Health Insurance

It’s Time for Taxes!

Hi All,

Now I know you must be so pumped about tax season so I thought I would provide you with some basics about the health insurance side of things so you don’t feel too overwhelmed!

Tax Thumbnail for Blog.png

Here are the details on the three different types of tax forms (and you can click the link for more info):

1095-A: comes from the INSURANCE MARKETPLACE, otherwise known as the online health insurance exchanges. If you purchased your insurance on the exchange, then make sure you wait for this form before you file your taxes.

1095-B: comes from your INSURANCE COMPANY to prove you had the necessary health insurance coverage for the year.

1095-C: comes from your EMPLOYER if you worked full-time for a large applicable employer last year.

If you are going to be receiving a 1095-B or 1095-C it’s ok to move forward with filing your taxes, even if you haven’t received them yet.

For more details, feel free to play around on the IRS website and Happy Taxes!!

FullSizeRender (1)

Health Insurance

Intro to the U.S. Risk Pools

Hello Everyone! And Happy Holidays!!

As a final send-off before we head into 2018, I’m going to spend today giving a brief overview of the large risk pools or insurance options that we have here in the U.S. If you haven’t already checked out my prior video explaining risk pools and how they work- be sure that you do!

Intro to the US Risk Pools Thumbnail

So to recap: the three major ways to get health insurance in the U.S. is through:

Medicare– insurance run by the federal government for all individuals over age 65, those with disabilities, and those with two specific diseases: End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s disease).

Medicaid– insurance run by the government for eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by the state governments according to federal requirements.

Private Insurance: insurance run by private companies.

We can get private insurance in a few different ways:

  1. Through your employer
  2. Through the health insurance marketplaces, or exchanges (healthcare.gov)
  3. By staying on your parent’s insurance until age 26

As you can see that leaves us with a hodgepodge of insurance options which inevitably means some people fall through the cracks and don’t have health insurance in any given year.

The current estimate of uninsured individuals in the U.S. is around 30,000,000 people.

Thankfully that is much lower than in prior years because after the health insurance exchanges were built, this allowed people who own their own businesses, work freelance, or aren’t offered insurance through their employer to be able to be a part of a risk pool and purchase health insurance.

That’s all for this week, folks!

If you still haven’t purchased health insurance for 2018 be sure to check your open enrollment dates and purchase insurance.

And keep your eyes peeled in the new year because The Health Care Transformation Academy will be launching in January! I’m incredibly excited to be offering very concrete easy-to-understand lessons through The Academy that will really give you the confidence and peace of mind to understand and navigate the U.S. health care system.

Wishing you and yours the happiest of holidays and I’m so excited for all that 2018 will bring! xoxo

Cheers to Health and Happiness!

FullSizeRender (1)

Health Insurance

Intro to Types of Health Insurance Plans

Hey Guys,

Today I’m going to teach you about the basic types of health insurance plans available on the market and their key differences. So even when you are thinking about the key health insurance equation (remember this??) you should also be thinking about which health insurance plan structure works best for you.

More Benefits + Larger Network= Cost Sharing (1)

Let’s start with the basics…

Health Insurance Types Thumbnail for Blog

So let’s review these key types of health insurance plans I mentioned plus a few additional types:

HMO (Health Maintenance Organization):

  • Requires you to designate a Primary Care Provider (PCP) and that PCP must refer you to see specialists. Without a referral, the insurance company will not cover any of the medical services you received and you will have to pay for it all out-of-pocket. (Note- women can typically go see their Ob-Gyn without a PCP referral and the services will be covered but confirm with your insurance in the Summary of Coverage and Benefits).  Recall from the “Who is your PCP” blog post that even if you aren’t in an HMO product that requires you to designate and see a PCP, you should do this anyway for your own health outcomes and care coordination.
  • A narrow network of doctors that you can see. If you go outside the network you will have to pay out-of-pocket for the medical services you received. Note that this concept actually extends beyond just the doctors too so be really careful when you receive any medical services. This can also include anything from ambulances and hospitals to home health providers and durable medical equipment providers (things like wheelchairs, oxygen equipment, breast pumps, etc.)
  • Less expensive. The cost-sharing component is typically much lower in an HMO but be careful because if you end up going out-of-network by accident your costs could be exponentially larger. There is oftentimes no deductible and low premiums.

