Finding low-cost healthcare is the goal of most residents here in Pennsylvania. Obamacare, also known as the "Affordable Care Act," became law in the Keystone State and the rest of the US in 2010. On June 28, 2012, the legislation was upheld by the Supreme Court. Yet, it still remains unpopular and expensive for many Pa residents. Premiums have not reduced, and actually continue to increase at a faster pace then before the legislation was passed.
There are several alternatives to Obamacare health insurance plans that are available for consumers. We'll review these options so you can determine which plans (if any) make financial sense. If you miss Open Enrollment and do not qualify for an SEP (Special Enrollment Period), choosing one of these alternatives may become a necessity. We also published the Pennsylvania Obamacare Enrollment Guide which may help you understand some of the new terms that are being used. Every year, new rules, guidelines, and updates are released, and we promptly post these changes on our website.
Several legal alternatives will allow you to avoid paying the 2.5% household income tax for non-compliance. For example, several religious organizations that do not receive social security, specific health-sharing groups, and Native American tribes are exempt. Also, persons that are incarcerated, illegal immigrants, and persons that can not afford to pay premiums (must meet guidelines) are also exempt. And of course, if President Trump repeals and replaces the ACA Legislation, an alternative won't be needed! However, it appears likely that tweaks and changes will occur, instead of a full repeal.
Special Enrollment Period (SEP)
Although an "alternative," the SEP is actually part of the legislation. If you qualify, this feature is available any time of the year. You are allowed to make changes to existing coverage, and also apply for a new Marketplace plan. You do not have to provide any medical information and the price you pay is the same as purchasing a policy during the standard enrollment periods at the beginning and end of each year. The 2018 OE period begins on November 1st and ends on December 15th.
When you have a "qualifying life event," typically, you are given 60 days to buy a qualified policy. The full federal tax subsidy will apply, so premiums could substantially reduce, depending on your projected household income for the year. However, if you are not eligible for a subsidy, you can still take advantage of an SEP. There are many situations that "trigger" the special event clause. The most common situations are listed below:
Losing minimum essential benefits. These are the required benefits that were part of the new ACA legislation passed and upheld by the Supreme Court. "Compliant" policies must contain these benefits. You can lose benefits in many ways, including no longer being eligible for coverage or perhaps a carrier simply no longer offering the plan in your area. If you lose short-term or limited benefit coverage, these situations do not qualify as an exception. Also, if your prior coverage was a "limited benefit" plan or "prescription discount" policy, you will not qualify for the exemption.
Birth of a child. This affects the newborn only, not necessarily the parent. Adoption of a child also qualifies as a "special event." If the Mother of the child does not have coverage, she will still have to wait until the next Open Enrollment. A short-term plan can be purchased to cover major medical events. Meanwhile, the baby can enjoy medical and dental benefits at a low rate. This includes both in-hospital and outpatient coverage.
Dependent reaching age 26. If your son or daughter is covered under your group or private plan and reaches age 26, they will need to apply for their own policy. The rate will be very cheap (because of age) and a large subsidy may be available if they are not earning a sizable income. However, you may also choose to purchase an unsubsidized policy (no government involvement), and the premium will remain very low. Unless there are significant medical conditions, a Bronze or Silver-tier plan is the most cost-effective. Any child can also purchase their own private policy, although they can not be covered under two qualified plans simultaneously.
Divorce. Often, one of the spouses is included on the other spouse's work or personal plan. After the divorce is official, the husband or wife losing coverage can choose an Exchange plan without any underwriting. In rare instances, the group plan may allow both persons to remain on one policy if they reside in the same household. If the couple is legally separated, additional options may be available. The new plan does not have to be issued from the same carrier as the previous policy. If there is a change of address, verification of in-network providers should be completed. Dependents (children) that are losing coverage are also eligible.
Move. No, you can't move across the street and expect to qualify for an exception. You must move to a new location that requires you to utilize a different network of providers. This can be an in-state move (Harrisburg to Altoona, or Reading to Pittsburgh, for example) or a move to a different state. Although a county line may only be a few miles away (or less), a change in county residence may generate this exception. NOTE: Moving to a different state (New Jersey or New York, for example) can result in substantially higher premiums. However, Ohio typically offers lower prices. Avaialble carriers may change. For example, SummaCare and Oscar are only available in specific northern counties.
