What’s the Best Health Insurance Option for You?

Originally published on

Despite efforts to improve the health plan-buying process, choosing health insurance isn’t like buying a car. Deciding between car accessories can be fun. Picking a health insurance plan can feel like a chore, but it’s one of the most decisions you make each year.

You might feel confused about health insurance terms and the myriad options available to you. You may feel like you’re not even sure where to start. We’re here to help.

On this page, we’ll go through possible avenues for health insurance coverage depending on your situation. Not all of these solutions may work for your specific case. Instead, it’s a guide of what’s likely a choice for you.

Now, before we get into options, let’s talk about what you should compare when choosing a health insurance plan:

  • Your finances. How much money do you have for out-of-pocket costs? Are you eligible for health insurance tax credits?
  • Family situation. Do you need a family health plan?
  • Health care need. What are your and your dependents’ health care needs?
  • Job status. Are you employed?
  • Location. What individual plans are offered in your state?
  • Your health plan preferences. Would you rather a restricted network of providers at a lower cost or more flexibility with higher premiums?

All of those factors play a part on what health insurance would work for you.


Open enrollment

Open enrollment is when most Americans sign up for or change health insurance. That period varies by how you get insurance.

Here’s when open enrollment is for different types of insurance:

  • Employer-sponsored health insurance: Businesses don’t have a uniform open enrollment period. Instead, each company picks a time for employees to make benefit changes. Ask your benefits department when open enrollment is for you.
  • MedicareMedicare open enrollment runs from Oct. 15 to Dec. 7. Beneficiaries can sign up for or change a Medicare plan.
  • Individual insurance/Affordable Care Act (ACA) exchange plans: Open enrollment is from Nov. 1 to Dec. 15 for most Americans. There are a handful of states that have longer open enrollment for the individual market. We’ll get more into that later.
  • Medicaid and Children’s Health Insurance Plans (CHIP): There is no open enrollment for Medicaid and CHIP. You can sign up at any time of the year if you’re eligible.

You can only make changes to your health insurance during open enrollment unless you have a qualifying event that kicks off a special enrollment period. This could be because of a job loss, reduced hours, a death, a divorce or a new child.


What health insurance is available for you?

Now, let’s go through 10 scenarios and likely health insurance options for you.

People with a job that offers health insurance

Having a job makes it much easier to get health insurance. Most Americans are covered through their job. Employer-sponsored coverage is usually cheaper than an individual plan. That said, there are other options even if you’re employed.

Here are five options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer


Individual market/Affordable Care Act exchanges

Short-term health plans


Someone with a spouse whose employer offers health insurance

Going with an employer-sponsored health plan is usually your best bet. Employers share the costs with employees. That results in lower premiums and out-of-pocket costs.

Don’t forget to explore your spouse’s employer’s insurance options.

Here are five options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer


Individual market/Affordable Care Act exchanges

Short-term health plans


Someone who’s unemployed

Not having a job is tough enough. It also means you lose an option of getting health insurance through your employer.

Your options were once more limited when you lost your job. In fact, COBRA might have been your only option. However, the ACA and recent Trump administration regulation changes give you more choices if you’re unemployed.

Here are six options (click on any plan to find out more):

Health insurance through your spouse’s employer



Individual market/Affordable Care Act exchanges

Short-term health plans

Children’s Health Insurance Program


Senior citizen

Turning 65 is a health insurance milestone. You become eligible for Medicare and can choose between original Medicare or Medicare Advantage.

You don’t have to sign up for Medicare at 65 years old, but it’s a wise choice. If you wait, you could get fined when you sign up. Not enrolling in Part B can also mean a 10 percent premium late-enrollment penalty for each year you don’t sign up.

One option is to get Medicare Part A (hospitalizations), which is free for most Americans, and keep your employer plan if you’re still employed. Make sure you take into account the possible late-enrollment penalty if you don’t sign up for Part B when you become eligible for Medicare.

Here are four options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer

Original Medicare

Medicare Advantage


Young adults/20-somethings

The ACA requires insurers allow members to keep their children on health plans until the child turns 26. The good news is there are multiple options for young adults and 20-somethings other than your parents’ insurance.

If you find regular health insurance plans are too pricey, you can explore a short-term health plan. These plans have low premiums but don’t offer the same protections as a regular health insurance plan. So, beware of the limited coverage and out-of-pocket costs associated with those plans.

Here are four options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer

Individual market/Affordable Care Act exchanges

Short-term health plans


Someone who’s middle class

Your family’s household income can play a part in your health insurance options.

The IRS provides premium tax credits for households with incomes between 100 percent and 400 percent of the federal poverty line.

Federal poverty level guidelines

Persons in Household Federal poverty level for continental U.S. Premium subsidy threshold (400% of federal poverty level)
1 $12,140 $48,560
2 $16,460 $65,840
3 $20,780 $83,120
4 $25,100 $100,400
5 $29,420 $117,680
6 $33,740 $134,960
7 $38,060 $152,240
8 $42,380 $169,520

Of course, you also may have the option of a plan through your job or your spouse’s job, which is likely a more affordable option than going with an individual or ACA plan even with tax credits.

Here are four options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer

Individual market/Affordable Care Act exchanges

Short-term health plans


Someone with a lower income

Americans will lower incomes have the potential for more help with their health insurance. The IRS offers premium tax credits and the ACA also kicks in funding to help offset out-of-pocket costs for lower-middle-class Americans with incomes less than 250 percent of the federal poverty level.

There’s also a public program option like Medicaid and the Children’s Health Insurance Program. States’ eligible income levels vary for Medicaid and CHIP. We’ll get more into that later.

Here are six options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer


Individual market/Affordable Care Act exchanges

Short-term health plans

Children’s Health Insurance Program


People with children

Getting your children covered is probably even more vital in your mind than getting insurance for yourself. Medicaid covers more than 45 million children and CHIP provides include for about 9 million.

Here are five options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer


Individual market/Affordable Care Act exchanges

Children’s Health Insurance Program


Someone with pre-existing conditions

Searching for affordable health insurance when you have a pre-existing condition, such as diabetes or heart disease, was once nearly impossible. Before the ACA, insurers could reject people with pre-existing conditions if they applied for an individual health plan. Alternatively, those insurers might charge high premiums because of the added risk.

The ACA ended that practice. Now, Americans with pre-existing conditions can’t get denied coverage and won’t pay a lot more for health insurance.

Here are four options (click on any plan to find out more):

Health insurance through your employer

Health insurance through your spouse’s employer


Individual market/Affordable Care Act exchanges


Small business owner or contractor

Being a small business owner or a contractor can limit your insurance options and you may face significant health coverage costs.

However, there are more options for small business owners and contractors in 2019. The Trump administration changed regulations that will expand short-term plan and association health plan options.

These low-cost options come with fewer consumer and patient protections. So, you want to decide if sacrificing regular health insurance plan benefits are worth the lower costs.

Here are three options (click on any plan to find out more):

Individual market/Affordable Care Act exchanges

Short-term health plans

Association health plans


Your options for health insurance

Health insurance isn’t one-size-fits all. Your options vary depending on your job status, age, income, family and what you want from your insurance. In other words, would you rather pay more for premiums and less out-of-pocket? Alternatively, do you want low premiums with the potential for substantial out-of-pocket costs?

Here are 10 health insurance options and descriptions about each one.


Health insurance through your employer

Employer-sponsored health insurance remains how more than half of Americans get their coverage. This coverage is also cheaper than many non-government options. That’s because your employer is chipping in to pay for health insurance.

Annual family premiums for employer-sponsored health insurance plans averaged $19,616 in 2018. Employees contributed $5,547 on average for those premiums. Single coverage averaged $6,896 with workers contributing an average of $1,186 annually, according to Kaiser Family Foundation.

Pros: Cheaper than the individual market.

Cons: Limited choices, employer must offer coverage.


Health insurance through your spouse’s employer

Most businesses allow employees to add their spouse and children to health plans, but it comes at a cost.

Some employers have removed the spouse tier for health insurance. In those cases, employees only have an individual or family plan option. That can result in higher premiums for a couple without children because they’re paying for family coverage.

When both you and your spouse have health insurance options, it’s a good idea to compare plans. You could actually save more than $1,000 each year depending on the health plan.

Where do you start? Compare the plans’ out-out-pocket costs, deductibles, copays and coinsurance. You might find your spouse’s plan makes more sense for your family. Just remember to check that your providers are part of that plan’s network.

Pros: Cheaper than the individual market.

Cons: Limited choices, employer must offer coverage.



If you lose your job, you are likely eligible for COBRA coverage for 18 months.

You must sign up by 60 days after the qualifying event, such as getting laid off. COBRA extends your employer-sponsored plan though you’re no longer employed. COBRA is costly since the employer no longer pays for your coverage. You pay as much of 102 percent of the costs of the plan.

The average annual family premiums for an employer-sponsored health insurance plan cost nearly $20,000 in 2018. Employees contributed about $5,500 on average. So, if you have a COBRA plan in this scenario, you’d wind up paying more than $20,000 in premiums. That’s pricey but allows you to maintain your coverage temporarily.

Pros: Allows you to keep your previous employer’s plan.

Cons: Costly, only available for 18 months after employment.


Original Medicare

Medicare Parts A & B are often called original Medicare. It’s the program that has covered seniors since the 1960s.

Part A covers hospitalizations; Part B deals with physicians and outpatient care. Nearly all seniors can sign up for Part A without any premiums when they turn 65.

Annual Part B premiums average $1,600 in 2019, but that could be higher depending on your income.

Pros: Accepted by most physicians and hospitals, Part A doesn’t charge premiums for most people, Part B can be a better alternative than employer plans or individual insurance.

Cons: You may have trouble finding a physician that accepts Medicare, you’ll need to get a Part D prescription plan and Part B coverage can be more expensive than Medicare Advantage.


Medicare Advantage

Medicare Advantage is a plan that’s offered by a private insurance company. It’s an alternative to original Medicare.

Many Medicare Advantage plans have prescription drug benefits. The plans also have supplemental benefits, such as home health care, transportation to appointments and population health initiatives.

The average annual Medicare Advantage premium for 2019 is $336, though nearly half of enrollees have a plan with no premiums.

Pros: Less expensive than employer-sponsored plans.

Cons: You might have trouble finding a Medicare Advantage plan that accepts doctors in your area if you live a rural region.



Once viewed as a safety-net health insurance program that covered the poorest people, Medicaid has grown into an even more substantial way Americans get health insurance.