PPO (Preferred Provider Organization):

  • Allows you to see any specialists without a PCP referral.
  • Tiers of networks- if you see a doctor who is in-network the insurance company will pay a higher percentage of the costs than by seeing a doctor who is out-of-network. The network of doctors in a PPO is typically larger than an HMO.
  • More expensive. Because this is broadening your network and allowing you to choose which providers you want to see without a recommendation of medical necessity from a doctor (PCP) you will have to pay more for these benefits. This typically includes a deductible, higher premiums, and higher cost-sharing for going out-of-network.

POS (Point of Service):

  • Requires you to designate a Primary Care Provider (PCP) but you typically don’t need a referral from the PCP to see specialists.
  • Tiers of networks- if you see a doctor who is in-network the insurance company will pay a higher percentage of the costs than by seeing a doctor who is out-of-network. If you see an out-of-network doctor you typically need to file the claim yourself.
  • More expensive. Because this is broadening your network and allowing you to choose which providers you want to see without a recommendation of medical necessity from a doctor (PCP) you will have to pay more for these benefits.

EPO (Exclusive Provider Organization):

  • Allows you to see any specialists without a PCP referral.
  • A narrow network of doctors that you can see. If you go outside the network you will have to pay out-of-pocket for the medical services you received.
  • Mid-tier expensive since you can see any in-network doctors without a PCP referral.

CDHP (Consumer Driven Health Plan), also called HDHP (High Deductible Health Plan):

  • The layout of networks and PCP selection etc. will vary plan to plan.
  • Incredibly high deductible of at least $1,300 for an individual or $2,600 for a family and typically lower premiums.
  • Whether this is expensive or not for you and your family will depend on how many medical services you use and the structure of the plan.
  • Many come with an HSA- Health Savings Account– that allows you or your employer to put pre-tax money into the HSA and use the funds tax-free for qualifying medical expenses.

Here is a summary of each of these types of plans so you can easily compare:

Health Insurance Types

Check out my blog next week where I will discuss CDHP’s in more detail. The CDHP is becoming more popular among employers as they are trying to balance both offering their employees health insurance while also reducing their spending on health care so I want to make sure we discuss in more detail.

See you next week and in the meantime…

Cheers to Health and Happiness!

FullSizeRender (1)

 

 

Ps- This week on social media I will be posting the definitions of key terms we have been reviewing throughout the blog. Be sure to check it out and test yourself to see if you remember the definitions!

Health Insurance

What is the Individual Mandate??

Hi Guys,

We’ve got a special edition v-blog here because, as you may have heard, there’s a lot going on over in Washington about repealing the individual mandate in the proposed tax reform bill.

Now, most folks are probably so confused about what the heck they are talking about and what the implications would be. So today I’m going to simplify some concepts and terms so that you can make your own decisions about what you think would be best for yourself, your family, and/or the People.

*Note- it is actually much more complicated than this but I’m going to keep it very simple for now.

First concept you need to understand is called a Risk Pool.

Risk Pool– the group of people that are in the same insurance plan. By being in that specific insurance plan, or risk pool, you are sharing risk across the other folks in the plan. For example, Medicare is a risk pool because it is one group of people that enter into the insurance plan and receive medical services in return. Other risk pools might be your company, if you work for a really large employer that pays for your health insurance, or a commercial insurance product like a BlueCross BlueShield, for example.

Before we continue, let’s learn more about risk pools by clicking on the photo below!

Health Insurance Risk Pools Thumbnail

Now that you have a greater understanding of risk pools and how they work let’s talk about the Individual Mandate.

Individual Mandate: the requirement that all individuals purchase health insurance or else pay a small penalty for not having health insurance.

*Note- For the 2017 plan year, the fee is calculated 2 different ways – as a percentage of your household income or per person. You’ll pay whichever is higher when you do your taxes. The fee is 2.5% of household income or $695 per adult + $347.50 per child. 

Now, why was the individual mandate built into health reform? In order to combat Adverse Selection, whereby people don’t pay their dues into the system but then when they become sick they purchase and use their health insurance. And don’t forget, all of us get sick at some point in our lives…

Adverse Selection: people who are sick are more likely to purchase health insurance.

So then what effect does removing the individual mandate have?

