Finding low-cost healthcare is the goal of most residents in Pennsylvania. Obamacare, also known as the “Affordable Care Act,” became law in the Keystone State and the rest of the US nine years ago. The legislation was upheld by the Supreme Court, although it remains unpopular and expensive for many Pa residents. And although 2021 rates remain fairly stable, premiums have not reduced, and continue to increase at a faster pace than before the legislation was passed. However, large federal subsidies (instant tax credits) substantially lower premiums for many eligible applicants.
There are several alternatives to Obamacare health insurance plans that are available for consumers. We 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 helps consumers understand new terms that are being used. Several options include medical services discount cards, cost-sharing programs, and flat fee plans purchased from physician offices that are not offered through the Pennie Exchange.
Each year, new rules, guidelines, and updates are released, and we promptly post these changes on our website. New plans are created, and new rates are released. Senior Medigap options typically change, with updated plans and additions to drug formulary lists introduced. Often, companies change or discontinue plans that were previously available. Replacement contracts typically offer similar benefits, although the cost of coverage changes. Medicare Supplement plan prices generally change every year, and last year, a new high-deductible (HD) Plan G became available. The new Pa Exchange (Pennie) does not offer coverage to Medicare-eligible applicants.
Additional packaged alternative options are offered by many companies, including short-term, critical illness, accidental, gap, indemnity medical, vision, dental, and telemed. Most plans can be purchased as stand-alone products or packaged together. Seniors have specific options that can be considered as alternatives to Medicare benefits. Medicaid is available for low-income households. Since there is no Open Enrollment deadline, applications can be submitted at any time throughout the year. Household that lose their Medicaid eligibility because of higher income, can often apply for a Marketplace plan and qualify for a large federal subsidy.
Several legal alternatives previously allowed you to avoid paying the 2.5% household income tax for non-compliance. For example, religious organizations that did not receive social security, specific health-sharing groups, and Native American tribes were exempt. Also, persons that were incarcerated, illegal immigrants, and persons that could not afford to pay premiums (must meet guidelines) were also exempt. Currently, the penalty has expired, and no tax is imposed for consumers that purchase non-compliant or non-ACA plans. The Biden/Harris Administration is not expected to bring back the tax.
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 enrollment, 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 OE period (Pennie) begins on November 1st and ends on January 15th. Senior Medicare enrollment begins in October and ends in December. Special pandemic (COVID for example) OE extensions have been granted in the past.
When you qualify for 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. If you accept COBRA outside of the OE period, you may not be eligible for an exception.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 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 discount 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. Short-term plans (regardless of duration) also do not qualify.
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, along with office visit, well-check, and prescription drug benefits. The child may be covered separately or added to an existing plan. If added to a non-compliant plan, the right to and SEP exception may be forfeited.
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. Gold-tier plans without a subsidy have become very expensive. Platinum-tier plans are often not available.
Any child can also purchase their own private policy, although they can not be covered under two qualified plans simultaneously. If employer-provided group coverage is offered, these plans should be strongly considered. Coverage is typically comprehensive, with lower available deductibles offered at a reasonable rate. Group HSA plans are also very affordable, and employers will often contribute funds into the policy. Deductibles typically range from $3,000 to $6,000. Higher deductibles are also offered. A non-Obamacare plan can be selected and may be very cost-effective, since the risk of major health issues is small.
Divorce. Often, one of the spouses is included in 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. The new policy can also be a non-Obamacare plan, although pre-existing conditions will not be covered.
Additional companies may become available. If there is a change of address, verification of in-network providers should be completed. Dependents (children) that are losing coverage are also eligible. Typically, they can choose to keep the same carrier or select a new company. Since their federal subsidy is likely to change, selecting a different carrier is common.
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. Also, many additional carriers may be available, including Kaiser, Cigna, Molina, and other regional companies.
However, neighbor Ohio typically offers lower prices, although available Buckeye State carriers may change. For example, SummaCare and Oscar are only available in specific northern and central counties. Anthem only provides private plans in several counties, although their service area has been increasing. Medical Mutual, CareSource, Molina, and Ambetter offer policies in many areas.
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. PPO plans may not be offered in your area. Often, EPO and HMO options are 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 for the previous 24 months. However, if you neglected to pay a bill, an SEP will not be granted.
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. When the federal government declares an event a “natural disaster,” it’s highly possible an extension will be granted.
Grandfathered Plan – If you purchased an existing health insurance plan in Pennsylvania before March 23, 2010, the contract 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. Currently, very few grandfathered plans are active. The remaining plans often have a high premium or offer limited network coverage.