Medicaid, which is a federal/state program, covers nearly 70 million Americans. The ACA allowed states to expand Medicaid. What this did was let people up to 138 percent of the federal poverty level get coverage.

Three dozen states expanded Medicaid. Other states are also showing interest in the possibility, which is the primary reason why 15 million more Americans have health insurance since the ACA.

The costs of a Medicaid plan varies depending on your state and income. That said, Medicaid costs are much cheaper than most plans.

Pros: Low-cost plans that provide all the coverage found in regular health insurance.

Cons: Not all doctors accept Medicaid.


Individual market/Affordable Care exchange plans

The individual market could be an expensive option for uninsured Americans before the ACA. The health law made the market more affordable — though it’s usually still more costly than employer-sponsored plans.

The average annual individual premium is about $7,200. That’s quite higher than other health insurance and the premiums could be much higher depending on your state and plan.

However, the ACA helps people pay for their insurance. The IRS provides tax cuts on health insurance premiums for people at 400 percent of the federal poverty with an ACA plan.

Check out the Health Insurance Advisor to help you find an individual plan.

Pros: Cheaper alternative to COBRA.

Cons: More expensive than other plans.


Short-term health plans

Before the ACA, short-term health plans were a low-cost alternative to regular health insurance. The short-term plan market took a significant hit with the ACA, which required the plans provide the same level of coverage as regular health insurance. That coverage includes the 10 essential health benefits, including hospitalization, emergency, maternity, prescription drug, mental health and preventative coverage.

The Trump administration made a change to those plans for 2019, which allow the plans to sidestep coverage requirements once again. Most Americans are now eligible for short-term coverage. Another difference is that people can now have short-term plans for a year and renew twice. So, in effect, you could have a short-term plan for three years.

The result is lower-cost plans that can offer little coverage with hefty out-of-pocket costs. So, you may pay low premiums but will have to pay more for health care services.

Pros: Low premiums.

Cons: Fewer consumer and patient protections and potentially high out-of-pocket costs.


Association health plans

Association health plans allow small businesses and sole proprietors to band together to buy health insurance.

AHPs no longer must provide the 10 essential health benefits. Also, the Trump administration lessened restrictions on companies banding together.

These plans offer low-cost solutions but may offer limited coverage.

Pros: Low-cost alternative to individual insurance.

Cons: Fewer protections, you must meet AHP requirements.


Children’s Health Insurance Program

The Children’s Health Insurance Program (CHIP) is a state/federal program initiative that provides coverage for children whose families meet income requirements. Income requirements vary by state.

More than 9 million children are covered by CHIP, which is sometimes rolled into with a state’s Medicaid program.

Pros: Low-cost coverage and peace of mind that your children are covered.

Cons: Fewer physicians accept CHIP than employer-sponsored insurance.



How to choose a health plan

Once you figure out your options, you may find that you have multiple alternatives. For instance, your employer may offer different types of plans, including a preferred provider organization (PPO) plan and a high-deductible health plan (HDHP). Or you might have multiple Medicare Advantage options in your state.

When choosing between health plans, look at the costs associated with the plans. That includes:

  • Out-of-pocket maximums
  • Deductibles
  • Copays
  • Co-insurance

Think about how often you needed to use health care services over the past year and what you expect for the next year. You can’t predict exactly how much you’ll require, but you may be able to figure out approximately what you need. For instance, you might be starting a family or you may need to finally get help with your back or knee. Figure out what you might need and that can help guide through which plan to choose.

Then, make sure your physicians are part of the plan’s network of providers. If not, you may not be able to see the provider or will have to pay more for those office visits.

Also, think about what you want from your plan. Do you want to see any doctor and don’t mind paying higher premiums, a PPO might be a good choice. If you want to pay low premiums and don’t mind paying more for actual services, then an HDHP could be a wise decision. If you don’t care about getting a referral to see a specialist and don’t find a restricted network of providers, a health maintenance organization (HMO) plan could be right for you.

Before making your decision, check out the Best Health Insurance Companies page on Insure to read reviews of health insurance companies.

No matter which type of health insurance plan for you, make sure you go through the process to find the right health plan for you.

Healthcare, Insurance

Guide to Short-term Health Insurance

Originally published on

Most Americans have an additional health plan option in 2019. Short-term health plans are a low-cost plan. Don’t confuse them with standard health insurance plans though.

Yes, they provide health coverage, but they fall well short of what’s considered health insurance under the Affordable Care Act (ACA).

The ACA restricted short-term plans to young people and Americans who couldn’t afford any type of insurance. However, the Trump administration implemented a new policy for 2019 that will now allow anyone to apply for a short-term plan.

These are not catastrophic health plans. Catastrophic health plans are more commonly referred to as high-deductible health plans. Those plans as the name suggests have high deductibles.

High-deductible plans have low premiums and high out-of-pocket costs, but they provide all the protections of a health insurance plan. Short-term health plans aren’t considered an insurance plan because of their limited protections. They are now yearlong options with a chance to extend two more years. Short-term plans previously only lasted three months and let people renew up to a year.

Ryan McCostlin, a healthcare advisor at Bernard Health, said short-term plans aren’t for everyone, but some Americans may want to consider the plans.

“More and more Americans are saying that figuring out health insurance is more like filing taxes than buying car insurance, and the resurgence of short-term plans for 2019 is a signal that there’s just another healthcare financial planning strategy to be considered by savvy consumers,” McCostlin said.

Let’s take a look at what’s a short-term plan, what it covers and what it costs.

What’s a short-term health plan?

Short-term health plans are low-cost, low-coverage plans. Starting in 2019, these plans are available for most people up to one year with the option to extend the plans twice. In effect, you could have a short-term plan for three years. That’s unlike regular health insurance, which doesn’t have time limits.

Not all states allow short-term plans. States that forbid the sale of short-term plans include:

  • California
  • Hawaii
  • Massachusetts
  • New Jersey
  • New York

Other states have regulations that restrict short-term plans beyond the federal rules. For instance, Maryland only allows short-term plans for three months with no renewals.

What does a short-term health plan cover?

What short-term plans cover varies widely. Federal regulations allow short-term plans to create their own coverage plans without any required mandates like a regular health insurance plan. So, you may find substance abuse treatment coverage in one short-term plan, while another might cover barely anything.

The Kaiser Family Foundation analyzed short-term plans available in 2018 and found that:

  • 43 percent don’t cover mental health services
  • 62 percent don’t cover substance abuse treatment
  • 71 percent don’t cover outpatient prescription drugs
  • None of the plans cover maternity care

“They have a lot of fine print exclusions,” cautioned Betsy Imholz, special projects director at Consumers Union. “It’s worth noting that 40 percent of pregnancies in the U.S. are accidental. So, women of childbearing age need to be mindful of that excluded coverage in short-term plans.”

The ACA requires health insurance plans cover the 10 essential health benefits:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder
  • Prescription drugs
  • Rehabilitation services
  • Laboratory services
  • Preventive and wellness services
  • Pediatric services, including oral and vision care

Those are now standard parts of health insurance. Not so for short-term plans. In fact, you might have trouble finding a short-term health plan that covers most of those services.

Short-term plans vary, so you might find one that covers prescription drugs, while others don’t.

Short-term plans with more benefits will cost more than ones that provide little protection.

There’s also the issue of being denied coverage. While ACA plans require that insurers approve everyone regardless of health status, short-term plans can reject you. Some states may require “guaranteed issue,” which means a plan must cover you, but the federal law doesn’t demand that for short-term plans.

A short-term plan may reject you if you have a pre-existing condition. Or that plan may charge you exorbitant premiums. That’s not allowed in ACA plans.

More than half of Americans who aren’t in Medicare or Medicaid have some type of pre-existing condition. A short-term plan is likely not a good choice for those Americans.

Imholz said short-term plans can also cap the amount they pay to cover you annually and can limit how much it will spend on specific services, such as hospitalizations.

So, if your short-term plan covers hospitalizations, but only up to $5,000, you’ll be the hook for any amount above $5,000. That’s one reason why it’s critical to dig into what a specific short-term plan covers before signing up.

Plus, short-term plans can bring hefty out-of-pocket costs. Many short-term plans have lifetime limits on what they’ll cover. If you have a short-term plan and you’re diagnosed with a costly illness, the plan may stop paying for care after a limit is reached, such as at $100,000.

Short-term plans can also limit what they pay for specific treatments and hospitalizations.

How much does a short-term health plan cost?

You can find a short-term health plan for less than $100 a month. Compare that with the average of nearly $400 for ACA-compliant health plans. Short-term health plan premiums are 80% less on average than ACA plans.

However, Imholz said premiums are just one piece of a financial puzzle. You must also look at a plan’s deductibles, copays, coinsurance and dollar limits and exclusions of services that aren’t covered in short-term plans.

You may find that a low-cost, short-term plan may actually cost you more in the long run than an individual health insurance plan.

“There are all sort of pitfalls in these skinny plans that may not be evident at first blush and aggressive marketing emphasizing their lower premiums may make them sound tempting. But short-term plans cost less in premiums because they cover less. If you fall into one of the many gaps these plans have, it will end up costing you a lot more in the longer run,” Imholz said.

Who should get a short-term plan?

Healthy people might benefit from a short-term plan’s low premiums as long you don’t need health services.

These plans can provide you with some coverage but can lead to substantial out-of-pocket costs. A short-term plan is likely not a good idea if you plan to start a family.

“Short-term plans are not a panacea. They’re not a good fit for everyone, but they should be included in any serious analysis of healthcare financial planning,” McCostlin said.

Some major health insurers, such as UnitedHealthcare, offer short-term plans. Don’t confuse that coverage with regular health insurance. Just because a big-name insurer offers a short-term plan doesn’t mean that plan will provide you with full health insurance coverage. It’s not always easy to distinguish between plans, so it’s critical to read the fine print.

“One thing consumers can do is to ask the agent or company for a Summary of Benefits and Coverage, which is a standardized form required for ACA plans to help people compare plans. If there is not one available, that’s an indicator that it’s not an ACA-protected plan,” Imholz said.

People with any illness and pre-existing condition like asthma or diabetes should avoid short-term plans. Even if a short-term plan covers you, your pre-existing condition will likely lead to significant premiums. The plan also won’t likely provide enough coverage to make it worth your while.

However, if you’re healthy and don’t plan on using healthcare services often, a short-term plan can be a wise choice. Just hope for a year full of healthy days and little time spent at the doctor’s office or in a hospital.