New Citizenship. A new designation of your status will immediately make you eligible for benefits. The new classification must be considered legal. It is also likely that written documentation will be required. For HMO plans, a primary-care physician (pcp) will have to be chosen. Not all doctors are accepting new patients, although specialists should be available.
Mistaken Previous Enrollment. If previous sign-up was based on an error or incorrect information, a new enrollment can be requested. This also would apply to a failed sign-up due to HHS issues and/or mistakes. There is a verification process that could take a few weeks, so it is important to retain documentation. Keep records of phone, online, and written communications.
Exceptional Circumstances. Some examples include: natural disasters, such as flood or earthquake, unexpected hospitalization or medical confinement, misinformation from a navigator that keeps you from enrolling, wrong immigration eligibility result, website errors, and domestic abuse. If your specific situation is not listed, you can submit a request to be considered. There are many additional situations that could potentially be approved.
Grandfathered Plan - If you purchased an existing health insurance plan in Pennsylvania before March 23, 2010, it will not cover many of the mandated benefits that are now required. But that may be OK, since in many situations, you can keep the policy without being forced to purchase a more expensive option. However, if you made a substantial change to the contract (changing deductibles, for example), you may have lost your grandfathered plan status. NOTE: Each year, more grandfathered plans are being "recalled," and you must then apply for coverage that includes the required benefits.
Another scenario is that UPMC, Highmark, Keystone, or any carrier could decide to stop offering a current grandfathered plan. If this occurs, you are provided 60 days to enroll in an alternative plan (under a Separate Enrollment Period exception) and you will be fully-eligible for any subsidy you qualify for. It's also possible your policy may be changed to include all of the required benefits. Also, your premium could substantially increase. Often, your renewal date is NOT January 1, but rather the date and month you originally purchased the policy.
If the increase places you in a financial position where you can not afford any of the Exchange contracts, a "hardship exemption" may be offered if you meet certain guidelines. You'll then be able to purchase a "catastrophic" plan. However, this type of policy is not eligible for subsidies and is designed to pay for major medical expenses. Deductibles are typically $7,100 and maximum out-of-pocket expenses apply. If you are being treated for chronic conditions or are prescribed expensive non-generic medications, the catastrophic option is likely not your best choice.
Short-Term Pa Health Insurance
These types of plans can be purchased at any time of the year since they are not sold through the Marketplace. Originally, they were designed for students that were graduating, workers that had temporarily lost their job, persons waiting to enroll for Medicare, or any person that needed coverage quickly approved. And since they are often instantaneously issued, the waiting time for approval is typically less than 24 hours.
Specific rates are provided below. However, if you have serious pre-existing conditions, a temporary plan is not appropriate for your needs. Why? Simply because these types of conditions will not be covered. For more mundane illnesses such as allergies, it may not be an issue. But for diabetes and heart-related diseases, Open Enrollment Marketplace plans are the best options instead of a temporary policy. NOTE: You can terminate a short-term plan at any time. However, you may have to re-qualify for additional coverage. Benefits are offered in three-month increments without re-applying. 12-months plans are also offered by specific carriers.
Sample Rates - A 30 year-old single male living in Central Pennsylvania (Dauphin, Lancaster or Lebanon Counties) can buy a temporary policy for less than $50 per month (HCC Life). There are additional options between $50 and $80 per month that feature lower deductibles (Assurant, UnitedHealthcare and Companion Life). Also, prices will vary, depending where you live. For example, rates in Philadelphia will be different than a similar plan offered in the Johnstown area. Pittsburgh, Scranton, Hershey, and Reading, of course, will all be priced differently. The provider network will also differ, although most office visits are subject to a deductible.
A family policy (husband, wife and child) can be purchased for $130 to $170 per month. Naturally, lower deductibles will raise the premium. Family prices are also different in other areas of the state. Applicants that are older will pay higher rates and it is possible to be declined since contracts are underwritten. Typically, age 64 1/2 is the oldest age that you can apply for coverage.
