Health Coverage in a Crisis: A Medicare Customer Question

Health care coverage is a high priority on the minds of millions of Americans this year, especially as the country slowly makes progress in its efforts to beat back COVID-19. But with many options available and widespread, lingering confusion about how to decide between them, your clients may see choosing a health care plan as an impossible task.

If you specialize in selling health insurance, this may be your life. If you have focused mainly on life and annuities, the health insurance selection process may seem daunting.

No matter an individual's stage of life or employment situation, there are options available, and this article will break down some options and for whom they are most appropriate. However, there is no replacement for the advice that an experienced health insurance expert can provide. It may make sense for you to have referral relationships with health insurance experts, or a website you can use to guide clients to suitable resources.

1. As an older worker who can't afford the employer's health plan, what are my options?

Employees who are 65 and older and still using employer-sponsored health coverage would be well-advised to compare their benefits and rates to Medicare.

While many might assume that the employer health care policy is the best option, employer health insurance premiums increased by 4% last year, with the average annual premium for individuals coming in at $7,470 and likely to continue to rise, meaning Medicare can be a more affordable option that better suits the needs of older Americans, as monthly premiums for Part B start at $148.50 and deductibles at $203 for 2021. While Medicare's open enrollment runs from Oct. 15 to Dec. 7 each year, it's worth noting that anyone who is 65 and older and currently working may initiate a special enrollment period to drop their employer plan and enroll in a Medicare plan, throughout the year.

2. I recently lost my job. Will I lose my health insurance?

For individuals who were recently unemployed, one traditional route offered to ensure health insurance continuity is COBRA, short for the Consolidated Omnibus Budget Reconciliation Act. Federal law requires that employers with 20 or more employees offer this temporary health care plan to prevent coverage disruption. Having insurance coverage in the middle of a crisis is critical, but as COBRA plans are often expensive, they may not be the best option for employees or their employers. Thankfully, there are additional alternatives.

3. What do I do if I'm uninsured?

Medicaid, which serves more than 70 million Americans, is the largest source of health coverage in the United States, but it is often overlooked and misunderstood as a health care option. In response to the pandemic, federal legislation increased Medicaid funding and enabled states to provide coverage for testing to assist individuals without insurance. Programs were also expanded to provide telehealth services as an alternative to make care more accessible. Not everyone is eligible for Medicaid, however, as enrollment is dictated by income and family size.

Marketplace plans are one more alternative for those who don't meet Medicaid requirements. Marketplace open enrollment period generally ends on Dec. 15, but President Biden signed an executive order opening a Special Enrollment Period (SEP) for Marketplace plans in 2021, allowing anyone to enroll in a Marketplace plan from Feb.15-May 15, 2021. This option is mandated across 36 states that use the HealthCare.gov site. The other 14 states and D.C. are also strongly encouraged to do so as well, and most of them are allowing an SEP period to apply for a new plan or change current plans. This SEP is extremely beneficial for any recently unemployed people looking for an alternative to COBRA plans.

No matter the situation, choosing a health care plan is an important and difficult decision to make, adding the stress of a global pandemic can make the choice even more tough. Everyone needs to do their due diligence, which includes researching the options and calling upon the help of an insurance expert who can guide individuals toward a plan that meets their financial and medical needs.

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Bethany Cissell is a health care insurance services specialist at Allsup.