Of course, you can’t predict your health for the next year. Imholz gave the example of one woman who bought a short-term plan. She was healthy so thought it was a good fit. Then, she was diagnosed with diverticulitis. The plan covered that ailment, but not the infection that arose from the condition. The plan declined to cover the treatment and deemed it a pre-existing condition. That decision left her with thousands of dollars of medical bills.

“Accidents and illness often come unexpectedly, so while you may be healthy today, life can change in an instant. If you can swing a marketplace policy, it’s a much safer, better deal,” Imholz said.

Short-term plans are also an option if you need to bridge the gap between employer plans. You can buy COBRA insurance and keep your previous employer’s insurance plan temporarily. That’s expensive though.

A short-term plan is a lower-cost alternative to COBRA or an individual plan. It’s also better than not having any coverage at all.

“There are many Americans who are choosing between short-term plans and no coverage at all. For these consumers, short-term plans can be a good fit to protect against emergencies and unexpected accidents,” McCostlin said.

Healthcare, Insurance

What is Medicare: How Do You Get Covered?

Originally published on

Medicare is a federal health insurance program that covers about 44 million Americans. That’s about 15 percent of the population.

It’s the single largest payer of health insurance in the country. People become eligible when they turn 65. It’s also available for people under 65 with disabilities or those with end-stage renal disease.

You’re automatically enrolled in Medicare when you turn 65. As you approach 65, you’ll receive information about choosing a Medicare plan. This should come three months before you turn 65. You have until three months after your 65th birthday month to pick a plan. That gives you seven months to review your options before making a decision.

The effective date is the first day of the month when you’re eligible for Medicare if you sign up in the months before becoming eligible. If you wait to sign up for Medicare on the month when you’re eligible or the following month, the effective date is the first day of the next month.

What are the different types of Medicare?

There are four types of Medicare. These plans cover specific services:

Most Medicare beneficiaries have original Medicare (Parts A & B), but Medicare Advantage plans have gained popularity over the past decade.

Now, about one-third of Medicare beneficiaries have Medicare Advantage and that’s expected to grow in the coming years.

How do you find a doctor who takes Medicare?

One of your biggest concerns with switching health insurance might be: Will I get to keep my doctor?

An easy way to find a doctor or to see if your current doctor accepts Medicare is to check CMS’ Physician Compare. The tool lets you search by the provider’s name or the group practice name. You can also look by specialty, medical condition, body part or organ system. That will help you find specialists.

Once you provide the information, the site will give you a list of local providers with profiles and specialties.

Lindsay Engle, a healthcare expert with MedicareFAQ, said doctors who accept original Medicare (Parts A & B) might not take Medicare Advantage plans. About 96% of physicians accept Medicare, but you may find doctors who aren’t in Medicare Advantage networks.

“Your plan information will tell you what type of plan you’re currently enrolled in and what providers or networks you have to use. Your best option is to contact your doctor or physician’s office to see what type of Medicare plans they accept,” Engle said.

Do I need a Medicare plan if I turn 65?

Let’s say you’re 65 and you plan to work for a few more years. You’re happy with your employer-sponsored health plan and don’t want to give it up. Do you have to get Medicare?

You could go with only a Part A policy, which is free for most Americans.

That way you won’t have to pay premiums and still have your private health plan to help you with coverage, including doctor visits.

“Your Medicare benefits will work with your employer coverage,” Engle said.

Medicare and other insurers have something called coordination of benefits (COB). COB figures out which plan pays first for coverage if you have more than one plan.

For instance, if your employer has more than 20 employees, the COB will consider Medicare coverage a secondary payer. If your company has fewer employees, your Medicare coverage is primary and the employer is secondary.

The primary insurer pays initially and then the secondary payer covers its portion up to 100% of the total cost.

Having more than one type of health insurance is called “dual insurance.” Having dual insurance can help reduce out-of-pocket costs, but also means you may have to play two premiums. Plus, you could face two separate deductibles.

“Medicare as secondary insurance will cost you money. Part B is not premium free. Some beneficiaries choose to delay their Part B coverage if they have group coverage as their primary since it covers outpatient benefits usually. Since employer coverage is considered credible coverage, you won’t be penalized for delaying your Part B enrollment,” Engle said.

You’ll want to run all of those numbers to see whether keeping other coverage makes sense for you when you become eligible for Medicare.

How do I find a Medicare plan?

Not too long ago, people turned 65 and enrolled in original Medicare (Parts A and B). Now, seniors have multiple options, including Medicare Advantage.

You can go with Parts A and B, you can add on a Part D plan or you can choose one of many Medicare Advantage offerings.

You’re able to compare plans each year and pick the best one for you. Medicare recommends members consider:

  • Costs
  • Coverage
  • Your other coverage
  • Prescription drugs
  • Doctor and hospital choice
  • Quality of care
  • Travel

You also want to make sure your doctors or hospital are considered in-network. You might even want unrestricted access and not need doctor referrals. In that case, you might want to get a PPO, which is more expensive than an HMO but gives you more flexibility.

One way to figure out the plan for you is to check out CMS’ star ratings for the different plans. CMS rates plans between one and five stars with five stars being the highest mark. The ratings take into account membership surveys, quality and performance.

Besides the prestige of earning five stars, health insurance companies get a higher reimbursement from the government when they have a five-star plan.

Medicare Plan Finder lets you compare both traditional and Medicare Advantage plans in your area. The site will ask you a series of questions that will help you narrow the number of sites that interest. It will reveal each plan that may make sense for you, including premiums, deductibles, estimated annual health and drug costs and overall rating.

Once you find the plan for you, you can choose it on the site and fill out the necessary paperwork.

Should you choose traditional Medicare or Medicare Advantage?

Which Medicare works best depends on your situation, your area and what plans are available.

Engle suggests sticking with original Medicare (Parts A & B) if you want to keep your current doctor who doesn’t accept Medicare Advantage and the plan has better overall coverage than Medicare Advantage.

“You should consider a Medicare Advantage plan if you want medical and drug coverage combined into one plan, limit annual out-of-pocket costs and extra benefits like dental, vision and hearing,” Engle said.

You may find a plan with low premiums, but remember you get what you pay for. Plans with low rates may have high deductibles and out-of-pocket costs.

If it’s your first time choosing a Medicare plan, Engle suggests speaking to a licensed agent who works with multiple carriers. The expert will consider all of your options. Don’t rely on a friend or family member.

“Medicare is always changing, part of an agent’s job is to stay up to date with the most recent changes. Also, what works for your friend or family member may not work for you. Everyone has different healthcare needs,” Engle said.

When can I change Medicare plans?

Don’t worry about getting stuck in a Medicare plan you don’t like.

All Medicare beneficiaries can switch plans once a year. This happens during the annual open enrollment. Medicare’s open enrollment runs between Oct. 15 and Dec. 7. Any changes will take effect on Jan. 1.

However, Medicare beneficiaries can make changes during any time of the year if they go through certain life events. That can include if you move or you lose other health insurance coverage.

Here are some events that trigger a special enrollment:

  • Loss of coverage
  • Changes in household, such as a death
  • Changes in residence, such as moving to another state
  • Changes to your income

If you go through an eligible life event, you can make changes during a Special Enrollment Period. Changes made during a Special Enrollment Period usually kicks in the first day of the next month.

What is Medigap?

Medicare, just like any health insurance, can get pricey. Medigap is one way to help you pay for healthcare costs.

Medigap is a supplemental insurance. Original Medicare pays for 80% of your medical needs. Medigap covers the remaining 20% and out-of-pocket costs.

This is not a health insurance plan. Instead, the policy assists you to pay for services in Medicare Parts A & B. Those costs include copays, coinsurance and deductibles.

Medigap kicks in after Medicare pays its amount for covered healthcare services.

Some Medigap plans offer coverage not available in regular Medicare. For instance, you can get Medigap coverage for when you travel outside the country.

Private companies sell Medigap policies to individuals and not couples or families. So, if you and your spouse both want Medigap coverage, you each need to buy a policy.

“If you want all of your healthcare costs covered, a Medigap plan is your best option,” Engle said.

Healthcare, Insurance

5 Takeaways From Payer Q2 Earnings Reports

Originally published on Healthcare Dive.

Second-quarter numbers for payers showed a steady engine that has withstood the strain of the past two years, most notably (the failed) Republican efforts to tear up the Affordable Care Act and other big moves from the Trump administration.

Insurers appear to have found stability and responded by expanding offerings, pulling back on others, moving into new subsectors and partnering with or gobbling up other companies.

Payer underwriting margins were strong overall with no apparent ramp up in underlying medical consumption, David Windley, managing director for healthcare equity research at Jefferies in Nashville, told Healthcare Dive.

“2Q is a critical quarter for (managed care organizations) because it is the point at which management has seen enough actual data on claims payments to assess product pricing and any unusual trends,” he said.

Here are five trends and highlights from payers’ earnings reports in the past few weeks.

1. Payers love Medicare Advantage

Payers remain bullish on Medicare Advantage. Not only are traditionally strong MA payers growing their offerings, but more minor players are also expanding in the market.

UnitedHealth Group and Humana continue to have the two largest MA member populations. UnitedHealth’s MA population increased 10.4% year-over-year after picking up 450,000 new members. UnitedHealth views MA as a significant growth area and company officials said its long-term group rate is about 8%.

Meanwhile, MA drove Humana’s second-quarter earnings, which included a 5% increase in quarterly consolidated revenues. In a move to boost its MA plans, Humana recently purchased a 40% share of Kindred at Home with the right to buy the remaining interest over time. The payer expects that adding Kindred will help with end-of-life costs.

Another insurer growing its MA footprint is WellCare Health Plans. Medicare premium revenue grew more than 17% for WellCare, which offers managed Medicaid, Medicare and Medicare pharmacy drug plans.

The company said the increase was related to buying Universal Americanand organic growth. The Tampa-based payer ended the quarter at about 510,000 Medicare members, which was a 5% increase year-over-year.

WellCare’s pending acquisition of Meridian Health Plan for $2.5 billion is also expected to grow membership in Illinois and Michigan, as well as pick up MeridianRX, its pharmacy benefit manager business. “It will position us for future growth opportunities in government-sponsored programs, and we expect the transaction to be accretive,” Kenneth Burdick, WellCare’s CEO, said during the company’s Q2 call.

