Open enrollment begins November 1 for Individual/Family Insurance.

As we approach another open enrollment period, I wanted to share information that may help clients and friends make a decision about their health insurance. Premium rates and plan information is trickling in from carriers and it appears rate increases are again a reality. Please read your plan’s renewal packet carefully to learn how rate and benefit changes will affect you.

Important Dates
Open enrollment runs from November 1, 2016 through January 31, 2017. This is the period when you can change plans for the 2017 plan year. However, if you want to change plans for a January 1 effective date, you’ll need to enroll by December 15. If you do nothing at all, your existing plan will renew on January 1. Whether you choose a new plan or stay with your current plan, the first premium payment will need to be paid by December 31.

Here is a rundown of the major changes and announcements for this year’s open enrollment.

Rate increases
Expect rate increases for all plans. This is due to a number of factors, most notably:

1. Two federal programs that have helped health insurers offset costly medical claims, and cover sick patients in general, are set to end this year. These programs were intended as a temporary cushion for insurers, who are now required to accept all applicants regardless of their medical histories.
2. The rising cost of healthcare, especially specialty drugs.
3. Adverse Selection. Some consumers waited to enroll in coverage until a health problem arose. This impacted PPO plans particularly hard.

Specific Carrier Details

• Anthem Blue Cross will have the largest premium increase for members (exceeding 35% for some). They appear to be content with their narrow Pathway provider network, which has shown to be very weak in many bay area counties. Their providers include UC’s and many smaller local hospitals, but do not include Stanford or Sutter facilities or providers.
• Anthem Blue Cross will convert their PPO plans to EPO plans in most counties in the state. EPO (Exclusive Provider Organization) plans do not pay benefits when seeing out-of-network providers. (PPO plans pay a reduced benefit when seeing non-network providers for covered services).
• In some counties, Blue Shield will be the only PPO option and, in many, the least expensive. Blue Shield has made some improvement in their network statewide and will be a popular option for those looking for an adequate network and competitive premium. Note: As of this writing, Blue Shield is still in negotiations with Sutter Health who controls Palo Alto Medical Foundation, CalPacific, and a growing number of provider groups in the bay area. They will not have Stanford Hospital in their network.
• Both Anthem Blue Cross and Blue Shield announced they will assign a Primary Care Physician (PCP) to members in their PPO and EPO plans (if members don’t choose one for themselves). PCP’s are generally synonymous with HMO plans, which require a visit to a PCP before seeing a specialist. Note: Neither of these carriers are requiring a visit to the PCP first, which begs the question, why the action? Carriers have found that members are frustrated in not finding in-network providers and, in some cases, opt to see a non-network provider instead even though it results in a higher share of cost. This, at last, will give a member an in-network suggestion.
• The Blue Card Program will continue for both Anthem Blue Cross and Blue Shield plans. Most of these PPO and EPO plans will provide emergency and non-emergency coverage when traveling out of state. Within Anthem Blue Cross and Blue Shield plans, is a program called Blue Card and it has become a valuable benefit especially for those with college-age children out of the state. Blue Card is an affiliate of the National Blue Cross/Blue Shield Association and opens up state provider networks all over the country to many Anthem Blue Cross and Blue Shield plan members. This allows for in-network benefits for non-emergency services when out of state. This benefit has allowed some to waive costly college health insurance plans by remaining on the family’s insurance.
• HealthNet has been slow in releasing 2017 plans and rates. It appears their PPO provider network will be the same as last year, which was the largest of the PPO networks in the state. That could mean access to such providers as Palo Alto Medical Foundation, Stanford Hospital, UC’s, and many Sutter facilities and providers. However, we recently learned that HealthNet will announce major plan changes in the coming weeks. Historically, their premiums have been higher than other carriers as a result of their more robust provider network. Whether this holds true next year is unknown as of this writing.
• HealthNet will have no out-of-state coverage (except for emergencies). HealthNet will eliminate their out-of-state provider network. There will be coverage for emergencies only outside of California.

Other Important Information

• Health Savings Account (HSA) plans are still offered and provide tax-savings opportunity. As an alternative to paying higher premiums for plans with low or no deductible (Silver, Gold, Platinum), HSAs and HSA-compatible insurance has proven to be a winning combination for many. Primarily found in the Bronze level insurance plan category, major medical insurance is maintained at a lower cost while the premium savings can be saved in a tax advantaged account (think of it as a “medical IRA”). To learn more about HSAs, visit our web page: Health Savings Accounts.
• Health Maintenance Organizations (HMO) plans have milder increases and lower premiums. HMO plans appear to be faring better under healthcare reform. HMO plans apply more managed care techniques to control costs, such as requiring referrals to specialists from Primary Care Physicians and maintaining tighter control of local provider networks and assigned hospitals. Those willing to compromise and give up some direct provider access and control may find some premium relief with an HMO. Most counties offer at least two HMO options.
• Some Grandfathered Plans (plans in existence before March 23, 2010), will be discontinued. Blue Shield announced they will be discontinuing some of their Grandfathered insurance contracts and transferring members to new ACA-plans of comparable benefit. They will still maintain a majority of their Grandfathered plans. Grandfathered plans still have the advantage of a larger provider network, an, in some cases, offer a unique plan design and better value.
• Penalties for carrying no insurance are increasing. With some exceptions, fines for not having qualified insurance are levied by the IRS when processing tax returns for the prior year. Qualified insurance is defined as insurance that meets minimum essential coverage requirements. Without providing proof of insurance (new tax form 1095), you can be fined based on the number of months without qualified insurance. In 2016 the penalty is 2.5% of your total household adjusted gross income, or $700 per adult and $350 per child; to a maximum of $2,085 (whichever is larger). For tax year 2017 and beyond, the percentage option remains the same (2.5%) but the flat fee will be adjusted for inflation. Click here for more information on IRS penalties.

California offers two marketplaces to obtain ACA-compliant insurance.
ACA-compliant insurance can be purchased from two marketplaces or exchanges in California: CoveredCA, the public exchange, or the private market (or off-exchange). Both must offer insurance that complies with Obamacare mandates and rules. Each marketplace has advantages, too.

1. CoveredCA: Residents can enroll in insurance and be considered for financial assistance, if qualified. Eligibility is based on household income, number of household members, and zip code. CoveredCA also serves as a gateway to Medi-Cal for lower income residents. We encourage shoppers to consider CoveredCA if they believe they qualify for assistance or believe they might in the future. Call 1- 800-300-1506 to talk with a representative or start by visiting their website at coveredca.com/.
2. Private Market: The off-exchange market offers an easier enrollment process, more plan options to choose from, but no financial assistance is available. For example, carriers offer multiple Bronze level plans where CoveredCA typically offers just the standard model of Bronze plans. Enrollment is simplified in the private market because no income information and verification is required. Those who know they won’t qualify for financial assistance or decide not to enroll through CoveredCA can enroll in the private market.

OnlyHealthInsurance represents and only sells plans in the private market (off-exchange market).
We’ll be happy to help you find a private market plan to meet your needs. Send me an email at phild@onlyhealthinsurance.com or make an appointment to meet with me, by clicking here.

We are also happy to introduce you to our video, which further explains what the ACA means for Individual and Family plan shoppers. Click here to watch our video!

Phil Dougherty
OnlyHealthInsurance