Are You in the Healthcare Coverage Winners’ Category?

Today’s video is scheduled for Thanksgiving week for a reason – those who have coverage in the ways described in this video should give thanks!

I have dealt with clients over many years who have only had heavily subsidized and comprehensive coverage throughout their careers. Remarkably, from my point of view, they assume their situation represents what coverage is. Our system in the U.S. is fragmented and coverage can vary even though almost all non-Medicare coverage is now Affordable Care Act compliant. And anyone who has managed the transition to Medicare knows that there are many options and decisions to make in that process. Anyway, we have prepared a video on “winners” and ”losers” but we have left out the couple described below from both videos because they have coverage but it is wildly unaffordable.

The couple’s renewal notice (excerpts below) is for an off-exchange policy in the individual market in Connecticut. They are in their 60’s but not yet eligible for Medicare. Their January 2023 monthly premium has been increased to $3,010.52. They will each have a $6,000 deductible. Per the Inflation Reduction ACT of 2022, if the premium for the benchmark silver plan exceeds 8.5% of income, they should be eligible for premium assistance if they purchase their plan through the exchange. If the premium doesn’t exceed 8.5% of their income, they are unfortunately stuck paying this premium.

There are many people in a similar situation who would like to remove the name, Affordable, from the Affordable Care Act.

Here are our winners. Those with:

Active group coverage through a government entity

This group typically contributes little toward their premium, pays very little out of pocket, has a low deductible, and enjoys comprehensive coverage with a broad network of providers. Government employees also remain the group most likely to enjoy good retiree coverage.

Active group coverage through a large employer

On average, this group contributes far more than government employees toward their coverage and pays more in coinsurance and copayments, but is likely to enjoy comprehensive coverage with a broad network of providers. Many of these plans are self-insured (claims are paid by an insurer using the company’s funds).

Medicare

Most people are very satisfied with their Medicare coverage. There can be issues that are vexing, such as doctors opting out, practices that don’t want to accept new Medicare patients, no cap on Medicare Part D yet, and the fact that original Medicare doesn’t cover routine dental or vision which those who had group coverage are accustomed to having. Medicare Parts B and D are income-indexed so much higher cost than many expect. Nevertheless, Medicare deserves to be on our winners list.

Active group coverage through a small company

Most small employers who offer coverage are fully insured (pay premiums to an insurance company from which claims are paid). This type of coverage is always ACA-compliant, so rich in terms of benefits, but product choices may be more limited to products with narrow networks like HMOs and EPOs.

Individual Coverage for those Eligible for Premium Tax Credits

The Inflation Reduction ACT of 2022 made more people eligible for premium tax credit assistance. If you think you may be eligible for this assistance, you must apply through your state exchange or healthcare.gov if your state does not have its own exchange. Many in this category face some narrow network issues but are very fortunate to have subsidized coverage.

Medicaid

Medicaid is the coverage for Americans who have low enough incomes to qualify. Although Medicaid is a joint federal/state program and thus varies by state, there are far fewer physicians who take Medicaid as opposed to Medicare because they feel the fee schedule is not acceptable. Otherwise, Medicaid is significant protection at minimal or no cost to those on it so we must include it as a winner.

Please note that within Medicaid there is a group of very big winners. Those winners are the people who are no longer eligible for Medicaid but remain enrolled at taxpayer expense because the Biden administration continues to extend the COVID-19 public health emergency. The public health emergency was declared in early 2020 and because the Biden administration has continued to extend it, will continue into 2023. We are always pleased when people maintain healthcare coverage but the continued extension is not fair to those who contribute and a blatantly political decision.

The distinction between winners and losers is our opinion and arbitrary. Nevertheless, we hope it drives home the reality that not all coverage is the same.

We wish you a happy Thanksgiving holiday and joyous holiday season.

Thank you for reading our materials and watching our videos.