Anthem also spoke positively about its MA business, reporting a 14% operating revenue increase in its government business for the quarter. That was thanks to purchasing Health Sun and America’s 1st Choice as well as growing its Medicare membership organically.

Medicare enrollment grew by 254,000 year-over-year and membership in Medicare Advantage Part D plans skyrocketed by 37%. Anthem finished the quarter with 933,000 Medicare Advantage Part D members.

Anthem CEO Gail Boudreaux said the company plans to build its membership further by increasing its county footprint while finding organic growth where it already operates. She added that the Blues payer has found that members in their commercial plans want to transition to its MA plans once they reach retirement age.

“We have a strong pipeline of commercial customers who want to stay Blue,” Boudreaux said.

2. The individual market isn’t so bad after all

The days of widespread double-digit premium increases and payers fleeing the ACA exchanges appear to be over — or at least on hold.

During second-quarter earnings calls, multiple payers spoke of the ACA exchanges positively. Centene, which expanded its ACA footprint to 16 states this year, pointed to the exchanges as a major reason for its quarterly revenue growth. The payer, which has a large managed Medicaid population, has found success in ACA plans.

Centene is also looking to add new states next and grow further in the states where it’s already located.

Another payer that focuses on at-risk populations traditionally, Molina Healthcare, said it has seen better-than-expected ACA plan membership and risk-adjusted revenue.

Molina CEO Joseph Zubretsky said the risk profile of its reduced membership is also better. Last year, Molina pulled out of Wisconsin and Utah. Now, the payer is contemplating a return to those states and expanding to North Carolina.

“The issues we had in Utah and Wisconsin were mostly related to a network that was too wide and too highly priced. And the team is working at developing a network that will support the prices that we file … We’re going to watch every bit of data emerge on 2018 to make sure we have this right and then we’ll make the call at that point,” Zubretsky said during the call.

Even Anthem, which pulled back on the ACA exchanges along with other big-name payers last year, is looking at potential minor county expansions for 2019. Boudreaux said the insurer isn’t considering significant expansion, but it may move to abutting counties while focusing on areas with current Anthem individual plans.

“I think you’ll see some county expansions, but I think more focused on the areas that we’ve been this year, so not a major rescaling, but we are pleased with the performance. And again, it is all about stability and more certainty around that marketplace. But again, this year was solid,” she said.

Despite the better-than-anticipated ACA numbers, not all payers are interested in returning to the exchanges. UnitedHealth Group ended the quarter with 60,000 fewer individual plan members than a year ago.

UnitedHealth Group CEO David Wichmann said the nation’s largest private payer, which has 480,000 individual plan members, will continue a “modest presence” in that market. “Nothing has fundamentally changed since we made our decision,” he said about the exchanges. “It was the right decision for us.”

3. Commercial market results fell for some big players

Multiple payers have seen a drop in their commercial membership over the past year. UnitedHealth Group, Anthem, Humana and Aetna all reported decreases.

UnitedHealth Group said more commercial plans are moving to risk-based contracting.

The payer’s risk-based offerings increased by 50,000 members, while fee-based products decreased by 60,000. That’s part of a trend that Wichmann predicted during the first-quarter call in April. Wichmann said half of Americans will get care from a physician with a value-based contract within a decade.

Meanwhile, two payers, Humana and Aetna, reported that what companies want from payers is changing, especially small businesses. They’re seeing small group companies moving to contracts to perform administrative duties only.

Humana’s administrative services only plans increased by 3% to 458,800 members. The payer said small group membership made up just 7% of group ASO membership a year ago and 12% at the end of 2017. It was 18% at the end of the second quarter.

Humana’s commercial membership dropped 5% to slightly more than 1 million members as it lost large group accounts in self-funded accounts, but more ASO plans partially offset the loss.

Not all payers are seeing commercial plan decreases. Cigna picked up 329,000 customers year-over-year and ended the quarter with 16.2 million enrollees. “All the indicators we’re seeing … continue to reinforce [that] we see a very attractive growth outlook in the commercial space in 2019,” Cigna CEO David Cordani said.

Cigna has focused more on commercial plans after CMS temporarily suspended the payer from offering MA plans. Cigna got the OK to sell those plans again last summer.

4. Payers are looking at public plan opportunities

While payers are seeing sagging commercial plan membership, they’re finding growth potential in managed Medicaid.

Centene recently purchased Fidelis Care for $3.75 billion, which gives the payer the fastest growing Medicaid managed care company in New York and second fastest in MA. Fidelis’ 1.6 million members are spread across the ACA, MA and Medicaid markets. Centene expects to see more than $11 billion in revenue from Fidelis.

WellCare’s purchase of Meridian will make it the largest Medicaid payer in membership in Michigan and Illinois, where it has 508,000 and 565,000 members, respectively. WellCare said the deal will put it in the leading market position for six states.

WellCare will also grow Medicaid membership after being the sole winner for Florida’s Children’s Medical Services contract. The company expects the contract will increase its Florida Medicaid annual revenue stream by $1.5 billion.

Molina picked up nearly 70,000 members in the second quarter after a recent statewide Illinois contract.

There are other Medicaid opportunities for payers too, as more states show an interest in expanding Medicaid. Boudreaux said Virginia’s upcoming Medicaid expansion brings 400,000 possible members. Maine voters also approved Medicaid expansion last year and a growing number of states are putting expansion on the ballot this fall.

However, it is not all positive news for Medicaid payers. Humana’s state-based contracts membership, which includes dual-eligibles, decreased by 13% year-over-year. The decrease came after the payer didn’t participate in Illinois’ Integrated Care program and a Medicaid membership drop in Florida. That said, Humana expects improved Medicaid membership next year after a new Florida contract.

5. Industry is in good financial shape

The second-quarter reports show that payers (and most healthcare companies, actually) are doing well financially. Axios reported that publicly-traded healthcare companies enjoyed billions of dollars of profits in the second quarter. In fact, they’re making more than in Q1, especially pharmaceutical companies. Those numbers don’t include nonprofit hospitals, which face their own challenges.

Two financial numbers that stand out are the revenue results for Aetna and Molina. Aetna stayed stagnant, but it’s also in the middle of the CVS Health merger. Plus, it enjoyed a nearly 8% profit margin in the quarter.

Molina, meanwhile, went through upheaval over the past year when it ousted CEO Mario Molina and CFO John Molina, the sons of the company’s founder. The payer also pulled back on the exchanges. Hence, the revenue drop.

Looking ahead to Q3, Windley expects more of the same for payers. He said insurance companies will begin to publicly discuss their 2019 plans during the third-quarter calls, including potential MA growth.

Here’s a breakdown of important metrics to show how payers did in the second quarter:


Revenues: $15.6 billion

Compared to 2Q 2017: No change

Profit: $1.2 billion

Net profit margin: 7.8%

Membership: 22 million



Revenues: $22.7 billion

Compared to 2Q 2017: Up 2.3%

Profit: $2.4 billion

Net profit margin: 5.2%

Membership: 39.5 million



Revenues: $14.2 billion

Compared to 2Q 2017: Up 19%

Profit: $300 million

Net profit margin: 2.1%

Membership: 12.8 million



Revenues: $11.5 billion

Compared to 2Q 2017: Up 10%

Profit: $193 million

Net profit margin: 1.4%

Membership: 16.2 million



Revenues: $14.3 billion

Compared to 2Q 2017: Up 5%

Profit: $193 million

Net profit margin: 1.4%

Membership: 16.6 million


Molina Healthcare

Revenues: $4.9 billion

Compared to 2Q 2017: Down 2.3%

Profit: $202 million

Net profit margin: 4.1%

Membership: 4.1 million


UnitedHealth Group

Revenues: $56.1 billion

Compared to 2Q 2017: Up 12.1%

Profit: $2.9 billion

Net profit margin: 5.2%

Membership: 48.8 million



Revenues: $4.61 billion

Compared to 2Q 2017: Up 7.4%

Profit: $172 million

Net profit margin: 3.9%

Membership: 4.4 million


Healthcare, Insurance

5 Payer Trends to Watch in 2018

Originally published on Healthcare Dive.

The past year has been an eventful one for payers, from the tumultuous Affordable Care Act (ACA) exchange markets to potential mega-mergers. Insurers continue, however, to keep their efforts focused on lowering healthcare costs where possible, with the intention that quality of care is not sacrificed.

Those payer efforts are working. Healthcare spending growth dropped to the lowest level in nearly two years, and hospital spending growth lags behind all other healthcare sectors. Hospital spending increased by only 0.8% year-over-year in June, which was the slowest growth rate since January 1989.

Payers have ratcheted down hospital payments by creating policies with an eye toward providing care at less-costly locations, designing health plans that put more healthcare utilization costs on members and by replacing fee-for-service payments with value-based contracts. Providers have also teamed up with insurers in partnerships that look to offer better outcomes.

Looking ahead to next year, you can expect payers to implement more cost-saving measures and push for value-based contracting. Here’s a look at five payer trends to watch for in 2018, and some tips for preparing to deal with them.

1. Payers will continue to ramp up ways to cut costs

Insurance companies have created policies, designed plans and narrowed provider networks to bring down healthcare costs. They’ve shown success. Expect payers to accelerate those programs and policies and search for more cost-saving levers in 2018.

The most public example of health insurers cutting costs over the past year was Anthem’s policies to not pay for unnecessary emergency department visits or imaging services at hospitals. Anthem’s policies looked to nudge patients to less costly outpatient facilities, including urgent care centers and freestanding imaging centers.

Michael Abrams, co-founder and managing partner at Numerof & Associates, told Healthcare Dive that Anthem’s decision to not reimburse hospital outpatient MRI and CT scans without precertification is “an important message to the provider community.” Anthem’s policy is in response to “ballooning growth in outpatient imaging — both in volume and in unit cost.”

For hospitals searching for ways to improve their bottom lines, many health systems viewed imaging as a way to make up for lost reimbursements and less utilization elsewhere. However, Abrams said the payer’s message was that medical necessity is the stronger consideration and that unit pricing needs to reflect broader market pricing.

“Many provider institutions had turned this under-regulated service line into a profit center,” Abrams said. “Anthem’s action made it clear that such actions would not be acceptable.”

Aneesh Krishna, partner in McKinsey & Company’s Silicon Valley office, told Healthcare Dive payers will likely roll out similar policies for imaging, lab, diagnostic testing and low-risk surgeries. “We see a trend toward rationalizing the levels of payments across various sites of service,” he said. “Imaging-related initiatives are the first steps in that direction.”