Another scenario is that UPMC, Highmark, Keystone, or other carriers 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 price 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 $8,150 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.
If you rarely have non-preventative office visits, are not treated for any medical conditions, and are seeking a budget-friendly policy, Bronze-tier plans should be considered. Although the deductible is high, often primary-care physician office visits and generic drugs are subject to only a copay. Depending on the policy, Urgent Care and visits to specialists may also only be subject to a copay. Non-generic drugs will typically have higher out-of-pocket costs. Telemed visits are encouraged and often don’t have to meet a deductible.
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. Physicals are typically not required, and the application is very short.
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. Benefits are unlimited, and no waiting periods must be met.
You can terminate a short-term plan at any time. However, you may have to re-qualify for additional coverage. Benefits are often offered in three-month increments without re-applying. 12-months plans are also offered by specific carriers. Companion Life offers several 360-day plans (Health Choice, Economy, and Deluxe). UnitedHealthcare also offers temporary plans with several plan options. Dental, vision, and accidental injury riders can be easily added. UHC features a comprehensive portfolio of temporary and ancillary products.
Sample Rates – A 30 year-old single male living in Central Pennsylvania (Dauphin, Lancaster or Lebanon Counties) can buy a temporary policy for $60 per month (UnitedHealthcare). There are additional options between $65 and $110 per month that feature lower deductibles (Independence American, Everest, 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 ages 30, 30, and 10) can be purchased for $126 to $240 per month. Lower deductibles and enhanced prescription drug benefits 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. With several carriers, age 64 1/2 is the oldest age that you can apply for coverage.
Not ACA-Compliant But No Penalty
These plans (temporary and limited benefit) are not Obamacare-compliant and feature low premiums. However, you are no longer required to pay the 2.5% household income tax for not enrolling in the Exchange. Previously, if your household income was $60,000, you would likely incur a $1,500 penalty when taxes were filed the following year. However, short-term plans are now more popular, and do not require a visit to a government website.
If you do not qualify for the federal subsidy, have no pre-existing conditions, and understand differences between Marketplace and temporary options, the 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 when major pre-existing conditions are present, especially if more than 3-6 months of benefits are needed.
Limited Benefits Option
We do not endorse or recommend these types of “restricted benefits 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 12-36 months, they may only be partially covered.
Since they are often indemnity plans, covered persons can choose any provider for treatment. A portion of the costs are discounted with the balance paid by the carrier. However, a deductible applies to most expenses, and payments for services will have to be paid quickly. Usual, customary, and reasonable (UCR) are paid for most services, which can leave high out-of-pocket expenses. Required therapy and followup procedures are not likely to be fully 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%, and substantial network discounts may not be offered.
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 ailment, with numerous tests verifying the accuracy of the results. This type of policy is best utilized as a secondary or supplement plan, but not as primary coverage.
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. Federal subsidies are not offered and waiting periods may be required for major health conditions.
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). Several smaller companies offer plans, but mostly in specific regions. Aliera Healthcare is under investigation in several states.
Several companies do not meet the definition of a “health care sharing ministry” (HCSM) and have been accused of misleading consumers. They may not be affiliated with a specific religious group and may also be engaging in deceptive business practices. When this occurs, State Insurance Commissioners will halt the operations and investigate the operations. Often it is determined that they are no longer exempt from insurance regulations.
Packaged Medical Insurance
Often, several types of coverage (insurance and non-insurance) are bundled together in an effort to provide comprehensive benefits at a reasonable cost. Accidental injury riders and prescription drug discount cards are often packaged with other products to provide an alternative to Marketplace plans. Dental and vision benefits are popular add-ons to individual and family policies. Long-term health care, disability, and life policies are also offered by many plans.
Temporary coverage along with critical illness, dental, vision, and telemedicine benefits often form the foundation of these bundles. A single enrollment form may be offered to simplify the application process. Billing may also be sent from a single source. Multiple deductibles and out-of-pocket limits can result in high costs. Also, pre-existing conditions are typically excluded, and preventative services may not be provided. Monthly rates can vary between $100 and $350 per month per person.
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 $2 million in the bank, and don’t mind placing your assets at risk, that may be a different situation.
Most medical plans (Marketplace, Off-Exchange, short-term, Christian Ministry) do not require applicants to have existing coverage. However, at the time of application, non-compliant plans may exclude past and present conditions, and may also decline the policy. Therefore, it is extremely important to maintain continuous and uninterrupted coverage, even if COBRA or an expensive Marketplace policy is selected. Seniors also must be aware of Medicare Open Enrollment periods.
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.