Category News

smokers_life_insurance_quotesAre delays become the norm for health care reform?

A glitch in the health care reform law might be giving smokers a break from tobacco-use penalties which would cause their premiums to become too expensive.

The Obama administration has informed health insurers that there is a problem in the computer system  that will limit the penalties the insurers can charge smokers, and it will take at least a year to fix the issue. This does not impact the opening of marketplaces on October 1 though.

Before the glitch, it would have been possible to charge a 65 year-old smoker more than three times the premium of a 21 year-old smoker, but now if an insurer tries to charge more, the submission will be rejected by the system.

While the health care reform law requires insurance companies to accept all applicants regardless of pre-existing conditions, it does allow them to charge smokers up to 50% higher premiums as a way to ward off bad risks.

Are you wondering what that means for older smokers? For example, let’s say the premium for a standard silver insurance plan was $9,000 per year for a 64 year-old non-smoker. For a smoker of the same age, the premium could be $13,600, and the smoker could not use any available tax credits to help pay the premium and offset the smoking penalty.

What do you think about penalizing smokers in health care reform?

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6093699369_a6fa0338d7_oUsually, I don’t like to use the term “Obamacare” but it seems that most Hoosiers know of the Affordable Care Act by that terminology.

Right now, Health Care Reform looks like it is starting to unravel. The announcement of the delay in the employer mandate raised concerns. On one side, it looks like the administration is scrambling with the implementation of the law. On the other side, the administration is starting to realize the negative impact that the mandate is going to have.  The administration has had ample time not only for putting the law in place but to understand the full effects of the law.

When we look at the Health Care Reform law, we see that it is based on concepts. These concepts may or may not work in the real world. The center piece of this law is the development of the exchanges.  We are starting to see what these exchanges are going to look like, and they look similar to Medicaid policies. There are going to be HMO lookalike networks. On the positive side, the premiums are going to be subsidized by the federal government.

The real life issue issue is this: will enough healthy people sign up?

It has now been proven that healthy people will pay higher premiums. This is a tough situation. Most people in their 20’s usually go without health insurance unless offered and paid for 100% by their employer.  If we don’t get enough young healthy people to sign up for coverage, then the exchange will have adverse impacts or a downward spiral to death.  This is a situation that would happen if only sick people take out coverage and their high claims increase premiums for everyone else. This is the main reason we are not seeing more carriers participate in the exchanges.

In the next year, we will see fully insured health premiums increase anywhere from 30%-50%. This is because the law mandates a high level of coverage. Lower deductibles, out of pockets and the essential health benefits will all add to the increase. Then add another 3.5%-7% in taxes on the premiums.  We will see Indianapolis small businesses make decisions that are based upon these increases. It’s predicted that a lot of small business will drop their group health insurance and send the employees into the individual market. The other option is that the company may choose to self-fund their health plan. The company would then take on a calculated risk of paying their own claims up to a stop loss limit.   No matter what, a tough decision will have to be made.

When we look at Medicaid, only half of the people that are eligible take the plan. Here is a situation in which people get free health insurance but don’t take it. This shows a possible flaw in the Obamacare approach. Even with artificial markets being created inside the exchanges, people still may not participate. The exchanges then turn into a high risk pool with a expiring shelf life. That is when we will have to deal with all the unintended consequences of the law.

What are your thoughts about “Obamacare” and the impact it will have on our society?




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WideModern_healthinsurance_130703620x413One of the main points of the health insurance reform law was the employer mandate.

The Employer Mandate is a requirement for companies with over (or the equivalent of) 50 full time employees to provide group health insurance. If the group does not provide health insurance, they would pay a $2,000 penalty per full time employee. If the employer offered a group health plan that did not meet the requirements of the new law, then the company could be penalized $3,000 per employee.

Under the employer mandate, if an employee works more than 30 hours a week, then the employer must provide health benefits or pay a $2,000 penalty. This has been a huge nightmare for Indianapolis corporations.  There are a lot of local based companies that have a higher hour requirement than 30 hours a week to be eligible for benefits. We have seen a lot of companies move employees that were over 30 hours a week to below the 30 hour mark. Essentially, there has been a trend of pushing employees to part time status so that companies can stay in business.  We have seen multiple industries forced to make difficult decisions based on the employer mandate.

It’s difficult for policy makers to understand the true cost of insuring employees. In a lot of self-funded cases, it’s not about the premium, but it’s about the claims. There are also a lot of industries that have had a difficult time sponsoring a group health plan because of cost and participation.  The employee can’t afford to pay the premiums and the employer’s business model does not include a benefit package.

The employer mandate would have a negative impact for all of these industries. The frustrating part about this is the current administration has down played these issues since the inception of the law. The fact that they have finally looked at possible impacts is a good start.





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Screen Shot 2012-11-27 at 4.40.23 PM-resized-600One of the key aspects of the new health care law is the Adjusted Community Rating.

