The following is a guest post from Amy Rosebush of United Health Advisors, provided at my request. Amy left a long, detailed comment response to my article, What To Do If You Absolutely Can’t Afford Health Insurance 2015. It may offer an alternative to Obamacare, which is why I asked her to do a full-blown post on the topic. It can be a benefit to a lot of people who are finding Obamacare to be unworkable. Amy’s post response…
In What To Do If You Absolutely Can’t Afford Health Insurance 2015 Kevin made the following observation:
“Health Insurance Hardfact #1: Obamacare did nothing to address the issue of health insurance affordability. Unless you’re at or near the impossibly low poverty line for your state. That’s left most of the middle class no better off than they were before – except for the penalties for not having coverage, which means most are actually worse off.”
This is precisely the point I wanted to raise in response to the search for an affordable insurance solution. People who are enrolled in Obamacare plans that are near poverty level are doing fantastically well with their insurance. Too bad they are near poverty level, but Obamacare really works for them. However, as many of you know from personal experience, if you make just a bit more – meaning a reasonable sum with which you might actually sustain a family – you do not get that great tax subsidy and you are paying too much each month for your premiums. Then you have a deductible to deal with, and probably a larger one than you feel comfortable with at that.
Adding Insult to Injury: Paying a lot for Coverage that Isn’t that Great
You would think that if you were paying this difficult amount every month for insurance that you would have the benefit of that insurance when you need it, but you often don’t. Yes, they placate you with a copay for a doctor visit. It feels like you have health insurance because you only pay $10 or $20 when you go to see your doctor.
But what happens to you when you break your leg or you have to be seen overnight in a hospital over something? What if you need surgery? Who pays the anesthesiologist? Who pays the surgeon? Who pays the hospital fees and the labs? You do. You have paid this premium every month with some difficulty and now you find yourself footing the bill for your emergency care as well.
Well once that’s done, what a relief. Maybe you managed to spend $5,000 and you met your deductible for the year. That’s doubtful since 96.7% of medical claims are lower than $5,000 and most deductibles are higher than $5,000. But let’s say that you did manage to meet that deductible. Now, if anything happens to you, your insurance will cover you. I don’t know about you, but I don’t have $5,000 laying around in case I wind up being hospitalized for something.
United Health Groups Premium Choice plan – An Alternative to Obamacare?
This brings me to the structure of United Health Groups Premium Choice plan. It isn’t for everyone. For one thing, it’s private health insurance, and private health insurance does not have to take you. Obamacare does – that’s one reason that their prices are high. Private health insurance is only interested in insuring the “reasonably healthy”. They look at the MIB report which is the Medical Bureau of Information report, it’s like your health credit report.
People in underwriting contact the applicant for private health insurance and follow up on everything on the MIB report. If you are fully recovered or you have had good labs or can pass a blood pressure test at CVS pharmacy, or whatever the case may be, they may still insure you, even with an issue.
Why do you care?
Because, if you can get in to the pool of healthy people, you win. Consider:
- Your monthly premium will be less
- You will have no deductible, and
- You have the advantage of utilizing the largest PPO network in the U.S.
Technically, you can go to ANY doctor and ANY hospital, but it’s cheaper if you stay in the network. There are benefits built into the plan, making it very rich coverage. There is a sickness and wellness portion, an accident portion and a major medical portion.
Front End AND Back End Coverage
United Health Group patented the design of this plan and they have been doing amazingly well with it. There is a front end and a back end to the plan. The front end is the largest PPO plan available in the U.S., and the back end is covered by Cigna.
On the front end, here you are, a reasonably healthy person. You are enjoying your first dollar coverage, you go to your doctor in a large network, you receive help with your prescription medications and you are paying less. As a healthy patient, you do not have to pay the extra costs associated with an insurance company that has to balance out healthy people and sick people. You’re saving money. You could be tucking that money away, using it to pay bills or putting it into a 401k.
Enter a medical catastrophe. Something terrible happens – you find out that you have a chronic illness or a serious issue and you need to be hospitalized for a long time and treated for a long time. Maybe you suddenly need a $250,000 cochlear implant. This is when you cross from the front end of the plan, the sickness/wellness and accident side, over to the back end of the plan.
What happens next? There is a $3,000 deductible once you decide to cross over into the major medical side of things.
