Skip to comments.Health Plans Get Creative Skirting the ACA
Posted on 10/31/2013 8:01:45 AM PDT by Attention Surplus Disorder
You have to give them credit health insurers are showing just how creative they can be at shirking their obligation to provide new consumer protections under the Affordable Care Act. Just last month Christine Monahan and I documented how health insurers are taking advantage of a legal loophole that allows them to escape compliance if they early renew policies late in 2013. According to the Wall Street Journal, early renewals are being pushed by major insurers such as UnitedHealth Group, Aetna, and Humana. Theyre also being marketed by Blue Cross Blue Shield plans in a number of states. Unfortunately, early renewals not only deny consumers many of the protections set to go into effect in 2014, but they could also make premiums higher for everyone in 2015.
Last week I heard of yet another strategy, this one marketed by Arkansas Blue Cross Blue Shield, to offer consumers a 364-day policy. As reported in the Arkansas Democrat-Gazette on Sunday, the Arkansas Blue Shield website lists the Essential Blue Freedom plan as a full coverage plan with benefits that are not dictated by the new health care law. Thus, while individual policies must comply with the ACAs prohibition on lifetime caps on coverage, the Essential Blue Freedom plan imposes a $1 million lifetime cap. While individual policies have to offer the ACAs set of essential health benefits and comply with the mental health parity law, this plan doesnt cover maternity care (unless you buy it separately) and mental illness coverage is capped at $1000 per person per policy. And, while ACA-compliant individual policies can no longer discriminate against consumers based on health status, consumers must pass medical underwriting to enroll in and renew an Essential Blue Freedom plan.
How can Blue Cross Blue Shield get away with this? By taking advantage of yet another loophole in the law that allows insurers to sell so-called limited duration or short-term plans that are not regulated as traditional health insurance and thus exempted from many federal and state consumer protections. Short-term policies were originally designed for people who needed just that short-term coverage to get through a life transition, such as a gap between jobs. These were often 3-month or 6-month policies. With its 364-day plan, Arkansas Blue Cross has stretched the definition of short-term coverage beyond any reasonable interpretation.
What does it mean for consumers? First, consumers enrolled in these plans wont be able to meet the requirement in the ACA that they maintain health coverage. Short-term policies are not considered minimum essential coverage under the law. As a result, if consumers buy these plans, they will have to pay a tax penalty with their 2014 tax return. Unfortunately, Blue Cross marketing materials including the brochure do not disclose this to consumers. According to a Blue Cross spokesperson, consumers can only find out that the coverage is inadequate after they submit an application.
Second and what Blue Cross doesnt say in its marketing materials is that the reason theyre able to offer lower premiums in these plans is because they are so much skimpier than ACA-compliant coverage. And that means consumers are at greater financial risk if they get sick or injured.
Third, and perhaps most important in a state like Arkansas where an estimated 282,000 residents will be eligible for federal tax credits to reduce the cost of coverage, consumers could be persuaded to sign up for one of these plans in the mistaken belief theyre getting a better deal. If they do, theyre forgoing an opportunity to get premium tax credits and cost-sharing reductions through Arkansas health insurance marketplace. And the plans sold on the marketplace will be more comprehensive and provide greater financial protection.
Unfortunately, if Blue Cross Blue Shield in Arkansas sees short-term policies as a way to get around the ACA, its likely other companies in other states do, too.
Especially if state regulators allow them to advertise these plans as comprehensive and full coverage, even when theyre not. For consumers, unless theyre shopping on the new health insurance marketplaces, they need to read the fine print and heed the saying buyer beware before enrolling in a plan.
Health insurers would have to be brain dead not to this.
In other words, the insurers are doing their best to preserve their business while complying with the letter of the law. The fact that the law is so shoddy doesn’t even enter into the author’s brain - much less her unreal world.
Damn the free market and innovation!
Now where's my iPhone? I want to post an Instagram photo! And then I'm off to Starbucks!
I would assume these are the “Bad Apple” insurance companies.
OMG!! As if navigating the health insurance waters wasn’t tough enough....UGH!!!
Shirking their obligation? That sounds like something would have been shot for in the Gulag Archipelago.
That's been Osama Obama's strategy since,at least,the moment he filled out his application to Columbia.
“creative skirting” - isn’t that what strippers use?