In addition to pushing for more services outside of hospitals, Fred Bentley, vice president at Avalere, told Healthcare Dive that he expects payers to focus on readmissions. Providers will need to manage patients post-discharge and keep them healthy in their homes rather than in hospitals.

Though not as high profile as Anthem’s policies, payers have been narrowing provider networks to bring down costs. This has been especially true in ACA exchange plans and Medicare Advantage (MA). In fact, a recent Kaiser Family Foundation study found that 35% of MA enrollees were in narrow-network plans in 2015, while only 22% were in broad-network plans.

Bentley said narrow provider networks haven’t had a huge impact yet. However, the “significant value” associated with narrow and tiered provider networks will ultimately cause more payers to expand narrow provider networks in the employer-based market.

2. Greater emphasis on value-based care and contracting

Payers and the CMS have pushed for more value-based care and payments, but it’s been slow going.

“Payers see potential to contain costs and improve quality in such contracts. However, the pace of adoption is tempered by provider resistance to taking on risk and by payer reluctance to push providers to do so before they are operationally prepared to be successful,” Abrams said, referencing findings in Numerof & Associates’ 2017 State of Population Health Survey.

Krishna believes payers may move more into bundled payments, bonus payments and capitation as it pushes providers to care for the whole patient rather than receiving payments for individual services.

Krishna said the shift toward cost-effective sites of service will require payers to align provider incentives to get the best outcomes. It also gives providers greater flexibility to choose the right care for their patients. This will additionally mean payers will need to share the right data with providers. “Increasing levels of data availability and easier integration between payer and provider systems will make the transition easier and scalable,” Krishna said.

Steve Wiggins, founder and chairman of Remedy Partners, told Healthcare Dive payers will continue to leverage payment models that encourage patients to find care in the most cost-effective locations and use those service efficiently. This will lead to more bundled payments that trigger at diagnosis rather than only at inpatient admission, which is already happening in Medicare, he said.

“Orthopedics, all post-acute services, oncology care, most elective surgeries, all episodes that patients control and a wide range of chronic conditions lend themselves to bundled payments that start at diagnosis,” Wiggins said.

3. More outpatient and virtual care utilization

Payers have been pushing more patients to outpatient facilities as a way to cut costs.

“Care delivery is moving out of the acute care setting and into the community. Such a trend is responsive to consumer demands for fast, convenient access, and it offers the potential for higher volume and lower costs in specialized clinic settings. An increasing portion of hospital system revenues comes from outpatient services, and that ratio will continue to define the progress of systems in a market-driven, value-based healthcare environment,” Abrams said.

Wiggins said innovations will also play a larger role in keeping down costs. He said shifting away from traditional delivery models and fee for service to bundled payment models will lead to more remote monitoring and telemedicine.

“Bundled payments hold great potential to become the driver of innovations that leverage the explosion of wearables, remote monitoring and greater patient engagement,” Wiggins said.

A recent KLAS Research and the College of Healthcare Information Management Executives survey found that reimbursement remains the main barrier to telehealth expansion, but Krishna said virtual care will play a bigger role in the coming year, including for initial consultations and follow-up visits that don’t require an onsite doctor visit.

“Overall, these trends will likely shift significant patient volume from higher-intensity settings to lower-intensity settings while maintaining — or in some cases even improving — quality of care or patient experience,” Krishna said.

Abrams said the cost consequences of virtual care are not fully known, but consumers want that access to providers. More virtual care could include nurses offering guidance on day-to-day health issues and physicians monitoring and visiting virtually with chronically ill patients at home.

“As larger and better capitalized healthcare systems move toward risk-based contracting, we expect to see growth in the use of such services,” Abrams said.

4. Consumers want cost, quality transparency

Consumers are demanding more healthcare cost data on procedures. A recent HealthFirst Financial Patient Survey found that 77% of healthcare consumers say it’s important or very important to know costs before treatment.

Higher out-of-pocket costs and high-deductible health plans are the biggest reasons for this greater interest in transparency. A recent Kaiser Family Foundation study found that out-of-pocket spending is outpacing wage growth.

Deductibles went from accounting for less than 25% of cost-sharing payments in 2005 to almost half in 2015. The average payments toward deductibles rose 229% from $117 to $386, and the average payments toward coinsurance increased 89% from $134 to $253 in that period. Overall, patient-cost sharing increased by 66% from an average of $469 in 2005 to $778 in 2015.

With members taking on more healthcare utilization costs, payers and employers view cost and quality data as a key to reducing healthcare costs. However, the information is not always easy to find for consumers.

Bentley said consumers are frustrated and confused by their bills. Health systems understand they need to provide pricing and outcomes information and payers like Anthem have created comparison shopping tools for consumers, he said.

That is just the start of a greater move toward consumerism as patients take on more out-of-pocket costs.

“In the new market-based healthcare landscape that is evolving, buyers will look for transparency, accountability for cost and quality across the continuum and consumer choice based on real competition,” Abrams said.

5. More payer/provider partnerships

Payers have pushed more cost controls that are affecting provider bottom lines, but there have been some moments this year when payers and providers have seen eye-to-eye. Providers and payers have increasingly worked collaboratively.

Payer-provider partnerships vary in type, size, location and model. There are 50/50 joint ventures with co-branding, and less intensive partnerships like pay for performance, accountable care organizations, patient-centered medical homes and bundled payments. Oliver Wyman found the partnerships can be broken down depending on providers’ appetite for risk.

They involve national payers like Aetna, Cigna and various Blues and new players in the payer space like Oscar Health and Bright Health.

Bentley said healthcare is becoming a “messy hybrid world” in which payers get more involved in the provider side and vice-versa. Increasingly, providers and payers are more concerned about managing patients’ health rather than viewing them as volume. Bentley said to expect more experiments and partnerships as the lines in healthcare continue to get blurred.

How hospitals and providers should prepare for these trends

Now, the important question for hospitals and providers is: What should we do to get ready?

Here are five suggestions from experts:

  • Strengthen your acute care core. Krishna suggested providers do this by addressing the acute care cost structure, improving care coordination/continuity and expanding efforts to deliver lower costs of care in post-acute care.
  • Think about a patient’s total episode of care, including what happens to patients long after discharge. Wiggins said providers should think like a product manager in industrial America who is responsible for the entire value chain. Stop organizing hospitals into specialty silos and organize around patient conditions, episodes and needs. Providers should also track behaviors and identify failures and inefficiencies in patient care. “With those insights, dive into value-based payment models, especially bundled payments that are most closely aligned with the role hospitals play,” said Wiggins.
  • Consider your approach to value-based care and long-term transition in the market. Krishna said systems need to find the right balance to move into value-based care. Moving too quickly from fee-for-service will reduce near-term earnings, but moving too slowly could leave you behind.
  • Bolster revenue cycle management capabilities to manage both patient responsibility and payer denials, said Krishna. The revenue cycle is a key aspect for hospitals, and that’s morphing as patients take on more responsibility. Tracking down patient payments is quite different from working with payers, but hospitals and health systems will need to make sure they are prepared to handle both.
  • Focus on efficiencies on operating costs. Hospitals and health systems have turned to M&A as a way to improve profit margins. Some systems like Community Health Systems, which is divesting at least 30 hospitals this year, are shedding unprofitable facilities. Health systems will need to continue that process to sell off facilities that don’t make sense financially or don’t fit a health system. “I do think it is time for them to review their portfolio of assets on inpatient and outpatient to figure out is this something we need to own,” Bentley said.
Healthcare, Insurance

How Will Expanding Catastrophic Health Plans Affect Providers?

Originally published on Healthcare Dive.

President Donald Trump’s recent executive order to expand catastrophic health insurance plans would offer a low-cost alternative to people in the Affordable Care Act (ACA) exchanges. However, there are serious questions about what they would mean for consumers, providers and hospitals.

The expansion of catastrophic plans would likely result in less utilization of providers and could increase costs as patients put off care until their medical issues are more serious, and therefore more costly. But it could also push providers to improve their patient engagement and embrace the increasing level of consumerism in healthcare, experts say.

It’s a mixed bag for payers as well. These plans could upset the balance of risk pools, but insurers can benefit from offering more options to beneficiaries.

Bret Schroeder, healthcare expert at PA Consulting Group, told Healthcare Dive there is market demand for less-costly plans. Expanding catastrophic plans could help patients who can’t afford more comprehensive plans. The downside is consumers will pay more out-of-pocket costs if they need care.

“If you’re unemployed and seeing skyrocketing premiums, this is an attempt to get care at lower costs. On the other hand, there’s a slippery slope in terms of the financial impact, which can be significant,” Schroeder said.

What are catastrophic plans?

Catastrophic plans are meant as a low-cost safety net from financial ruin. Members in those plans pay little for premiums, but also have the highest deductibles allowed by the ACA. How high? This year, the deductible was $7,150 for an individual plan and next year that increases to $7,350 per person and $14,700 for a family policy.

These plans cover you if you have a serious health issue that surpasses your deductible, but you’re on the hook for out-of-pocket costs until you reach that deductible.

Unlike his executive order to stop cost-sharing reduction (CSR) payments to insurers, Trump’s order including catastrophic plans won’t cause any changes soon. Instead, his action directed the Departments of the Treasury, Labor and Health and Human Services to “consider expanding coverage through low-cost short-term limited duration insurance,” also known as catastrophic insurance. That executive order also trumpeted association health plans.

The departments would need to partake a process of proposing rules and getting public input, which could take years. So, it’s going to be a while before catastrophic health plan expansion happens. Catastrophic health insurance is already part of the ACA exchanges, but it’s not open to everyone. The only people eligible for the short-term plan are those under 30 or with a hardship exemption or affordability exemption. Trump’s order would open up the-short-term plans to more people, possibly everyone.

Currently, the short-term plans hold a small portion of the ACA exchanges market. Out of the 12.2 million people with exchange plans altogether at the beginning of the year, only about 110,000 people were enrolled in ACA catastrophic plans.

People currently enrolled in catastrophic plans are covered for the same essential health benefits as those in the other ACA plans. However, in Trump’s executive order, he suggested catastrophic plans could be exempt from ACA provisions, which could lower costs of the plans, but also offer fewer benefits.

Trump’s proposal also looks to increase the length of the short-term plans. Now, the plans are meant strictly as a stop-gap measure to provide a low-cost option before the person enrolls in a “metal” plan in the exchanges or an employer-based plan. The ACA only allows for three-month catastrophic plans. However, Trump is looking to making them a more permanent option, with people being able to stay on the plans for a year.

