly 6 million of them, or 57% of the people who get their insurance via Obamacare.

The insurance companies are simply a passthrough for the money that Trump has cut off. The money just compensates the companies for reducing high copays and deductibles for families unable to afford them. It’s not a source of additional profit for insurers.

By ending the payments, the administration has ensured that many Americans will see their premiums skyrocket. 20% to 25% is the figure being bandied about.

Unfortunately for many insurance companies, their rates for 2018 are already set. They can’t change them. They’ll just have to eat the losses … or become stingier about what treatments they’ll pay for.

But they have other options, too.

All of Us in the Crosshairs

Two groups of people that are especially vulnerable to the Trump action on the payments: early retirees who aren’t yet eligible for Medicare and self-employed people. Those are the two groups most vulnerable to changes in the individual insurance marketplace.

That’s because, without the funding, insurance plans will flee individual insurance exchanges in droves. That will force early retirees — and anyone else without employer-provided health coverage but an income higher than the premium subsidy cutoff — to pay full unsubsidized rates for insurance directly from the insurance companies. The same goes for copays and deductibles, which will soar.

But there will be an impact on the rest of us too … including those of us who get our insurance from our employers. Here’s how and why…

As I’ve noted, Trump’s withdrawal of the payments will force the insurance companies to eat those costs in 2018. They’ll have to make up for that loss somewhere.

They’ll do so by raising the premiums the rest of us pay, spreading out the losses across all their plans. But there’s more.

In addition to the payment cuts, the president also signed an executive order calling for new regulations to encourage cheap, loosely regulated health plans. Once those are up and running, millions of younger people will move to them.

That will leave existing insurers with a smaller pool of riskier people to insure. Elementary insurance theory tells us this will result in even more premium increases.

No Savings

To make matters worse, Trump’s move will actually cost the federal government an estimated $7.2 billion next year because it will have to shell out more in premium subsidies to cover these higher rates.

Individuals with annual incomes between $12,000 and $48,000 qualify for subsidies that offset the cost of their monthly insurance premiums. Trump’s action doesn’t touch that, so those subsidy payments will have to go up to cover higher premium costs.

Over 10 years, the additional cost would be almost $200 billion. So, there will be no budgetary savings at all … the opposite, in fact.

Playing Politics With Your Healthcare

The president and other administration officials have described Trump’s move as a way to put pressure on Congress to come up with a bipartisan fix. It’s unlikely that Trump would have done this if he thought he couldn’t get Congress to agree on an alternative fix — and fast.

Yeah, right.

Under these circumstances, if you still have time to put aside money for your retirement healthcare needs, you need to find out as much as you can about what I call the “(H)IRA” as soon as possible. It’s a special trick that can save you current tax, ensure your healthcare and help you have more to spend in retirement.

Because I have a powerful feeling you’re going to need all the help you can get.

Kind regards,

Ted Bauman
Editor, The Bauman Letter

 

Read article on original site: https://www.moneyandmarkets.com/healthcare-coverage-has-1-powerful-new-trick-89685?campid=204266&em=rrogers%40capital-benefits.com

Victory for Health Freedom | Defeat for Obamacare

HHS Announces Cost-Sharing Reduction Subsidies Will Cease ‘Immediately’; Citizens’ Council for Health Freedom Applauds Move That Will Begin to Unravel the ‘Unaffordable’ Care Act for Good

ST. PAUL, Minn.—The Trump administration announced late last night that cost-sharing reduction (CSR) payments, currently propping up the Affordable Care Act, will be “discontinued immediately based on a legal opinion from the Attorney General.”

Citizens’ Council for Health Freedom (CCHF, www.cchfreedom.org) has been calling for the end of the unconstitutional CSR subsidies for many months and applauds the decision as a step in the right direction toward restoring health freedom for all Americans.

“We’re pleased that President Trump and his administration are taking action to follow the rule of law, as written in the U.S. Constitution,” said CCHF president and co-founder Twila Brase. “Not one dime has been appropriated by Congress for the cost-sharing reduction subsidies. The taxpayer already hit with high premiums is facing higher taxes as a result of the billions in CSR subsidies that should never have been paid to the health plans.

“With inaction by Congress, President Trump is wisely using his executive authority to unravel the Affordable Care Act,” she continued. “We support the end of unconstitutional bailouts for health plans. If health plans choose to exit from the Obamacare exchanges as a result, state legislatures should use this opportunity to reassert their 10th Amendment states’ rights authority and restore access to the affordable catastrophic indemnity health insurance and high-risk pools that the Affordable Care Act prohibited.”

Late Thursday, U.S. Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare & Medicaid Services Administrator Seema Verma released the following statement:

“It has been clear for many years that Obamacare is bad policy. It is also bad law. The Obama Administration unfortunately went ahead and made CSR payments to insurance companies after requesting—but never ultimately receiving—an appropriation from Congress as required by law. In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers. After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”

Just yesterday, President Trump signed an executive order that, according to the White House, seeks to “improve access, increase choices and lower costs for health care.”

Brase said, however, that the EO lacked the strong language necessary to make real changes in today’s health care landscape, with six instances of “potentially” and three instances of “consider” in the order, rather actual directives.


Read article on original site: https://hamiltonstrategies.com/victory-for-health-freedom-defeat-for-obamacare/