Currently, the health insurance industry uses gender, medical history, group size, and health status. These underwriting practices will be prohibited in 2014. With the new law, health insurers in the individual and small group markets will only be able to adjust premiums by family size, geography, tobacco use and age.

Premium ratings for age will be limited to three to one. This limits the amount an older individual will pay to no more than three times what a younger individual pays in premium dollars. Tobacco users, on the other hand, could see an increase in premiums up to 50%.

With these changes, it is projected that many small businesses and individual products will have substantial rate increases.

A small group that is young and healthy will see a large increase to offset the older and high-utilizing groups, where the high-utilizing groups may see only small increases. The individual market will experience vary large rates increase because there will no longer be underwriting.

So how do we offset these rate increases?

If you are have no access to a group plan, then applying for coverage through the exchange may reduce costs. The Indianapolis Federal Facilitated Exchange will have tax credits that can help reduce your monthly premiums if you qualify.

Many small companies may have tougher decisions. Small companies will be faced with 30-50% increases in group health insurance costs.  One option would be to look at the exchange for a possible tax credit on the group side. Another option would be a self-funded small group plan.

The third option would be to look at a defined contribution approach, in which an employer can determine up-front how much to contribute to the employees’ health insurance. This offers employees more choices and better choices than they currently have. Employees would no longer be limited to their employer’s “one size fits all” insurance choice.

Have more questions? You can contact us here and we can help get the right plan for you!






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medical_mutualMedical Mutual of Ohio has decided to exit the Indianapolis market for group and individual health insurance.

This is a real blow to competition in the small group and individual health insurance market. Medical Mutual was a good carrier in the small group market, which gave a nice level of competition  to the national carriers. They had plans designed that were not only unique but saved small groups money.

From an administrative standpoint, they were also very easy to deal with. They had launched their own network in Indianapolis, which started to get deep network penetration.  All in all, Medical Mutual was a good alternative small group health insurance carrier.

They have stopped taking new business as of July 1st. All individual policies will end December 31st 2013 and all group health plans will end June 30th 2014. If you have an existing policy with Medical Mutual it will be business as usual. There should be no disruption in claims or administration.

If you have an individual policy with them, it may be time to start looking to move that policy. On the group side, waiting until your renewal date may be the best option. If you are not comfortable with that, then we can move you now.

Why has Medical Mutual pulled out of the Indianapolis market?

This is a decision made due to Health Care Reform under the Affordable Care Act.  The smaller health insurance companies are scrambling because they don’t know what is going to happen in 2014.  Under the ACA, there will no longer be underwriting, which insurance companies have used as a way to control risk since the inception of insurance. Under the new law, underwriting is taken out of the equation.

There are also some real concerns that the small group health insurance market will drop off. With guaranteed issue in the Individual market along with Federal Subsidies inside the exchange, many small companies may choose to drop coverage.  It may also be a decision they are forced to make because of cost increases.  We may see small group health insurance rates spike up to 50%. Very few employers will be able to absorb that kind of price increase.

The new health care laws are suppose to increase competition! As a broker, we are seeing the exact opposite. The bottom line is you still want to find the best policy in 2014. It may come from inside or outside the exchange. You may look to a fully insured health plan or a self funded group health plan. If you need help finding a plan, contact us to find the best solution for you!







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link-exchange-placeWe’re less than 100 days away from the Indianapolis Federal Facilitated Exchange opening.

There are two very big things that need to happen before October for the exchanges to be fully operational.  The first one is from a technical standpoint; the government still needs to complete the infrastructure of the exchange. This will enable government agencies to transmit information between one another to see if one is eligible for subsidies. This is an enormous task because  Health and Human Services, Treasury, Homeland Security and other agencies will have to communicate with one another, and this has never happened before.

The next technical aspect is to finish the online portal for the Federal Exchange which will be operating in Indiana and many other states.

Let’s say that all of these technology issues are solved and tested. The next big issue is going to be outreach. Most have no idea how the exchanges are going to work.  Currently there are very few brokers that are touting the benefits of the exchange for Hoosiers. Luckily, we are!

It’s our belief that  many Hoosier families will benefit from the subsidies offered in the federal exchange. Contact us today to be prepared for Health Care Reform.


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the_exchange_FINAL.wideaAccording to this article from WSJ, health insurance exchanges are falling behind schedule, and there is a risk that they won’t be ready to open in time by October.

There are multiple news organizations that are commenting on the two reports from the Government Accountability Office.

“Whether [the government’s] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined,” said the GAO in twin reports released Wednesday.

The report states that the exchanges are about 44% behind meeting key milestones of establishing the exchanges. So what does that mean for Indianapolis?

It has been predicted that about 900,000 Hoosiers will benefit from getting their Insurance from the Federal Facilitated Exchange. The way the exchange would work is that people who do not have access to affordable group benefits could apply for advance tax credits or subsidies. These subsidies would pay a portion of the health insurance premium thus bringing down the cost of health Insurance in the Individual market.