What could this mean for providers and hospitals?

Rita Numerof, co-founder and president of Numerof & Associates, told Healthcare Dive studies on high-deductible health plans (HDHP), such as catastrophic health plans, show they reduce healthcare costs, at least in the short-term, but that’s not always positive.

HDHP members often delay care because those plans require the consumer to shoulder more of the cost. Delaying care can lead to long-term health problems for the patients — and less utilization for providers.

“Based on this evidence, we should expect an increase in catastrophic health plan enrollment to result in decreased utilization and lower short-term healthcare costs,” Numerof said. She added that not getting appropriate health services and not adhering to medication can cost more in the long run and lead to more severe health issues over time.

Having more patients pay a larger percentage of their healthcare bills also likely means more uncompensated care and bad debt for providers and hospitals. Stenglein said health systems are already seeing patients paying more out-of-pocket. A recent Kaiser Family Foundation study found that the average deductible for people in employer-based health insurance increased from $303 in 2006 to $1,505 in 2017.

Having people pick up a larger portion of healthcare bills also complicates the billing cycle. Hospitals and providers need to track down payments from patients rather than dealing directly with payers. That’s harder on health systems and more time intensive.

Expanding catastrophic plans may cause issues for providers, but reimbursements to hospitals and providers likely won’t see a change. Numerof said healthcare companies have already seen downward pressure on reimbursements and she doesn’t see that ending, but catastrophic plans won’t quicken that.

What does this mean for payers?

Beyond helping people between jobs, Trump views catastrophic plans as a solution to those who live in counties with only one insurer offering ACA exchange plans, people with limited provider networks and those who missed open enrollment. Nearly half of counties will only have one ACA exchange payer in 2018.

Numerof said the executive order looks to promote competition within the health insurance market and offer more choices for consumers. Numerof said the order is a step in the right direction regarding healthcare consumerism.

There are questions as to whether catastrophic plans could help insure more Americans. Gallup reported recently that the percentage of uninsured Americans increased for the first time since 2014 and is now at 12.3%. Numerof said it’s difficult to know whether expanding short-term plans might improve those numbers. “Ultimately, if the goal is to ensure everyone has access to healthcare in this county, we must first focus on bringing down the overall cost of healthcare,” she said.

Chris Stenglein, CEO of Provider Web Capital, which works on both the practice and patient side of financing, told Healthcare Dive that catastrophic plans could help people who are currently uninsured. “If you don’t have insurance today and you have a high-deductible plan, it’s better than nothing,” he said.

For payers, there is a worry that expanding catastrophic plans may result in healthy people abandoning other types of plans. This could create an unbalanced risk pool in the other plans, which will lead to higher costs for the remaining members.

However, UnitedHealthcare, for one, is speaking positively about catastrophic health plans. During a recent third-quarter earnings call, UnitedHealth officials said they are interested in both types of plans in Trump’s executive order (short-term and association plans).

What can providers and hospitals do?

More HDHPs and catastrophic plans could spark further healthcare consumerism. Numerof said more patients will demand data from providers so they can make better healthcare choices. That information could include costs and quality data for facilities, physicians and treatment options.

Consumers already have difficulty finding information about cost, quality and outcomes. That needs to change, she said.

“Consumers that are responsible for a greater share of the healthcare dollar will also expect a more convenient healthcare experience — from scheduling initial appointments and the intake process to the discussion and scheduling of follow-up treatment,” she said. She added that patients will likely prefer getting care at lower-cost settings, such as ambulatory surgery centers, retail clinics and even within their own homes. That means fewer dollars for hospitals.

Healthcare consumerism is already forcing hospitals and health systems to rethink their business models to remain viable, Numerof said.

“(Healthcare delivery executives) need to place less emphasis on site-level reimbursement and more emphasis on finding new and innovative ways to increase market share. One way to do this is by shifting elements of care delivery away from high-end, expensive settings to more convenient and affordable options for consumers,” she said.

Stenglein said greater consumerism is an opportunity for providers to engage patients. One way to accomplish this is to offer multiple payment options, including extended billing options that give patients a longer time to pay for services, he said.

Stenglein suggests caregivers remain focused on providing healthcare and delegate financial tasks to administrators, front-end staff or outsource to another company. What’s important, he said, is for providers to innovate and practice medicine and let others handle the financial aspect.

Stenglein offered these solutions for providers:

  • Implement more affordable tech-based health solutions like text messaging services or appointment scheduling apps
  • Provide counseling with onsite billing staff to make bills easier to pay and understand
  • Supply patients with estimation tools from practice management & EHR systems
  • Consider practice financing options to bridge any revenue gaps from patients
  • Offer flexible patient financing options — including longer terms — to provide more manageable solutions for families by offsetting costs

Despite the potentially negative impacts to providers and hospitals, Numerof said catastrophic plans are an opportunity for hospitals and providers to compete for business and help patients make better healthcare decisions.

Numerof said providers that will benefit from more catastrophic plans include those that:

Offer patients alternative products and services

  • Demonstrate and communicate economic and clinical value through the use of costs and outcomes data
  • Manage variation in cost and quality across the continuum of care
  • Operate efficiently
  • Show transparency about cost and quality of services

“This is an opportunity for those organizations that want to move to total cost of care and are focused on caring for patients in a more comprehensive way to compete for patients,” said Numerof.

Healthcare, Insurance

CareSource Will Cover Final County Without an ACA Option in 2018

Originally published on Healthcare Dive.

CareSoure announced Thursday it will cover the last county at risk of having no Affordable Care Act (ACA) plans in 2018. CareSource will offer health insurance plans in Paulding County, Ohio, which the Kaiser Family Foundation (KFF) said was the only “bare county” left.

The Dayton, Ohio-based payer was also one of five insurers that recently announced they will cover 19 other bare counties in Ohio. Altogether, more than 11,000 Ohioans have ACA coverage in those counties.

All U.S. counties are now expected to have at least one ACA plan option. However, nearly one-quarter of ACA plan enrollees will only have one option, which means there is no competition in those areas.

In a statement from CareSource, the company said its decision to offer plans in bare counties “speaks to our mission and commitment to the marketplace and serving those who are in need of healthcare coverage.”

Ohio Department of Insurance Director Jillian Froment said filling the bare counties has been a priority for her department. “There is a lot of uncertainty facing consumers when it comes to health insurance and these announcements will provide important relief,” she said.

The Ohio Department of Insurance said it is working with payers to finalize products and rates in the ACA exchanges next year. The department expects to complete review of insurer filings by early September, before payers must sign contracts with the federal government by late September to offer ACA plans.

Although she is pleased to have the bare counties filled for 2018, Froment said the move is only a “temporary solution and one that only applies to 2018.” She called on Congress to pass legislation to stabilize the individual insurance market. Congress is expected to take up the issue when it returns from break.

One area that is causing much unease is whether President Donald Trump will continue to pay cost-sharing reduction (CSR) subsidies to insurers. The CSR payments help ACA insurers cover lower income Americans. Trump has threatened multiple times to stop CSR payments to insurers, but so far he has ultimately paid the subsidies. Without those subsidies, the Congressional Budget Office predicted ACA premiums would skyrocket another 20%.

“Insurers are still looking for predictability in the health insurance market. Now is the time for Congress to work on reforms that will strengthen our health insurance markets in ways that improve access and affordability,” said Froment.

There was a time not too long ago when healthcare and state officials fretted about dozens of potential bare counties in 2018. That included nearly all Nevada counties. However, Nevada Gov. Brian Sandoval announced last week that Centene agreed to sell ACA plans in the 14 bare counties in Nevada. Centene also recently filled the final county in Indiana.

The St. Louis-based insurer has been expanding its ACA footprint this summer, while other major payers are pulling back or completely out of the exchanges. Centene is also entering Kansas and Missouri and expanding its footprints in Florida, Georgia, Indiana, Ohio, Texas and Washington.

Filling in all of the counties is good news, but there is still the issue of competition. Nearly one-quarter of members in ACA plans will have only one choice and another one-quarter will have just two choices. There is also concern about large premium increases. Early rate filings have already shown the negative effects of uncertainty.

Opponents of the ACA plans say the market is in a “death spiral.” However, the KFF found in a recent report the individual health insurance market is actually stabilizing, and insurers are regaining profitability. KFF warned there are “more fragile” parts of the country and uncertainty coming from Washington could destabilize the market.

So, the question remains: Is 2018 a year of transition for the ACA market that is stabilizing? Or will political fighting continue to cause unease and ultimately topple the exchanges in some parts of the country? Congress could go a long way to stabilize the market by agreeing to fund the CSR subsidies long-term and take that decision out of the hands of the president.

Healthcare, Insurance

DOJ sends warning shots on Medicare Advantage overpayments

Originally published on Healthcare Dive.

The Medicare Advantage (MA) program seems to be hitting the sweet spot, with more interest from beneficiaries as well as insurers. It now includes one-third of all Medicare beneficiaries, and a large chunk of payer profits.

With more money, however, comes greater scrutiny. And the federal government is finding reason to ramp up efforts as it issues more allegations of insurers changing diagnoses to bring in higher MA payments and covering up the actions.

Congress created Medicare Advantage as a risk adjustment payment program that pays insurers more for sicker beneficiaries. Payers in Medicare Advantage now receive a yearly fee for each enrolled member and monthly risk adjustment payments for each enrolled beneficiary, based partly on the person’s health status. This means a person with diabetes and other chronic health conditions will bring a larger monthly reimbursement than someone who needs few services.

Such a program is open to fraud. CMS estimated that it overpaid $14.1 billion in 2013 to MA organizations. Medicare Advantage payers received about $160 billion in 2014 for approximately 16 million beneficiaries. CMS estimated about 9.5% of those payments were improper.

Intensive coding

Kip Piper, an expert on Medicaid, Medicare and health reform, told Healthcare Dive plans differ in their internal capabilities and data quality. “Each insurer is incentivized to make sure their data supports the highest risk score — as high as can be justified but of course no higher,” he said, adding, “Sometimes insurers will ‘leave money on the table’ because they are unable to show that their risk score really ought to be higher.”

Timothy Layton, an assistant professor at Harvard Medical School who researches the health insurance markets, told Healthcare Dive Medicare Advantage overpayments are driven partly by fraud, but mostly by “legal intensive coding.”

