Here is my update on Health Care Reform: All of us will be impacted differently based on income, age, family make-up, health conditions and the date you purchased the health insurance policy.  Some VERY IMPORTANT information is contained below, so please take time to review, as it means up to $1000 of savings for self-employed clients.  I’ll first give you the broad picture, and then drill down to some specifics on what happens now and in the future.  Please also remember, this business is changing on a daily and weekly basis right now as everyone interprets the legislation differently.  The information below is what I know as of today, some of which may change or may have been incorrectly communicated to me. Any changes of your policy will be directly communicated to you by the insurance company.

First, (VIDEO) if you did not have a chance to read the 2000 pages of law and want a quick 9 minute education on the “big picture” of health reform, take the time to view this video.  While it over-simplifies the onerous details, the creators made a clever and humorous video that can be viewed at this link: http://source.kff.org/the-animation.aspx

Second, (TAX BREAK) if you are self-employed and you paid for health insurance premiums in 2010, then I have some great news for you.  In the recently signed Small Business Jobs and Credit Act of 2010 (H.R. 5297), there is a provision that will allow self-employed business owners to “take a ONE YEAR tax deduction for health costs in determining your payroll tax in 2010”. This means that a tax break equal to your health premiums in 2010 multiplied by 15.3% will be available at filing.  To see if you are eligible, please check out this link and check with your tax professional (CPA):

http://newsmanager.commpartners.com/nahuw/downloads/What%20You%20Need%20To%20Know%20About%20the%20One-Year%20Tax%20Deduction%20On%20Health%20Costs%20for%20the%20Self-Employed.doc

Next, what happens to my insurance that I own now?  The answer depends on when you bought the policy, and if you’ve made changes to the policy since March 23^rd, 2010.   If you bought your policy BEFORE 3/23/10 and have made NO changes, then your policy is “grandfathered” and will NOT receive all of the new mandated health coverage benefits.  But, you also won’t be subjected to the higher costs associated with those mandates.  (Ex: free preventative care – turns out it’s not free).  The only benefits a “grandfathered” policy will receive, at the time of your annual renewal (typically Jan 1^st), are:

1. No lifetime limits on the dollar value of “essential” benefits (not yet defined)
2. Insurers may only rescind your policy in cases of fraud
3. Adult children can stay on your policy until age 26

If you purchased a policy or made changes to your policy AFTER the law was signed on March 23, 2010 than your plan is NOT “grandfathered”.  Your policy will be upgraded with all the new mandates and a new price on your annual policy renewal date. These are the mandated benefits:

1. All of the 3 items above + no annual dollar value limits on benefits
2. FREE unlimited preventative care (mammograms, immunizations, etc.)
3. Plans may no longer impose pre-existing condition exclusions on children under age 19.  (more on this below)

If you buy a NEW plan after Sept 23^rd, 2010; the plan will or should include all of the above.  I say “should”, because all companies are still interpreting the law differently, and some plans still on the market do not come with the above mandates…..yet.  For example, when insurers were told they have to cover all sick children, the insurance companies reacted byno longer offering “child only” policies.  While this will only affect a small portion of people, it reduces choice and flexibility for that family.  Insurers will only cover children if at least one parent/adult is on the application to offset the risk.  If your child currently has a medical rider/exclusion, or been declined in the past; you now have a possible solution to your problem. Some of my clients want all of these new benefits and protections, and are willing to pay more money for it, or save money depending on your situation.  (Call / email me if you need a consultation.)

H.S.A. Health Savings Account owners: be aware of two important changes starting January 1, 2011.  The first is that you will no longer be able to spend your savings account money tax free on any OTC over-the-counter medications.  So, if you buy OTC allergy meds or other, then you may want to stock up on them using your H.S.A. account before the end of the year.  Only medications prescribed by a doctor will be allowed.  Also, the penalty for non-medical/dental/vision expenditures goes from 10% up to 20%.  Learn more at HSA Consumer.com

What does the future look like?  In 2014, insurers will no longer be able to decline adults and tax credits will be available to those in lower income brackets in the new state health exchanges that will be created due to the law.  If you want to see how much you will be paying in 2014, visit this Kaiser tax subsidy calculator and run your personal numbers at this link:http://healthreform.kff.org/SubsidyCalculator.aspx Everyone will be paying approximately 10% of their income on health insurance premiums, with or without tax credits.  I’d be interested in what you find, will you be paying more or less in 2014?

More information: can be found at www.healthcare.gov including the PCIP federal plan for people with pre-existing conditionswho have been declined by insurance in the past, and without insurance for the past 6 months.  While its’ expensive, it might be the only option for some people. 

Update:  PCIP rates were lowered by 40% in some states, a doctor’s letter is now an accepted form to prove that you’re uninsurable, and agents can now assist you with the plan and get paid $100 for the referral.

My role in your future?  While most members in Congress want to eliminate the agent from the equation, I just don’t see how that can happen when they are creating a more complicated system.  Advice from professionals will be in higher demand, but they seem to differ in opinion.  It will be tough for private health insurance ONLY agents (like myself) to survive the reform, and insurance companies (due to mandated government profit controls) are already reducing our income by up to 50% (ie. commissions).  I hope to survive by positioning myself as “the” resource for your health insurance advice as reform takes shape and make it up with volume.  With that said, I’ll need to be flexible with my business model, and have done the following to get ready:

1. Our current website at Replace Cobra.com has been re-launched with a new look and feel.  (Any feedback would be appreciated).  The website now allows consumers to find a qualified agent like me in the other 48 states I’m not licensed. AZ and FL residents will still come to me when they visit the site.
2. As mentioned above, the reform law mandates that each state create a health exchange. Private health exchanges are available at State Health Exchanges.com .  For my current clients, Florida Health Exchange.com and Arizona Health Exchange.com . They are currently live, and we hope to re-launch with a similar structure to our current website.  I hope to be “the” privately run health exchange in each state as an alternative to the state government version. 

Stay tuned to the blog for more updates