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The current administration reported the federal High-Risk medical plan, is expected to more than double the initial predictions of the Obama administration.

The Health Care law set aside $5 billion for the Pre-Existing Condition Insurance Plan  ( plan.  If you were denied coverage in the individual market and had been without coverage for 6 months you were eligible for this program.

The government actuaries predicted that each member of the Pcip plan would spend about $13,000 a year in claims. With 50,000 members they have a firm projection on claims. The average cost per member $28,994.




A snap shot of Claims for the PCIP plan.

Cancer treatment represents 27% of the pool’s costs.

Circulatory diseases represented 18.6% for the cost

Rehabilitative care was 18%

Degenerative Joint Disease 14.4%

The average age of the members is 55

The Obama administration goal was to have 375,000members to the PICP plan by the end of 2010.

There are states that do not have high risk pools so this plan has saved lives.

With the PCIP plan there is no waiting period  for coverage. So a member could get on that plan and have an immediate surgery. This is what is referred to as guaranteed issue. In 2014 there will be guaranteed issue inside and outside the exchange. If the government actuaries were this far off on claims predication for the PCIP how far off are they on the entire health care reform?

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Countdown to Health Care Reform
Countdown to Health Care Reform (Photo credit:

The insurance landscape is changing. But the shifts won’t just affect consumers – brokers are also looking at an alteration in the way they currently do business.

The new healthcare reform law requires states to create insurance exchanges so people not covered by an employer plan can shop for affordable coverage. Some industry analysts believe that consumers faced with a larger menu of options from which to choose will seek a provider that can offer comprehensive support. If that opinion becomes reality, there is concern that insurance brokers who operate smaller outfits may find themselves unable to compete.

On the other hand, the broker might be needed more than ever. A good broker could have significant value in translating the complexities of an exchange versus the private market. In Indianapolis alone, some predictions estimate that more than 800,000 people will move over to some type of exchange. Brokers will play a critical role in making these transitions happen smoothly.

For all the supposed simplicity, the exchanges are still an unfamiliar commodity. Individuals and small businesses will still need to figure out which coverage best suits their needs. Brokers and agents can act as guides for determining the appropriate coverage. In addition, employers that currently offer benefits to employees might feel intimidated by all the new regulations. A broker, using an existing relationship with an employer, can help identify new insurance opportunities available through an exchange.

As the healthcare reform law crawls closer to full implementation in 2014, it’s important to remember that most consumers will still seek an expert to guide them through the process. Large healthcare distributors may find themselves with greater levels of influence, but the tools they offer to consumers need to keep pace. If they are unable to meet those demands, the role of the broker becomes a tremendous necessity.

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The Affordable Care Act (ACA) requires that all health insurance plans sold on state exchanges beginning Jan. 1, 2014 cover ten essential benefits:


Ambulatory patient services
Emergency services
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
However, the specifics of what will be included in each of the categories have been left to individual states. Each state will choose an existing health plan to use as a model:

One of the three largest small-group plans in the state
One of the three largest state employee health plans
One of the three largest federal employee health plan options
The largest HMO plan offered in the state’s commercial market
In addition to addressing what will be covered, the ACA also broadly outlined the level of benefits – how health care costs will be split between health plans and consumers.

General percentage by level paid by consumer
(through deductibles, copays and coinsurance)

Bronze Level – 40%
Silver Level – 30%
Gold Level – 20%
Platinum Level – 10%

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One significant downside to a high-deductible health plan (HDHP) is that you’re responsible for paying everything out-of-pocket until you reach your deductible (which typically ranges from $1,000 to $5,000 on these plans).

You’ll pay 100 percent of the cost of prescriptions, doctor visits and emergency room visits. You’ll also pay for the cost of surgeries and out-patient procedures.

If you’re considering a pregnancy, make sure there’s maternity coverage on your policy. There usually isn’t.

While a high-deductible plan can lower your overall health insurance costs while protecting you from unexpected and large medical bills, make sure you have your own plan to pay those initial out-of-pocket expenses. You’ll need a tax-deductible health savings account or your own savings plan to satisfy the deductible.

Research shows that people with high-deductible plans do cut their overall health care expenses. But they also tend to cut back on preventive health care such as childhood immunizations, cancer screenings and routine tests. This “penny wise and pound foolish” approach to medical care can be dangerous.

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A high-deductible health insurance plan can provide affordable coverage for unexpected major health and medical expenses.

Essentially a form of catastrophic insurance, these plans charge a high annual deductible – from $1,000 to $5,000 and higher – in exchange for lower monthly premiums.

You’ll have to pay out-of-pocket costs for routine doctor’s office visits or trips to the emergency room until you hit your deductible. The insurance covers everything after that.