“CMS has a fairly broad definition of an acceptable diagnosis. Each diagnosis just needs to be justified by some record from a face-to-face encounter with a physician. This allows insurers significant ability to maximize their risk scores without resorting to fraud,” he said.

Layton said there is fraud, but that’s “small potatoes” compared to excessive payments because of intensive coding. “It’s also small relative to the massively inefficient expenditures insurers are investing in coding that has basically no social benefit whatsoever,” he said.

UnitedHealth cases

The U.S. Department of Justice (DOJ) is involved in two high-profile False Claims Act cases involving one of the largest health insurers. The DOJ joined two lawsuits involving UnitedHealth Group (UHG), which is the largest Medicare Advantage payer with more than 50 Medicare Advantage and drug prescription plans.

The lawsuits allege UHG overcharged the federal government for Medicare Advantage. In 2016, CMS reportedly paid UnitedHealth $56 billion for covering 3.6 million Medicare Advantage beneficiaries.

Two whistleblowers have said UnitedHealth changed diagnosis codes to make patients seem sicker. These “data-mining projects” can raise Medicare reimbursements by nearly $3,000 for every diagnosis. The suit alleges that employees collected bonuses for making these changes.

The lawsuit said UHG didn’t notify the CMS of at least 100,000 invalid diagnoses that caused it to overpay. Those incidents alone led to $190 million in overpayments, according to the lawsuit.

UnitedHealth Group denies the claims. “We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with CMS about our approach under its unclear policies. The complaint shows the Department of Justice fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works. We reject these claims and will contest them vigorously,” Matt Burns, UnitedHealth spokesman, told Healthcare Dive in a statement.

Piper said he expects a “long, protracted and expensive battle” involving these cases. The case is complex because the payments are from years ago and federal policies were “particularly muddy back then.”

If United were to lose, Piper expects a multi-billion dollar payment and a corporate integrity agreement with the HHS Office of Inspector General that would include oversight and imposed processes to make sure it doesn’t happen again.

Piper doesn’t think the cases would hurt UnitedHealth financially because the large payer is “well-capitalized and in a position to cover the loss if it comes to that.”

Piper doesn’t expect the CMS would restrict UnitedHealth’s participation in Medicare Advantage or Part D because of its market size. Such restrictions would affect millions of beneficiaries.

“It will, and likely already has, resulted in greater scrutiny of United’s practices in regards to risk adjustment. But federal policies have tightened. All Medicare Advantage plans are now on guard to be extra cautious and take steps to support risk scores with data, analyses and independent verification or audits,” said Piper.

DOJ investigating other MA insurers

Investigators will follow the money, and with billions of dollars at stake, Medicare Advantage plans now get extra attention, undesired by payers. False Claims Act cases and settlements have become relatively common.

Chief Counsel to the Inspector General Gregory Demske of the HHS Office of Inspector General said his office will continue to make sure “Medicare Advantage insurers . . . play by the rules and provide Medicare with accurate information about their provider networks and their patients’ health.”

Being the largest Medicare Advantage payer puts a large bull’s-eye on UHG’s back, but investigations into overpayment to Medicare Advantage payers aren’t just connected to UHG. Investigators are also checking into other Medicare Advantage payers, including Aetna, Cigna, Health Net and Bravo Health.

Also, Freedom Health, another Medicare Advantage payer, agreed to pay $31.7 million to settle a False Claims Act case after the Tampa, Fla.-based insurer submitted or caused others to submit “unsupported diagnosis codes to CMS,” which led to larger than owed reimbursements from 2008 to 2013. The company reportedly made “material misrepresentations to CMS regarding the scope and content of its network of providers” in applications in 2008 and 2009, said the DOJ.

Congress is also interested in the overpayment issue. Sen. Charles Grassley, chairman of the Senate Judiciary Committee, sent a letter to CMS Administrator Seema Verma in April questioning what CMS is doing to “implement safeguards to reduce score fraud, waste and abuse.”

Grassley said there was about $70 billion in improper Medicare Advantage payments between 2008 and 2013 because of “risk score gaming.”

“CMS must aggressively use the tools at its disposal to ensure that it is efficiently identifying fraud and subsequently implementing timely and fair remedies,” Grassley wrote.

What should MA payers do now?

Layton said payers need to be more careful about submitting only justified codes. This will mean more payer oversight, which will lead to more costs for them and healthcare in general.

“They’ll just switch from trying to derive codes out of thin air to trying even harder to get docs to write things down. Given that the fraud was likely for cases that could have been justified with a written record with a bit more effort, they’ll likely just exert that extra effort. Unfortunately, the cost of that extra effort will represent additional socially wasteful spending on top of an already enormous amount of waste,” he said.

Anand Shroff, founder and chief development officer at Health Fidelity, told Healthcare Dive that health plans need to focus on risk adjustment coding accuracy to ensure they submit information to the CMS that’s substantiated by documented clinical evidence.

“Medicare Advantage insurers use outdated risk adjustment coding methods, including archaic data acquisition and document review systems. They should invest in the latest risk adjustment technology solutions that pull together patient risk factors and clinical evidence for accurate results using advanced technology, such as natural language processing and clinical analytics,” said Shroff.

Piper said some payers have already adapted its systems and staffing to improve risk adjustment payment compliance.

“Financially, risk adjustment plays a critical role in how plans are paid. This will only increase if CMS moves forward to improve the risk adjustment methodology to increase its accuracy and to better adjust for socioeconomic factors that heavily influence patient complexity and utilization,” he said.

Piper offers a few suggestions to payers involved in Medicare Advantage. Payers need to work closely with the CMS to work out technical issues and have the federal government agency understand how the plans operate and how federal guidance impacts the plans.

Piper said payers need to collaborate with providers to improve “the completeness and accuracy of their claims and encounter data and underlying medical records, including full use of electronic health records.”

MA plans should also consider using “red teams” to test their management and controls, look for compliance weaknesses and identify policies, systems, incentives and even cultural factors that may unintentionally encourage gaming or create risks, said Piper.

“Part of this, frankly, is having a multi-disciplinary team of in-house and outside experts — white hats — thinking about risks and vulnerabilities and then closing them,” he said.

Improving education and training and removing corporate silos, as well as hiring regulatory experts can also help payers, said Piper.

“A surprising number of companies that do business with Medicare or Medicaid have few, if any, board members with real-world government experience or policy expertise. Companies need to bring that talent in at the board level, just as they do at management levels,” he said.

Healthcare, Insurance

Uneasy Payers Seek More Guidance as ACA Exchange Deadline Nears

Originally published on Healthcare Dive.

As the June deadline for payers to decide whether to continue in the Affordable Care Act (ACA) exchanges and set their rates is approaching, insurance companies are running the numbers, reviewing their member populations and analyzing how they’ve made out on the exchanges market over the past year. But it’s not just their numbers that are influencing the decision.

What’s happening in Washington is also playing a major role — specifically, whether Republicans will pay cost-sharing reduction (CSR) payments to insurers. The payments help insurers cover lower income Americans.

Last week Trump reportedly told staff he was still considering withholding payments to push the hands of those reluctant to support the AHCA, so payers and patients advocates are quite leery of what would happen to the exchanges market if CSR subsidies stop.

Without those payments, insurance companies warn of higher rates and more payers dropping out of the exchanges market.

Beth Fritchen, partner at Oliver Wyman Actuarial Consulting, told Healthcare Dive that the best way to describe payers in the exchange market is “hesitant.”

“CSR is definitely something people are looking at and watching for,” Fritchen said.

Payers are also waiting to see the Senate’s healthcare reform, which will likely look quite different than the House bill.

ACA exchanges market stabilizing

You wouldn’t know it from the drumbeat from Washington, but one recent study found that the ACA exchanges market is stabilizing after years of losses.

A Kaiser Family Foundation study found that the individual market insurers’ medical loss ratio, which is the percentage of premium dollars that an insurer spends on medical claims, dropped 7 percentage points between 2015 and 2016 to 96%. That’s the best number since the ACA created exchanges, but is still higher than the 85%-90% figure needed to make the individual market profitable.

Despite those improved numbers, payers are still uncertain about the exchanges. Insurance companies usually don’t like the unknown, but that’s what they’re facing in the healthcare industry and specifically the individual market.

Brian Wright, senior financial professional at communications and advisory firm ICR, told Healthcare Dive that the unease comes because payers need a risk pool that doesn’t change dramatically from one year to the next.

The Center on Budget and Policy Priorities said the uncertainty will lead to higher rates and fewer insurers willing to continue in the exchanges. To stabilize the market, the group suggested Congress stop talking about repealing the ACA and focus on improving the current law.

Stopping short of agreeing not to repeal the ACA, there are other ways that Congress can help stabilize the market. America’s Health Insurance Plans President and CEO Marilyn Tavenner spoke before the Senate Committee on Health, Education, Labor and Pensions in February about the need to stabilize the individual health insurance market. Tavenner gave short-term and long-term solutions that she said would create “lower costs, more choices and better quality care.”

For this year, AHIP suggests continuing the CSR payments, creating premium tax credits, which help make coverage more affordable, and fully pay federal reinsurance payments for 2016. The reinsurance program helps cover high-need people, including those with chronic conditions.

Who’s in, who’s out for 2018?

As some payers have announced they are cutting back on the ACA exchanges or even pulling out completely in 2018, those who support repealing the ACA have stoked that instability to their advantage. ACA foes say payers pulling out shows that the exchanges are in a “death spiral,” but others point to the ACA foes as the ones promoting the fears, which lead to uneasiness.

So, where are we at this point in the ACA exchanges market? Aetna announced it is leaving the exchanges in its remaining states — Delaware, Nebraska, Iowa and Virginia. The payer said it could lose $200 million this year for its individual insurance after losing nearly $700 million between 2014 and 2016.

Wellmark Blue Cross Blue Shield is another payer that’s completely dropping out. The company will drop the exchanges plans for next year after reportedly losing $90 million from them over the past three years. Wellmark already dropped out of South Dakota’s exchanges last year.

A former big player in the exchanges market, UnitedHealth, scaled back from 34 states to three this year. For 2018, the company said it will remain “in only a handful of states.”

Not all payers are leaving the exchanges. CareFirst BlueCross Blue Shield plans to stay in the Maryland, Virginia and D.C. exchanges despite losing $500 million on the exchanges so far and another $100 million expected this year. Though the payer is staying, CEO Chet Burrell said the insurer plans a 58% increase for individual insurance plans next year.

