The Problem: Rising Health Insurance Rates
With the June now upon us, it is officially the rate-setting season. It’s the time of year when health insurers tell state and federal regulators how much they plan to charge for premiums next year. However, as of now, the Trump administration has yet to announce whether or not the federal government will continue offering cost-sharing reductions (CSRs) – next year, or even next month. Because this matter remains unresolved, health insurance companies have to find away to cover the costs if they no longer have the support of federal CSRs.
Losing CSRs, health insurance companies will likely continue to exit the marketplace. As with Aetna and Humana, carriers have lost a significant amount of money on the exchanges. Without CSRs, carriers will lose even more money, prompting them to leave. If they choose not to leave, then they’ll likely raise health insurance rates. For the 2018 plan year, health insurance rates on the individual market will likely see substantial increases. As more carriers exit the marketplace, the remaining carriers intend to increase the health insurance rates to accommodate the imbalance of sick and healthy policyholders. This similar issue happened last year and will likely remain an issue during this year’s Open Enrollment.
The Solution: Bronze Plan + Supplemental Health Insurance
Instead of simply paying the increasingly high rates for gold and even silver qualified health plans, consumers should consider a bronze plan. Bronze plans have lower monthly premiums than the other metal plans. However, the bronze level has higher out-of-pocket expenses. To bridge the gap left by high deductibles, consumers should pair a supplemental plan with their bronze plan. This is not only more cost effective, but it also provides better coverage.
With a qualified bronze plan, consumers benefit from having their pre-existing conditions covered. Moreover, they become exempt from the tax penalty. Then, the added supplement protects them from out-of-pocket exposure. Overall, this is the best option for most consumers on the individual market. Keep this in mind as the next Open Enrollment approaches and as the health insurance rates continue to rise. Be proactive and reach out to an insurance agent today. They’ll keep you apprised of the ever-changing healthcare industry, especially with regards to health insurance rates. In addition, they’ll ensure you know all your options so that you can find a health plan that’s right for you.
Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions. So if you have any questions or concerns, comment below and your question may be the topic of our next video!
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