Shopping for Individual Coverage: Buyer Beware

We know many individuals are struggling to keep their individual healthcare coverage due to the expiration of the Biden era subsidies. The purpose of today’s newsletter is to warn readers that in difficult times, questionable product alternatives proliferate. 

If it looks too good to be true, that may be for a reason.

Many Affordable Care Act-compliant options in the individual market disappoint due to high premiums, high deductibles and limited networks. However, Marketplace Plans are actual insurance products that are regulated by a government entity with mandated reserves. Some creative alternatives appear to be insurance, especially when they’ve purchased access to a recognized company’s provider network, but they are not actual insurance products and are much more likely to deny claims and/or go out of business.  

What should a consumer know?

• In our view, it is usually best to shop for Plans on healthcare.gov, your state’s official Marketplace, or a reputable health insurance company’s site. 
• There is higher risk when marketed to by an association, broker or agent. Although there are many fine, reputable brokers in the field, there are too many who are not.
• Know that any plan that includes a health questionnaire is not ACA-compliant. 
• Know that a Co-op Plan is not insurance. 
• Check the National Association of Insurance Commissioners (NAIC) website or your state’s Insurance Department website to verify licensure.
• Question any Plan when Plan language describes a union plan anyone can join.

The Biden era subsidies were too generous in some instances and created perverse incentives such as people applying for individual subsidized coverage rather than participating in their employer’s plan. That Congress couldn’t agree to maintain a percentage of income cap for health insurance premiums, however, is most unfortunate. Now that we’re back to subsidies being tied to 400% of the federal poverty limit and below, the incentives for many are to stay below that income level rather than prosper in today’s society. 

With an issue as important as healthcare, the wellbeing of our country should be more important than political party affiliation.  Maybe one day Congress will surprise us by productively working toward more sane healthcare policy. We hope so.