BlueCross BlueShield of Tennessee announced last week that it planned on moving back into 16 counties in eastern Tennessee that would not have had any insurers in the exchanges after Humana announced it was pulling out in 2018. Humana is down to fewer than 200,000 members in the individual market in 11 states this year and plans to stop offering all ACA exchanges plans in 2018. Instead, it will redouble efforts on Medicare offerings.

Anthem is also expecting to stay in the exchanges. The company, which has 1.1 million members in ACA exchanges, is working on 2018 rates.

Kaiser Permanente is also staying onboard. Though acknowledging the market instability, Chief Executive Bernard Tyson recently said the market isn’t in a “death spiral.”

Will more drop out? Oliver Wyman conducted a survey in early April and asked insurers about the 2018 ACA exchanges markets. Of all the payers surveyed, a “vast majority” said they are committed to the exchanges, though they are still cautious. Only one survey respondent said it plans to leave the exchanges.

The survey also found that 70% of respondents expect to stay in the exchanges without any major strategy shift in 2018. The remaining 30% said they are looking for ways to stabilize their ACA lines of business, including modifying plan offerings, such as eliminating gold-level plans, and changing to plans with tighter benefit design, such as HMOs or narrower network plans, according to the survey results.

Nearly half of respondents said early April was too early to determine rate increases. However, for those that were ready to set rates, half of respondents said they plan to increase rates by 10% to 20%. One-quarter said they planned to increase rates by less than 10% and the other one-quarter said they expect to raise rates more than 20%. The average rate increase was 22% in 2017.

Fritchen says that disparity isn’t surprising given the exchange market’s fluidity. That said, Fritchen says payers are cautiously moving forward and some states have even said they will allow insurers to set rates and then change them if there is a new development, such as no CSR payments.

“Their number one goal is solvency,” she says.

The survey results found that payers plan to wait as long as possible before setting 2018 rates in hopes of getting more guidance from the government.

One important thing to remember about the survey is that it was conducted in early April. The longer payers don’t get reassurances that CSR payments are on their way, the more instability for the market and the greater likelihood that some payers may decide to drop out.

How much will rates increase? Cori Uccello, senior health fellow at American Academy of Actuaries, told Healthcare Dive “premium rate changes for 2018 will vary by state, and will reflect cost trends and changes in expected enrollment and composition of the risk pool.”

Uccello says factors that will affect decisions include the CSR payments, “whether the individual mandate is enforced, and the effects of new regulations that shorten the open enrollment period and tighten special enrollment rules.”

Payers will also soon know what risk-transfer payments they’re getting from the federal government. These numbers traditionally come at the end of June. The payments pay insurers for coverage, which keeps premiums and out-of-pocket costs lower than if there were no payments. You can expect rates to jump if the federal government decreases those payments.

Payers to watch

There are insurance companies whose decisions will greatly influence the ACA exchanges debate. Here are three payer decisions to watch, whose decisions could cause people with no option in the exchanges:

  • Anthem — The only payer in 59 counties in Kentucky.
  • Centene — The only option for all exchanges in Mississippi.
  • Cigna — The only insurer in 14 counties in Tennessee.

If any of these three pull out of those markets, there could be counties with no insurer option in the exchanges market, which could cause panic and send states scrambling. An insurer pulling out of those counties could lead to more uninsured or people going onto Medicaid, which will affect payments to hospitals and doctors.

What do unease and fluctuations mean for healthcare industry as a whole?

CSR payments don’t directly affect hospitals and doctors. These payments help payers cover lower income Americans. However, cuts to the CSR payments would lead to rate increases for individuals.

It could even cause payers to leave the exchanges. If rates skyrocket or if payers pull out, more Americans could be uninsured or go onto Medicaid, which has lower reimbursement rates than private payers. At that point, hospitals and doctors would feel the pain of uncompensated care and lower payments.

How does location affect payer decisions about whether to stay in exchanges?

Before the ACA, there was wide variety in regard to state regulations. Some states required certain types of coverage, while others had fewer mandates. The ACA leveled out a lot of those regulations and created a single risk pool.

However, states do vary in terms of population, cost, competition and provider networks. Payers with experience already in particular states know the market, the competition and how to price rates adequately. Highly competitive exchanges markets actually bring in more payers.

A recent Robert Wood Johnson Foundation study found that more competitors lead to lower premiums. Regions with only one or two insurers “tended to be sparsely populated and heavily concentrated in southern states.”

States with fewer rate fluctuations bring in more payers, said Fritchen.

Payers look at pricing, network strength and their relationships with provider networks when deciding whether to stay in a market or expand into another one.

“For the most part, they’re going to look at their block of experience to date and can they sustain any losses or can they fix it,” said Fritchen.

The future of the individual market

No one knows what plan the Senate will bring forward. There is only a two-vote swing in favor of the Republicans so the Senate will need to create a plan that doesn’t lose more than two Republican votes unless they get Democrats to support their plan.

Centralist Republicans will push for a similar ACA system or maybe even tweaks to the current system. They will also want to avoid Medicaid cuts. Conservatives, on the other hand, will want Medicaid cuts and will look to completely repeal the ACA.

Threading that needle will likely mean an even more difficult process than the onein the House, which narrowly passed the AHCA earlier this month.

What they decide and whether the government will continue to fund CSR payments will be major factors as to whether payers continue in the ACA exchanges or flee the market.


Cheapest Car Insurance by Age and State

Originally published in Go to the CarInsurance page to see the complete work, including search about charts.

Lowest insurance rates by age and state

South Dakota, North Carolina and Idaho have the cheapest car insurance rates in the country among six age groups, based on a rate analysis by

Here are the cheapest states for car insurance by age group:

Age State with cheapest average yearly rate
20 North Carolina — $654
30 Idaho — $570
40 South Dakota — $537
50 South Dakota — $508
60 South Dakota — $479
70 South Dakota – $506


Location plays a major role in the cost of insurance. Our analysis found that rural states are more likely to have lower car insurance rates than congested states with large cities and suburbs.

When creating rates, car insurance companies look at the cost and frequency of claims in areas. Places with more crime, such as car thefts and break-ins, usually have higher rates than low-crime areas.

South Dakota is an example of a rural state that has some of the cheapest car insurance rates in the country. The state’s minimum car insurance requirements are similar to other states so what makes South Dakota so inexpensive?

South Dakota Insurance Director Larry Deiter says low auto thefts and the rural nature of the state helps. Its residents also have some of the “highest average credit scores” in the country. In most states, car insurance companies can factor a person’s credit score when devising car insurance rates. Insurers believe a strong credit score means the person is a lower risk than someone with poor credit.

Deiter lists another possible reason.

“Much of the population tends to drive pickup trucks or SUVs, which have higher safety ratings,” he says.

Another state with low rates is North Carolina. We found that North Carolina has the lowest rates for 20-year-old drivers.

Teen and young adult drivers often pay the highest car insurance rates. Insurers view young drivers as risky because they are inexperienced and may take more risks than a middle-aged driver.

The North Carolina Department of Insurance tells that one reason for the low car insurance rates for 20-year-olds is that insurers in the state only have a high-rate period for three years from ages 16-18. Other states stretch out that period for seven or eight years, which means higher rates for drivers well into their 20s. So, 20-year-old North Carolina drivers don’t get hit with the same high rates as other states.

The low rates may be coming to an end in North Carolina. The North Carolina Rate Bureau requested a 13.8 percent average increase after not raising rates since 2009. If that’s approved, car insurance rates will increase for all drivers, including 20-year-olds.

So, which states have the cheapest car insurance? We drilled down by age group to show how states fare in each age group.

State averages are based on rates for nearly every ZIP code in each state for each age group for three coverage levels.

Cheapest car insurance for 20-year-olds by state

As mentioned above, North Carolina is the cheapest car insurance for drivers age 20. It wasn’t even close.

Here are average rates for drivers age 20:



Cheapest car insurance for 30-year-olds by state

The cheapest car insurance for 30-year-olds is the largely rural state of Idaho. Fewer cities and metropolitan areas often mean lower rates for a state. Why? Because cities usually have more auto thefts and break-ins than small towns and villages.

Here are average rates for drivers age 30:


Plus, adding a teen driver to your insurance policy can cost in the thousands. Before adding your teen to your policy, it’s a good idea to request rates for car insurance companies to see who charges the least for teen drivers.

Here are average rates for drivers age 40:


Cheapest car insurance for 50-year-olds by state

The home of Mount Rushmore and Wall Drug Store tops the list for 50-year-olds with Idaho and Iowa a close second and third.

Here are the average rates for drivers age 50:


Cheapest car insurance for  60-year-olds by state

The same three states have the cheapest car insurance rates for 60-year-olds.

Here are average rates for drivers age 60:



Cheapest car insurance for 70-year-old by state

South Dakota tops the list again but is joined by the one and only Northeast state (Maine) to make the list. Maine has the oldest population with a median age of 44 years old, which is nearly seven years older than the national average. Those older Mainers are enjoying low car insurance rates.

Here are the average car insurance rates for 70-year-olds:



How age affects car insurance rates

Young drivers pay the highest car insurance rates because of their inexperience and greater risk of getting into accidents.

Car insurance companies want to reduce the number of claims paid out, so those in age groups that are considered the riskiest have to pay the highest rates.

As you spend more time behind the wheel, your rates will likely go down unless you file multiple claims. Once drivers get into their 30s and 40s, they should see their car insurance premiums drop.

Plus, as you age, you are eligible for auto insurance discounts that bring down rates. Car insurance discounts include bundling your home and car insurance, good driver, and loyalty when you stay with the same insurer for a long time.

Now, here’s the bad news — your rates will likely begin to increase again once you hit your senior years. Elderly drivers are considered riskier than middle-aged drivers. Older people’s reaction times may slow, which can lead to accidents. That means higher car insurance rates for the older age groups.


Shopping for car insurance

No matter your location or age, it pays to shop around for car insurance. Insurers price the same policies differently based on their respective formulas. Each insurance company has a different algorithm that weighs risk factors. That’s why costs vary and it’s important to do a car insurance comparison before you buy.

For instance, one insurance company may charge a lot more if you get speeding tickets, while another may not raise rates that much. Another example is one insurer may charge higher rates for young drivers or motorists who live in cities, while another might give you a break.

It’s a smart idea to get car insurance quotes from at least three car insurance companies every couple of years. Provide multiple insurers with the same request, including coverage levels, and let them compete against one another. Make sure you take everything into account, including loyalty discounts or new customer discounts, when making the decision as to the right car insurance company for you.