This week’s question from Rob
I’m thinking about retiring prior to getting Medicare at 62. I’m worried I won’t be able to afford health insurance though. Do you help people find individual plans? I know it’s now Open Enrollment for Obamacare. Do you have any insight for people like me?
Answer
We Don’t Just do Medicare
We’re getting off the Medicare topic for a week, but it’s important I discuss health insurance for those under 65 from time to time. And yes, we do help people like Rob who are looking to retire prior to turning 65, don’t get insurance through their employer, or own a small business. Be advised, those who are working and getting health insurance from their employer don’t have to apply during the Open Enrollment. That can be done up to 60 days prior to losing their coverage anytime during the year. However, the way the ACA regulations are written, it’s often best for someone like Rob to retire as early in the new year as possible.
2022 is going to be a great year for those who need to get plans through the Marketplace, ACA, Obamacare, or whatever people prefer to call it. Part of the American Rescue Act (ARM) the Biden Administration enacted this past Spring that got very little, if any, media coverage was the elimination of the limit on household income to qualify for premium subsidies, also known as tax credits. There was also a significant increase in the amount of subsidies which lowered premiums for almost everyone on ACA plans.
Prior to the ARM, a single person whose annual Modified Adjusted Gross Income (MAGI) was over $52,000, and a couple who exceeded $69,000, didn’t qualify for any subsidies. Now anyone who applies on the PA Marketplace, known as Pennie, will receive them in the amount of health insurance premiums that exceed 8.5% of their annual MAGI. Here’s an example of just what a positive impact this has had for Western Pennsylvanians.
At the beginning of the year and all of 2020, an Allegheny County married couple in their 60’s whose MAGI was over $70,000 paid $975 a month for a plan with a deductible of $6,700 per person! A more conventional Gold plan with a $1,000 deductible was $1,563! Those who live outside of Allegheny County paid even more!
In 2022, that same couple making $70,000 will pay only $14 per month for the high deductible plan and between $395 to $489 per month for Gold Plans that have deductibles of $0 and $1,000 respectively. That’s an excellent price for a married couple in their 60’s. And most importantly, there are no pre-existing conditions clauses on ACA plans, meaning companies can’t deny your acceptance into a plan based on current or past health conditions and must cover claims as soon as the policy goes into effect.
It’s Important to be Accurate
The ACA as a whole, applying, and choosing the right plan isn’t simple however. Ensuring an application is done correctly and income properly evaluated is crucial. Failure to accurately predict income for 2022 could result in a shock when taxes are filed. Also, one of the original complaints about the ACA was the smaller network of doctors and hospitals that could be accessed. And unfortunately, that is truer today than in 2014 when Obamacare was first introduced. On the most affordable plans, there is still a very real possibility that one might have to make the choice of no longer having their primary care doctor or specialists in network. There are only two companies who sell major medical Individual health insurance in Western PA, UPMC and Highmark. UPMC doesn’t grant network access to Allegheny Health Network and those who choose the lower cost Highmark plans don’t get network access to UPMC. The lowest cost plans in Allegheny County actually don’t allow members network access to any doctor who isn’t employed by the health care systems they own. There are some you can choose that expand networks, but they can be thousands of dollars more per year. It’s rarely a wise financial move to spend that much money so you see a doctor for a $10 or $50. Don’t get caught up in that line of thinking. Doctors are getting used to the “incredible shrinking network” phenomenon with ACA plans and have adjusted. Many will see their existing patients on a cash basis when he or she had to take enroll in a plan the doctor wasn’t contracted with. Again, you don’t need to pay $2,000, $3,000, $4,000 more per year in premiums to see a doctor once or twice a year for $10 or $50 per visit vs $100 or $200.
It’s unfortunate to find ourselves in a situation where we must choose a health insurance plan that may not have every doctor or hospital we want in network. There are going to be many people in Allegheny County who may have to switch most or all of their doctors based on a plan having lower premiums and much better overall benefits. If you have a doctor(s) and hospital(s) who you absolutely must have network access to, it’s imperative you verify that prior to enrolling. Myself and the other agents at The Health Insurance Store do just that for our potential clients as well as analyzing plans and determining which have the best overall value.
Know the Facts
I want to warn everyone about something very important. As I stated previously, the only two companies that sell true individual “major medical” health insurance in Western PA are Highmark and UPMC. When I say “major medical,” I’m referring to health insurance that covers hospitalizations, outpatient surgeries, and other expensive services and procedures such as chemo, radiation, air and ground ambulance, maternity, prescription drugs, etc., while also limiting the amount of bills one can pay in a calander year to between $2,000 and $8,700. There are other options, but they aren’t major medical. They’re known as Indemnity plans and pay on a schedule. For example, you could choose a plan that pays $250 to $1,000 per day in a hospital, $500 to $1,000 for an outpatient surgery, $1,000 to $1,500 for each chemo treatment, $100 for an Emergency Room visit, etc., and there’s is no end or limit to what people can be billed. Chemo can cost $10,000 to $15,000 per treatment. James Conner, the ex-Steeler running back needed 12 when he was diagnosed with Hodgkin Lymphoma. My guess is the billable amount to his insurance company far exceeded $100,000. With one of the more popular indemnity plans, he would have been covered for only $18,000 of chemo, leaving him responsible for the balance. I’m not going to mince words here. These plans are garbage. They’re often sold over the phone by people in other states who get paid ridiculously high commissions, which unfortunately, can result in those selling them being less than ethical. And that’s putting it nicely. Let me make this simple and clear. DON’T BUY ANY INDIVIDUAL NON-MEDICARE HEALTH PLAN THAT IS NOT OFFERED BY UPMC OR HIGHMARK! You are setting yourself up for financial disaster if you do and end up getting sick or having a bad accident.
Obamacare Open Enrollment started on November 1st and runs through January 31st. If you would like to make an appointment for a no cost consultation, give one of the offices a call. You can also request a quote on our website.
Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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We proudly serve the health insurance and Medicare needs of the following Pennsylvania areas: Connellsville, Uniontown, Greensburg, Mt. Pleasant, Scottdale, Irwin, N. Huntingdon, Murrysville, Monroeville, Plum, Lower Burrell, New Kensington, Pittsburgh, Plum, Oakmont, Penn Hills, Forest Hills, Wilkinsburg, East Liberty, Lawrenceville, Bloomfield, Natrona Heights, Leechburg, Washington, Morgantown WV, Latrobe, Monnessen, Jeanette, Erie, Edinboro, Northeast, Girard, Fairview, Union City, Harborcreek, Corey, Meadville, Waterford, Ligonier, Kittaning, Somerset, Waynesburg, Fayette County, Westmoreland County, Armstrong County, Butler County, Somerset County, Erie County, Crawford County, Venango County, Allegheny Valley, Pennsylvania
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.