A Major Medical Example
Let’s say that you have a major medical problem; you can begin using that portion of your plan. You will have to pay a $3,000 deductible but after that, everything is PAID for. You didn’t foot the bill for all the sick people enrolled in Obamacare every month preceding this. You did not have to meet a much larger deductible before you could even enjoy basic care, and once that $3,000 deductible is met, the plan pays 100% of your costs.
You heard that right 100%. I’m going to guess that if you have something major enough to cause you to cross over from the healthy pool of people into the not so healthy pool of people, $3,000 is not that much to have to pay.
But 100% coverage? There is no way that a private insurance company can maintain that kind of coverage and still offer their services cheaply.
And if that’s what you’re thinking, then you’re correct – that is not sustainable. The beauty of this plan is that it is affordable and helpful from the first day of coverage, and they have to keep it that way. They are willing to eat the cost of your entry into the pool of not so healthy people until the next open enrollment period begins.
So, if you become critically sick in March, you are going to have all the way through until the following November when open enrollment begins. At that time your agent will help you find the best fit in an Obamacare plan while you continue with your struggle, whatever it was that got you there in the first place. Can you come back to the Premium Choice plan after that? Yes, but you have to go back through underwriting. They have to be satisfied that you are fully recovered.
Sometimes underwriting will come back with an addendum to an acceptance. They will say “Okay, we will cover you, but we will not cover this issue for the first 12 months” or “we will cover this issue at 70%” and so forth. But what just happened in that scenario? You didn’t PAY for coverage until you needed it. You have rich sickness /wellness and accident coverage and you don’t have to pay for major medical coverage until you need it.
There’s one other important feature – there is an accident plan on the front end that helps you avoid crossing over to the major medical side unless absolutely necessary. If you have an “accident” while using the plan as a “reasonably healthy“ person, you just use that accident coverage in your plan to take care of your bills. You get money toward your visit to urgent care and then money toward your hospital bills. You don’t have to initiate the $3,000 deductible and cross over to the major medical side for any kind of “accident”.
United Health Groups Premium Choice Plan Benefits
Some of the other optional benefits to this plan include:
- 24hour concierge service. You can avoid taking time off work to sit in a doctor’s office because your child had an ongoing cough or ear ache. You can call, and within reason, the doctor will write you a script. Obviously they do not deal with controlled substances like Oxycodone, but a large number of people enrolled in the Premium Choice plan never use anything more than that concierge service.
- An Income Protector This allows you to allocate a certain amount of money to a time frame. For example, you might elect to have $1,000 sent to you once a month for 6 months in the event that you are hurt or sick to the point that you are unable to work.
- Death and dismemberment.
- Dental and vision coverage.
Again, these coverages are optional, and you can exclude them if you want to keep your premiums low.
Just In Case You Were Thinking This is a Perfect Plan – There’s a Glitch
Here is the drawback, but when we are done, it really may not even be a drawback. The tax penalty. These plans are not ACA mandated plans. They are not considered “creditable coverage” according to ACA mandates.
What does that mean? It means you still have a tax penalty at the end of the year. They raised the penalty this year. Here is a chart:
- Less than $9,500 income = $0
- $9,500 – $37,000 income = $695
- $50,000 income = $1,000
- $75,000 income = $1,600
- $100,000 income = $2,250
- $125,000 income = $2,900
- $150,000 income = $3,500
- $175,000 income = $4,100
- $200,000 income = $4,700
- Over $200,000 = The cost of a “bronze” health-insurance plan
You can read about the penalty or ask your agent and or CPA to tell you what your penalty would be. Weigh that against what you save on your premium every month and what you would have paid with an Obamacare plan. Often the difference is so striking that it is clear the private insurance plan is the winner. Other times, there is a choice to be made based on the extra elements of the plan, the clients unwillingness to pay so much on a monthly basis and a slight difference in cost at the end of the year. What is clear is that no matter what the scenario, private health insurance is the best way to go in a crisis. 100% coverage cannot be beat, temporary or not.
(Please see the updated 20 Part-time Jobs With Health Insurance post for the most current list of employers who offer health coverage for their part-time staff.)
The above post was written by Amy Rosebush of United Health Advisors. The plan may or not be a viable alternative to Obamacare, depending on your personal circumstances and health insurance needs. If you’d like more information you can email Amy and she’ll be glad to help.