Since these plans (temporary and limited benefit) are not Obamacare-compliant, although premiums are low, you will be subject to the 2.5% household income tax for not enrolling in the Exchange. For instance, if your household income is $60,000, you will likely incur a $1,500 penalty when taxes are filed the following year. Also, once the OE period has ended, assuming you are without coverage, between that date and January 1, it's likely you will not obtain conventional healthcare benefits, unless you start a new job or qualify for an exception.
If you do not qualify for the federal subsidy, have no pre-existing conditions, and understand differences between Marketplace and temporary options, the combination of penalty and premium savings may be quite substantial, and make it tempting to consider this combination. Typically, unless you miss Open Enrollment, a temporary policy should not be utilized to replace guaranteed coverage.
Limited Benefits Option
We do not endorse or recommend these types of plans, unless we have completely reviewed your specific circumstances. However, they are readily available from several companies. A "Limited Benefit" policy is typically easy to qualify for. One reason is that pre-existing conditions are often not immediately covered. After a waiting period of anywhere from 12-36 months, they may only be partially covered.
Although routine office visits, preventive benefits and prescriptions are often included in these types of plans, they are subject to limitations. It's fairly common that several (perhaps 1-4) office visits will be paid and perhaps the first few hundred dollars of drugs may be included in a plan. But the real problems start when you have a serious medical issue or are treated in the hospital. Also, a non-refundable application fee is often required to secure coverage. This is a very unpopular feature.
Critical illness policies are an additional option, but also leave gaping holes in your coverage. While you may be provided comprehensive benefits for the treatment of cancer or heart disease, you may have no coverage for many more common ailments, including routine surgeries and outpatient procedures. Also, unlike Marketplace plans, preventative benefits will not likely be covered at 100%.
Critical Illness plans provide lump-sum payments for specific illnesses (two of these diseases were mentioned above). However, often, if you die within 14 days of when the disease was diagnosed, no payment or coverage is provided. Also, the diagnosis of the disease must be provided by a specialist for that particular ailment, with numerous tests verifying the accuracy of the results.
Christian Health Insurance
Christian healthcare coverage is offered through many companies. Although not issued through conventional carriers, such as Aetna or UnitedHealthcare, they do present an interesting option. Typically, rates are lower than Marketplace plans (without a subsidy), and benefits are good. Often referred to as "healthcare sharing," members pay a fixed amount each month, based on their choice of deductibles, and out-of-pocket expense choices. However, maximum benefits are often capped at $1 million.
Acceptance is not guaranteed and any applicant not adhering to a Christian Biblical lifestyle, is likely to be denied coverage. Pre-existing conditions are generally not covered at the time of application. However, after a policy has been in force for a specific period of time, these conditions may be covered. The major companies that offer this type of policy are Christian Healthcare Ministries, Medi-Share, Samaritan Ministries, and MCS (Medical Cost Sharing).
Going Without Healthcare Benefits
Obviously, although this is an "alternative," in most situations, it is not prudent. You may beat the odds this year, next year, or for several years. But the possibility of a sickness or accident that costs tens of thousands of dollars is a risk you don't want to take. If you have $10 million in the bank, and don't mind placing your assets at risk, that may be a different situation.
It's also now illegal to not purchase a qualified policy. The penalty, which is really a tax, is now 2.5% of household income. Thus, a $1,000 tax will be assessed if you make $40,000 per year. In that situation, like most others, it's best to utilize the subsidy to lower your premium, and enroll in coverage that may be more comprehensive than you realized. Of course, a household with $100,000 of income could pay as much as $2,500 in penalties. In rare situations, it may be a cost-effective option, barring a catastrophic injury or illness.
Obamacare (aka Affordable Care Act) is the law in Pennsylvania, unless you are eligible for Medicare or Medicaid. If you qualify for a federal subsidy, you may receive an incredibly low price. Otherwise, there are still many affordable options. We help you find the least expensive prices for the type of benefits you want. We will also explain the advantages and disadvantages of selecting this type of policy. If an alternative medical plan is your best option, we will recommend it. However, there may be exclusions and limitations, which we will fully explain.