If you make under 400% of Federal Poverty level then you could qualify for subsidies. A single person making less than $45,960, or a family of four making less than $94,200 will qualify.  Looking at those numbers, there are a lot of Hoosiers that can benefit from these subsidies.

It has already been announced that there will be a delay in the full establishment of the small group exchange plans, also known as SHOP.  What is going to be offered to small groups under 50 employees is the option of purchasing your group health insurance through the exchange. For groups under 25 employees that meet certain requirements, there will be tax credits available.  These tax credits could be very valuable in a company that is planning on keeping a group health plan.

If the exchanges are not up and running in October, it could result in many Hoosiers being delayed from enrolling online. Here is what Nefouse & Associates is willing to do if the online enrollments are delayed.

We will go back to paper applications. We will use the paper application that has been established to apply for subsidies. We will send that application by snail mail to the government and follow up with them to make sure it’s being processed. Once processed, then we have you apply for the individual health insurance policy from a carrier like Anthem that we know will be in the exchange. We will follow up with both the carrier and the government to make sure our clients are able to take full advantage of the new law.


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mzl.yzozlmve.320x480-75You’ve probably heard the saying “there’s an app for that,” and now there’s an Anthem app for your health care.

Anthem just released their new smart phone app for all subscribers. This cutting edge technology is a great tool for you and your family to have at your fingertips.

The app has multiple useful functions. First of all, you are able to save a copy of your insurance cards. By using the app, you can walk into the doctors office and simply email a copy of the card right on site.

The app also give you the function to find a doctor, urgent care, specialist or pharmacy in network with turn-by-turn directions. To be able to find an urgent care doctor in network is an extremely valuable tool in the Indianapolispolis metropolitan area. Urgent care centers have always caused network problems for these residents, so this technology can save you and your family money by giving you the correct in network provider.

To be able to easily and quickly locate all of this information anytime, anywhere makes life simpler and more convenient

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HealthInsurancePlansWe’re finally starting to get a glimpse into the future of health insurance under the Affordable Care Act.

Post 2014, there will be no underwriting in the small group or individual health insurance markets. Underwriting has always been the key tool for insurance companies to control risk. Underwriting is the use of medical or health information in the evaluation of an applicant for coverage; an individual’s health information may be used in deciding whether to offer or deny coverage and what premium rate to set for the policy. Once 2014 hits, that tool can no longer be used by law. If the industry cannot underwrite, then they will control cost by managing care.

Many people may have experience with an HMO (health maintenance organization plan) and now we are seeing the concept redeveloped on PPO (preferred provider organization) plan. Traditionally, an HMO contracts with health care professionals and facilities to create a “provider network,”  featuring lower premiums and co-pays than other plans. A traditional PPO also creates a “provider network,” but unlike HMOs, PPO health insurance will cover some – but not all – of the cost of care administered by out-of-network providers.

In 2014, you may be offered a plan that has a gate keeper. This gate keeper will be your primary care physician.  They will be in charge of managing and coordinating your health care. To see a specialist, you will have to get a referral from your gate keeper. To get diagnostic services, you will also need a referral from them. There will also be prior authorization for medical necessity, which should make specialty care more efficient. With this type of referral management we should see the cost of this health plan cost  a lot less.

Here are a few points about this type of plan:

  • This type of plan design may not have any coverage for non-network services except for emergency care.
  • This type of plan may not provide coverage for any treatment without a referral.
  • This approach to health care is going to put a strong emphasis on your relationship with your primary care physician. This may become a problem since we have a shortage of primary care doctors.
  • If you elect this type of plan, don’t be surprised if your primary care doctor is also listed on your insurance card.
  • This type of plan may be offered inside and outside the Federal Facilitated Exchange.
  • You may also see this in both the small and large group health markets.




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RateShock1Ohio reveals high exchange rates under the Patient Protection and Affordable Care Act, according to this article from BenefitsPro.

The state of Ohio just released their projected health insurance increases under the new health care reform.  As Hoosiers, we should look at those price increases closely as we may be in the same situation soon. The Ohio Department of Insurance stated that health insurance premiums will go from $223 a month to $420. which is an 88% increase in cost.

Most people thought that the Affordable Care Act would lower premiums. Under the law, health plans now have to have richer benefits and much less limitations.  These mandates all lead to higher premiums. The way the law plans to help people is by giving them subsidies through the exchange. You can find out more about subsidies at our sister site, Indianapolis Health Insurance Exchange.

If you make less than 400% of the federal poverty level and do not have access to group health insurance, then you may qualify for subsidies. If you get the subsidies then you will pay a percentage of your household income in premium. This ranges from 2.3%-9.5%.  The subsidies are how the law plans to reduce premium costs.

If you are above that 400% of FPL, then you should prepare yourself for what is now being called rate shock.



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