Sunday, December 27, 2015

Why Do You Have An HSA?

gift wrap

The presents have been opened and some have already been exchanged. Now it is time to take stock of what we actually purchased for ourselves and our families this year. And while we are second-guessing that hoverboard decision, we might also want to make time to understand that new health policy we purchased for next year.

Some of the most popular policies in our market carry the letters HSA in their names. Many of you intentionally purchased this type of policy and intend to take full advantage of the tax advantages. Most people were simply purchasing the cheapest policy available, the one with limited benefits before you reach a high deductible.

To carry the HSA designation, the health policy must have a high-deductible (HDHP). The plan can not have office or Rx copays prior to the deductible being met. The Patient Protection and Affordable Care Act (PPACA or Obamacare) requires the policy to include “first-dollar” coverage for preventive services such as an annual routine physical, medical screening tests (like a colonoscopy), well-baby care, and certain medications. The maximum-out-of-pocket for 2016 is $6,550.

If your policy meets the above criteria, you are allowed to open a Health Savings Account.

It is only cheap insurance unless you open the Health Savings Account. The HSA may be opened through your insurer or at almost any bank. The money that you deposit into the account is tax deductible. You may then use the money, tax free, to pay qualified medical expenses. And the account isn’t use it or lose it. Unused funds roll over to the next year.

2016 Contribution Limits

Individuals      $3,350
Family              $6,750

HSA Catch-up Contributions $1,000

Contributing to your Health Savings Account does not solve all problems. Lots of you are singles purchasing $6,000 deductible policies. Even a maximum contribution to your HSA still leaves thousands of dollars of exposure should you happen to have an accident or unexpected illness. The best of these policies pays 100% of covered charges once the deductible has been met. Some still have coinsurance and only pay 80% or 70% until you have reached your maximum-out-of-pocket.

Whether you intentionally purchased a High Deductible Health Plan with the goal of opening a Health Savings Account or just bought the only insurance you could afford, it is important that you try to make the policy work for you. Either way, lose the hoverboard.


Sunday, December 20, 2015

No Client Left Behind

left behind

The Patient Protection and Affordable Care Act (PPACA or Obamacare) is the insurance equivalent of No Child Left Behind – incredibly frustrating and just as many mindless tests.

We are now through the first phase of this year’s Open Enrollment Period. This would be a good time to catch our breath and review our progress.

This computer stuff is harder than it looks. Our current crop of presidential aspirants constantly discuss shutting off part of the internet or controlling access to certain individuals. They discuss the internet and computers as if they were seasoned mechanics assessing a Chevy. This is year three of the Exchange. On Monday I had to switch to Chrome and enter everything in ALL CAPS to get the site to work. Sure it doesn’t crash as often as it did last year, but if this was my Chevy I would have utilized the Lemon Law to dump it long ago.

The computer issue isn’t limited to the government. A client asked to change her deductible for 2016. This was an off-Exchange policy so we only needed to visit the insurer’s website. The insurer, a big one, will remain nameless. It took over an hour to make an easy change. I would never send a client there which is a problem since the insurers are expecting their websites to carry the load as they cut back on staff.

Saying Goodbye. Some insurers have decided that selling on the Exchange is a losing proposition. Sheer incompetence has overcome others. Many of the Co-ops created under the PPACA have already been shuttered. UnitedHealth Care has announced that they will be pulling out of the Exchange. And then there is HealthSpan…

Cryin’ Won’t Help You. The first full year of the PPACA brought lots of tears. There were tears of joy as the previously uninsured gained coverage and others saved thousands. There were tears of frustration from dealing with and the national call center. And there were tears of anger as some were blocked from coverage for up to a year. Now it is mostly tears of the betrayed.

I had to explain to a young family why they couldn’t have reasonable coverage. They own a small business and live in a Cleveland suburb. In 2015 they had qualified for a heavily subsidized Silver Level Medical Mutual policy based on their income in the mid 40’s. In 2016 they will get $355. That is only 35% of the cheapest Anthem Silver policy, the least expensive unfettered access to University Hospital. The cheapest Medical Mutual Silver policy is a touch more. It would cost them $669.99 per month. They can’t afford that. The subsidy is designed to give them access to the second lowest Silver Level policy. That would be an awful contract from CareSource. (Yes, their office is directly above mine.) For $366.65 per month this family can go to Akron General, MetroHealth, and LakeWest. There is nothing inherently bad about any of these facilities, but would you sacrifice 10% of your income for insurance that bars you from University Hospital and The Cleveland Clinic? I wouldn’t.

Deductibles. Fewer good choices and skyrocketing premiums have forced people to increase their deductibles. $4,000 and $6,000 deductibles are common. What is not common are the savings accounts necessary to withstand the hit of an unexpected illness or accident. How long will it be before doctors and hospitals ask for a credit card with your insurance card? The answer is SOON.

We have more people covered. We have more people covered badly. We have an insurance bubble, no less serious than the housing bubble of eight years ago. We are all along for the ride. And no client will be left behind.