Perhaps another story might have been titled, “Obama gets creative by giving ACA waivers to cronies who are shirking their responsibilities.” I doubt the author of this article will be writing that one, however.
I wish BC/BS would have given us the option of early renewal instead of canceling our policy effective Decembed 31 due to the onerous provisions of ObamaCare. The Dems and their apologists can spin this all they want. They can try to transfer blame to the insurance industry.
Yes, Americans have become colossally stupid. (Two terms of this idiot prove that.)
But they’re not quite that stupid. Not yet anyway. The Dems own this.
What if one becomes a resident of Puerto Rico?
What is so unfortunate about skirting socialized medicine and fascist government policies?
I wouldn’t pretend to be able to tell you.
My/our only hope is that “natural” capitalistic forces induce the admin to make changes and changes and changes...until the thing collapses.
My thinking has been twofold:
1: Since the promise was made that “you can keep...” there is (in my amateur legal opinion) an assertable claim of “detrimental reliance” eg; fraud, and thus an increase in healthcare expenses should be deductible against income taxes, provided one files a 4684 Casualty/Theft Loss. That really only helps those with enough income to itemize expenses (hasn’t been especially worth it in recent years, for many) and in any event only mitigates about 1/3rd the loss. By “loss” in this case I am referring to the theft of the delta increase in healthcare costs.
I am fairly sure Ms. Lerner would come out retirement to audit your ass if you or I tried this, but somebody should.
2: I wonder if an insurance-insurance industry could be brought into existence, in other words, a derivative market that would insure against catastrophic healthcare premia rises.
I will now shut my mouth and await the drone strike. Been nice knowing y’all.
It’s time for the entire medical industry and the American people not only to get creative, but also to ridicule the Alinsky-ites who are running the Federal sham show.
Terrific article, actually, except for the WHINE. I was wondering if insurers wouldn’t find their way around the mandates, and by golly, they have! Kudos to the free market. Kudos to We the People, Land of the Free and the Home of the Brave. Tar and feathers for the DC crowd.
What no maternity care for 55 year old men or women!
Voters need to know that the only way to escape the tyranny of Big Government running their family’s health care is to vote every Democrat out of office next year.
One Congress cannot bind another Congress. ObamaCare can be history in January 2015, after the 2014 elections, IF every GOP quisling also is voted out in the primaries and starch conservatives in the mold of Ted Cruz and Mike Lee win elections. Get to work, or don’t complain.
“Its time for the entire medical industry and the American people not only to get creative, but also to ridicule the Alinsky-ites who are running the Federal sham show.”
With respect, the creativity you refer to is not the remedy. The remedy is to comprehend the enormous edifice of institutionalized grift “the medical industry” as a government-sanctioned monopoly has shoved down the throats of Americans in terms of cost.
You or I can go to the Oklahoma Surgical Center and get a surgery for roughly ONE FIFTH the cost of same in a hospital. They take cash only, no insurance. You can’t pay, you don’t get. They post their rates.
Consider the following: What is the surgery co-pay under Medicare?
Ans: 20%. aka “ONE FIFTH”.
So the question arises, what is it that one gets from Medicare?
Ans: Absolutely nothing. Zero. The ONLY THING Medicare pays for is the artificially-inflated cost of healthcare. (I urge you/all to just allow that thought to sit in your brain for a minute) What difference does it make whether the 20% I pay goes for the co-pay under Medicare or goes to pay THE FULL COST of the surgery at the OKSC?
(I must credit Karl Denninger for this piece of insight)
None. There is no need for health insurance beyond catastrophic. There really isn’t. Pay for the damn doctor when you go see him/her for ordinary events, remove the administrative load of him/her filing insurance claims, eliminate sanctioned monopolies via the removal of CON (certificate of need) laws and the edifice collapses. The entire edifice is a fraud designed to enrich a government-sanctioned multi-dimensioned monopoly. You think the military-industrial complex is a big deal? The medical-industrial complex is bigger.
You’ve essentially outlined what I meant by “getting creative,” namely bypassing the whole system and paying cash. There is most certainly collusion going on whereby politicians, insurance companies, and an assortment of paper pushers are enriching themselves to the detriment of those who would be better off retaining their earned substance.
If you buy “The Big Lie” that Obama is the ideal then this article makes sense.