Health Reform Pump Fake

There is interesting information coming out of some carriers and we see every other carrier jumping on board or risk losing lots of (healthy) clients prior to the roll out of Health Exchange plans Jan 1st, 2014.  It's call the Health Reform Pump Fake and it's a term you're going to hear a lot of going into the end of 2013.  It could potentially save you $1000's of dollars if you don't qualify for a health subsidy and do not have Grandfathered status.  Let's understand what it is, how it works, and how you can take advantage of it

The Health Reform Pump Fake explained

California has been a leader in the switch over to health reform and Exchanges.  They have invested heavily and largely look situated to meet deadlines for quoting health reform plans (Oct 1st, 2013) and actually enrolling and issuing plans (Jan 1st, 2014).  There was a concern originally that if every existing member (that is not Grandfathered...we'll touch on this later) rolls over to a new Reform plan Jan 1st, 2014 and new enrollees coming onboard (the currently uninsured who might receive a subsidy) also enroll then, the system (read as Exchange, carriers, agents, etc) would be overwhelmed.  That's a legitimate concern.  California did the right thing and stipulated that people would roll over to a new Reform plan (either Exchange or non-Exchange) on their anniversary month.  For example, if you originally enrolled for a May 1st effective date in a prior year, you would be able to stay on current coverage (providing the carrier still offered it) as of May 1st, 2014.  Many people quickly saw an interesting result...what if your anniversary was 12/1?  You could essentially stay on your current plan until 12/1/2014 or buy 11 months of savings assuming your current plan is cheaper.  That's happenstance.  What came next was the Health Reform Pump Fake.

A California carrier starts the pump fake ball rollling

An enterprising carrier realized this strange effect and decided to offer groups (companies that offered health insurance to their employees) an expedited 12/1 renewal date in 2013.  Regardless of when they started, the carrier would renew them 12/1 so they could stay on their current group plan (and more importantly...rates) until 12/1/2014.  A good idea seldom happens in silence and other carriers have or will have to match.  Why?  If your carrier doesn't offer such a deal, you'll switch health carriers 12/1 to essentially do the same thing as the Pump Fake.  Why would companies want to avoid the change over.

Forecast for higher rates on the Health Exchange market

Costs are expected to be higher on the Health Exchange plans and in some cases, much much higher...even on the group health market.  11 months of significant savings will entice many groups to either early renew with their carrier or switch carriers for comparable coverage.  What's true for group insurance may also work for individuals but with much bigger numbers.  Individuals and families that are healthy may also be able to switch carriers for a 12/1 effective date and lock in significant savings.  There are two groups this probably won't work for.  First, people that make up to 400% of the Federal Poverty Level will likely receive a subsidy towards individual/family insurance (not group) and that will probably be a better deal for them assuming they're comfortable with smaller doctor networks being available.  Grandfathered plans (those started before 10/23/2010 with out changes since) will not need to switch to a new Health Exchange plan so the Pump Fake is not needed for them.  Otherwise, the new rates (un-subsidized) are expected to be much higher than what is currently paid on the market and many health individuals should investigate a 12/1/2013 plan change if it works to their advantage.  These are all complicated issues so please feel free to speak with a broker through our Health Quote page.  You can see rates for the Pump Fake plans during 2013 and also quote the new Health Exchange and Non-Exchange plans (eff Jan 1st, 2014) starting in October 1st, 2013.  Either way, we have you covered. 

 



Los Angeles, Family of 4
making $60K.
  Subsidy=$8,388*


Iowa, Single Adult making $30K
Subsidy=$4,222*

*Based on age, expected costs, and other assumptions according to Kaiser Calculator.  Actual subsidies will vary and official subsidy amounts will be available Oct 1st, 2013. 


Health Subsidy Calculator



 
 


  

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