Cost of Care: when you have less healthy people paying into the system then the cost sharing (premiums, deductibles, etc.) is going to increase for everyone else who is paying into the system.

Let’s use an analogy of an amazing dinner buffet. I live in Los Angeles so I’m going to use delicious Souplantation as my example. Now the Brentwood Souplantation offers their dinner buffet at $11.99 per person for all you can eat. What a great deal! But what happens if people like me who only eat a small salad, soup, and dessert stop coming to Souplantation and people who are severely obese and eat five plates of food start coming to Souplantation? In order to cover their costs, Souplantation is going to have to increase their prices for the buffet for everyone who is coming to the restaurant or risk shutting down the restaurant. Now Souplantation might start charging $19.99 per person. But what if they start losing the business of the healthy people who say you know what, I don’t even eat $19.99 worth of food so it’s not worth coming, and Souplantation starts to lose more of the healthy customers it needs. This leads to…

Market Instability: the inability of health insurance companies to predict their risk pools’ enrollment numbers, risk profiles of those enrolling, and the cost of those enrollees.

Let’s continue on with the Souplantation example. Their customers are turning over like crazy! They’ve increased their prices but now they are getting more heavyset folks and they are having difficulties predicting how much food is going to be eaten and sometimes they don’t order enough and they run out of food, etc. You can see what a mess this has turned into! Now what happens? Souplantation decides to shut its doors and find a new location where the clientele is more predictable with a steady mix of customers who eat a lot and customers who eat a little.

So now that the insurance companies have increased prices and/or pulled out of the market as an option for the people, the third area of impact is coverage.

Coverage: The CBO estimates that due to adverse selection, the cost of care and market instability will increase such that an estimated 13 million people will lose coverage because they won’t have an affordable option for themselves and their families.

Who the heck is the CBO??

Congressional Budget Office (CBO): a strictly nonpartisan (doesn’t take political sides) group of economists and budget analysts who provide objective, impartial analyses of Congress’ proposals. CBO does not make policy recommendations, and each report and cost estimate summarizes the methodology underlying the analysis.

Now I hope I have provided enough of the basics for you to better understand what the individual mandate is and how it works so you can think about it for yourself and not necessarily along political lines!

As always, please let me know if you have any questions or comments and I hope you’re having a wonderful week!

FullSizeRender (1)

 

 

Health Insurance

Health Insurance 101- Intro to Benefits

Hey Guys and Gals! I’m sure you’ve been waiting in anticipation to learn more about BENEFITS!!

Before we get started, here is the quick recap of the three health insurance essentials so you can see where BENEFITS kicks in.

Three key essentials:

  • Cost Sharing
  • Benefits/Coverage
  • Networks

The gist: you need to find a health insurance plan that includes the BENEFITS, or medical services, that you need with the NETWORK of doctors and hospitals that you want to see with a COST SHARING setup that fits your budget.

Benefits/Coverage: which medical services you can receive that will be covered under the health insurance plan, or in simplified terms, what you get for your $$$.

Benefits that are covered in your insurance plan will range from who is providing the service (midwives, physical therapists, chiropractors, etc.) to where the service is provided (in the hospital vs outside the hospital in a clinic, skilled nursing facility, etc.) to how long the service can be provided (length of hospital stay for having a baby).

And where can you find all these details??

Summary of Benefits and Coverage– remember that document we talked about a couple weeks ago? This document, even though it looks incredibly daunting, is your best health insurance friend because it tells you what is covered and what it will cost! It will feel like reading the ingredients on a nutrition label or your prospectus when investing- it’s not exciting and there are going to be terms you won’t know but use Google and ask friends and read it because IT’S IMPORTANT! 

Key tip to remember: Your COST SHARING is directly related to the size of your BENEFITS and your NETWORK. If you need or want more BENEFITS to be covered by your health insurance plan, and potentially the option of a larger NETWORK of doctors and hospitals, your COST SHARING will go up accordingly.

More Benefits + Larger Network= Cost Sharing (1)

Now many of you have been asking me how to best take advantage of your benefits and my recommendation is this: Take advantage of your free annual preventive visit with your doctor. Most of you should have this with your insurance plan (or should select an insurance plan with one) and it’s important you use it!

Any question about BENEFITS? Comment below and as always…

Cheers to Health and Happiness!

FullSizeRender (1)