ACA Catastrophic Options

Every morning I receive an email with the latest news in health insurance.  One of the articles from the NAHU (National Association of Health Underwriters) Newswire is below.

We have had a few people come into our office this week to enroll in a marketplace plan and even more that have signed up for individual plans not on the marketplace.  If you are not sure about the marketplace website and have questions about how or why to enroll give us a call.  We can help you enroll in a plan whether it is on or off the marketplace website.  The main reason to go to the marketplace is to get some type of government assistance whether it be a tax subsidy or cost sharing.  If you don’t qualify for assistance I don’t see the point in going to the exchange.  It takes longer and the prices are the same.   The prices are the same on or off the exchange.  But the process of applying is a lot faster off the exchange.  You do NOT have to buy insurance through the exchange/marketplace.


Administration Announces Expanded Catastrophic Coverage Options For Those With Canceled Policies.

News of a change to the Affordable Care Act attracts significant coverage today, including on the front pages of several national newspapers. The large scale impact of the decision is not immediately clear, as reflected in headlines about the change, which range from the Wall Street Journal Share to FacebookShare to Twitter’s straightforward “White House Will Allow Some To Buy Catastrophic Health Plans” to the Washington Post Share to FacebookShare to Twitter Wonkblog’s “The Individual Mandate No Longer Applies To People Whose Plans Were Canceled.”

The Wall Street Journal Share to FacebookShare to Twitter (12/20, A6, Radnofsky, Subscription Publication) reports that yesterday, Health and Human Services Secretary Kathleen Sebelius announced that the Obama Administration would allow some people with plans that have been canceled under the terms of the Affordable Care Act to purchase catastrophic health insurance plans in 2014. These plans would normally not meet the standards for insurance set by the Act. The announcement revealed an adjustment to the landmark health law that would allow an unclear number of people with canceled plans to have a hardship exemption. In her statement, Sebelius wrote that some people with canceled plans may have trouble paying premiums for new coverage, “As a result, in addition to their existing options these individuals will also be able to buy a catastrophic plan.” Some members of the insurance industry are concerned that the expanded use of hardship plans could negatively affect the market.

The New York Times Share to FacebookShare to Twitter (12/20, Pear, Subscription Publication) reports on its front page that the Obama Administration has broadly defined who qualifies for a catastrophic plan eligibility: “If the consumer believes that the plan options available in the marketplace in their area are more expensive than their canceled health insurance policy, they will be eligible for catastrophic coverage through a hardship exemption.” Those receiving such an exemption will be able to satisfy the Affordable Care Act’s individual insurance mandate with a catastrophic policy. The Times points out that the Obama Administration previously delayed other aspects of the ACA starting in November, 2011.

On its front page, the Washington Post Share to FacebookShare to Twitter (12/20, Goldstein) notes the controversy surrounding the change. Robert Zirkelbach, spokeman for the trade group American’s Health Insurance Plans, warned about the potential impact: “This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers.” Joanne Peters, a spokeswoman for the Department of Health and Human Services, defended the move, calling it “a common sense clarification of the law.”

Number Of Consumers Still Uninsured After Losing Insurance Debated. The Washington Post Share to FacebookShare to Twitter (12/20) “Wonkblog” offers an early analysis of the decision, noting that the size of the population of people with canceled plans is subject to debate: “Republicans estimate that about 5 million people have seen their plans canceled. The Obama administration believes the number, at this point, is actually in the hundreds of thousands. There’s no truly reliable figure here.” The analysis concludes the change “puts the first crack in the individual mandate” and will likely embolden the Affordable Care Act’s detractors.

USA Today Share to FacebookShare to Twitter (12/20, Kennedy) reports that the Obama Administration estimates that fewer than 500,000 people who had plans canceled under the ACA have not yet signed up for alternate coverage. The estimate comes from four anonymous “senior administration officials.” USA Today says the “sub-500,000 figure counters Republican claims that more Americans will lose coverage starting Jan. 1 than will be newly insured.” USA Today notes that a Heritage Foundation report released this week “said ‘millions of Americans have lost and will lose their coverage’ due to the law and cited 4.7 million cancellation letters.”

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