To help pay these out of pocket costs, it’s both wise and typical to pair your high-deductible plan with an IRS-qualified health savings account. You can make tax-free deposits into this account (even if you take the standard deductions and don’t itemize), up to $3,050 annually for individuals or $6,150 for family coverage. If you’re 55 or older, you can contribute an extra $1,000 a year.

This money is yours to withdraw, tax free, at any time, to pay for medical expenses that aren’t covered by your high-deductible policy.

High-deductible insurance is considered a consumer-driven health plan, giving the patients control over how to spend and invest their money.

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If you’re healthy and have some money in the bank, you might want to consider a high-deductible health insurance plan.

The plans offer cost savings over plans because of the high deductible, and they protect you from catastrophic health events.

If you’re in good health, rarely need prescription drugs, don’t have a pre-existing condition and don’t intend to get pregnant, you might consider a high-deductible plan.*

Under those circumstances, you won’t have many out-of-pocket expenses. Meanwhile, you can relax and enjoy the comfort of having protection against any unexpected and expensive medical costs.

The only caveat: You should put aside enough money (typically from $1,000 to $5,000, depending on your policy), to cover your deductibles in case of an emergency.  That’s why pairing your high-deductible plan with an IRS qualified health savings account makes this combination attractive.

(*Note: Some plans have a one-year waiting period before they cover maternity care or pre-existing conditions.)

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There’s good news for children with pre-existing conditions who are below the age of 19.

Under the Affordable Care Act passed in 2010, they can’t be denied coverage under group plans and most individual family or child-only policies. This applies even if your child has a potentially life-threatening medical condition like asthma or diabetes.

This rule applies to all job-related health plans and individual health insurance policies issued after March 23, 2010.

Children account for nearly 9 percent of the estimated 57.2 million Americans under age 65 with pre-existing medical conditions, ranging from deadly cancers to routine chronic conditions.

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If you have a pre-existing medical condition and are shopping for health insurance, expect special treatment.

How special? Well, kind of like a felon carrying the Ebola virus. You may as well stick a “kick-me” sign on your back. You’ll either be denied coverage, charged extra for premiums and out-of-pocket costs, or you might just have to abide a conditional waiting period.

The good news is that the Patient Protection and Affordable Care Act signed into law last year will help individuals with pre-existing conditions. But not until the start of 2014.

Until then, you should look into the Pre-Existing Condition Insurance Plan (PCIP), the federal version of high-risk insurance pools. To qualify, you must have been uninsured for six months, have a pre-existing condition, and have been denied insurance by a private insurance company.

Details vary depending on where you live in and whether your state’s PCIP is operated by your state or by the Department of Health and Human Services. Check out this interactive guide to learn more about howPCIP plans work in your state, how to apply, what they cost and what they cover.

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An accountable care organization (ACO) is a new health care delivery model envisioned by theAffordable Care Act (ACA) in which a group of doctors, hospitals and other health care providers work together to coordinate care for people enrolled in Original Medicare.

Many Medicare beneficiaries have several chronic conditions and see several different doctors. As often as not, the doctors don’t work together, and the patient receives redundant or conflicting care. Under the new model, an ACO will be responsible for all providing all health care services for a Medicare beneficiary. Through better coordination and communication, ACOs are expected to provide better care and lower costs.

As with Original Medicare, ACOs will still be paid on a fee-for-service basis. However, they will also be able to earn more if they keep costs down while meeting quality targets. If the ACO saves money, the savings will be shared between the ACO and the Medicare program.

ACOs are expected to save Medicare $960 million over three years, according to

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You probably know that generic drugs are a lot cheaper than brand name drugs, but you may wonder why. Are they lower quality? Less effective?

The FDA requires that a generic drug have the same active ingredient, quality and strength as the brand-name equivalent. The cost difference between brands and generics comes from the cost of bringing them to market.

A “brand name” drug is discovered, developed and marketed by a pharmaceutical company. Once discovered, the company quickly files for a patent to prevent other companies from copying and selling it. This gives them time to recoup research and development costs. On average, it takes $1 billion and 12 years for a single drug to travel from research lab to patient. That’s why brand names are more expensive.

Generics only become available once the patent expires – usually after 10 to 17 years. Then, other drug makers can step in and market the brand as generics. Because generic drug companies don’t have to recover research, development and marketing costs, generics are less expensive.

About 70 percent of prescriptions dispensed in the U.S. are generics, and using a generic drug is a great way to save money. For example, a popular brand name blood pressure pill costs $150 for a 30-day supply. A generic version costs $16.

If you have prescription-drug insurance, your copay for a generic is likely much lower than that for brand name drugs. For example, in a common “three-tier” copayment structure, you might pay $10 for a generic, $25 for a preferred brand, and $35 for a non-preferred brand.

If your doctor writes you a prescription, ask if a generic is available and appropriate for your condition.

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