What is a potential advantage of “skinny plans” and what is the potential cost comparison

RMI 2101

FALL 2018

Homework Assignment 5

25 points

No hard copies will be accepted in class. All homework must be submitted on Canvas and time stamped by 5:30 PM EST on the due date. Please use this Homework Template and type your answers after each question.

Read the questions carefully and be sure that you answer the questions asked. Many times students give correct information in an answer but that information is not the answer to the question. Also, utilize proper business writing techniques in your answers, i.e. be complete but concise, use proper grammar, sentence structure, spelling and punctuation.

1. Based on the 2 attached articles on “Skinny Plans” at the end of this document, answer the following:

a. What is a potential advantage of “skinny plans” and what is the potential cost comparison? (2 points)

b. What are 2 potential problems with “skinny plans”? (3 points)

c. Who are the individuals most likely to choose a “skinny plan”? How will this impact the Affordable Care Individual Market? (3 points)

2. Based on this link – https://www.kff.org/health-reform/state-indicator/marketplace-enrollment-2017-2018/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

a. How many individuals enrolled in the Individual Health Insurance Marketplace in 2018 in the United States: (2 points)

b. How many individuals enrolled in the Individual Health Insurance Marketplace in PENNSYLVANIA in 2018: (2 points)

3. Based on this link–

Marketplace Average Benchmark Premiums

(Note: use the sort functionality in the chart in the article)

a. Based on the chart, what is the range (find the state with the highest and lowest ) monthly premium for 2019? (note: this is the premium before the tax subsidy) (2 points)

b. What is the % change in premium from 2014 to 2019 for the state of PENNSYLVANIA? (Note: you have to manually calculate this %) (2 points)

4. Answer the following questions based on this link:

Estimated Total Premium Tax Credits Received by Marketplace Enrollees

a) What is the total amount of tax credits or subsidies that are being provided in 2018 in the United States to make individual health insurance plans affordable to those that qulaify? (2 points)

b) How much subsidy did individuals in the State of PENNSYLVANIA receive in 2018? (2 points)

c) Who ultimately “pays” for these premium credits or subsidies? (2 points)

d) Based on PENNSYLVANIA Premium Rates increasing as noted in your answer in question 3, the subsidies also increased in PENNSYLVANIA to keep these plans affordable for those individuals who qualify for the subsidy. As a result, who are the individuals in PENNSYLVANIA that are most impacted by these rate increases in PENNSYLVANIA and why would they be likely to consider a “skinny plan”? (3 points)

Trump’s ‘skinny’ insurance plans will help millions of families

by Sarah Lee IAugust 09, 201812:00 AM

On August 2, the Trump administration issued a proposed rule allowing the sale of short-term, limited-duration health insurance plans, also known as short-term plans. The new rule extends the renewal period for short-term plans up to a year, a change from the previous Obama-era policy of letting them last only up to three months. It also allows these plans to be extended for up to 36 months.

The longer renewal period will give Americans more options to determine the length of their healthcare policies, at least until they can find a longer-term plan that better suits their needs. This is yet another step in the Trump administration’s plan to undermine rigid Obamacare rules so that working families have better health insurance choices available.

This should be great news, given that 28 million Americans are currently without health insurance, according to the Centers for Disease Control and Prevention, and that most of those people don’t have health insurance because they can’t afford it. One would expect almost universal support for a rule change allowing more healthcare freedom. After all, the plans are already available under Obamacare as a less-expensive option meant to help people who have found themselves between jobs, and insurers and consumers are familiar with short-term plan coverage; the new rule simply increases how long people may remain enrolled in these plans.

Furthermore, these plans are tailor-made for people who earn just enough money (for a single individual, $47,000 per year) to fail to qualify for Obamacare subsidies. This is especially pertinent because Obamacare premiums have risen 105 percent since its inception four years ago-from $232 per person per month to $476 per person, according to The Heritage Foundation.

The new rule allows individuals to carry these plans a bit longer, providing a much-needed option as healthcare consumers seek alternatives to expensive, one-size-fits-all Obamacare plans. Indeed, President Trump has been fighting for increased healthcare choices ever since he signed the “Promoting Healthcare Choice and Competition Across the United States” executive order.

https://www.washingtonexaminer.com/opinion/op-eds/trumps-skinny-insurance-plans-will-help-millions-of-families .

Unfortunately, many so-called patient advocacy groups-such as the American Lung Association, American Heart Association, and National Multiple Sclerosis Society-do not support the new rule. They and other critics claim that the new short-term plans are too “skinny” because they don’t include Obamacare’s “essential health mandates.” For example, many do not cover maternity care, prescription drugs, or substance abuse treatments.

What these opposition groups fail t’o explain is that these plans are not intended to be comprehensive insurance plans, and that not all Americans want or need comprehensive healthcare coverage.

Although “skinny plans” don’t include many of Obamacare’s essential health benefits, the good news is these less-comprehensive plans are much more affordable. On average, they cost $160 per month or less, which is notable when compared to a standard Obamacare Silver Plan, which typically costs $481 per month for a 40-year-old nonsmoker.

Furthermore, thanks in large part to the Trump administration’s new rule, the healthcare industry is developing “next generation” short-term insurance plans, according to a report from the Associated Press. Insurance insiders say these plans will better meet the unique

needs of health insurance consumers who are frustrated with industry and political

infighting.

According to the nonpartisan Congressional Budget Office, during the next five years, roughly six million more people are expected to enroll in either an association health plan or a shortterm health insurance plan, with about 1.6 million expected to choose the latter.

Instead of attacking the Trump administration for political and financial reasons, true patient

advocates should instead praise the additional choice that’s finally being provided to these

millions of Americans.

Sarah Lee ( is a healthcare research fellow at The Heartland Institute.htlps:/Iwww.washingtonexaminer.com/opinion/op-eds/trumps-skinny-insurance-plans-will-help-millions-of-families

Business

Short-Term Health Plans Backed by Trump Are Cheap for a Reason

By Zacha!y’ Tracer and Emma Ockerman July 31, 2018, 10:58 AM ADT

Updated on August 1,2018, 10:03 AMADT

~ Administration issues rule creating wider role for the plans

~ Plans are cheaper but have long history ofpatient complaints

Short-term health plans with a history ofconsumer complaints will get a larger role in the u.S. insurance market under a Trump administration plan to expand alternatives to Obamacare.

The temporary plans, which were originally intended for people betweenjobs, are allowed to offer coverage that’s far skimpier than what the Affordable Care Act requires. The administration has promoted them as a cheaper alternative to Obamacare for individuals who have seen their premiums climb or lost access to doctors. The plans were limited to three months, and President Donald Trump is making them available for longer.

htlps:/Iwww.bloomberg.comlnews/articles/2018-07-31/short-term-heaIth-plans-backed-by-trump-are-cheap-for-a-reason

“This is a really important new option for millions ofAmericans;’ Alex Azar, secretary ofthe

Health and Human Services Department, said in an interview on Bloomberg TV Wednesday. The

plans will be less expensive, he said, but “they may not be right for everybody:’

The rule. released on Wednesday makes the short-term plans available for a duration ofup to a

. ‘. . . .

year, and insurers can make the plans renewable for as lopg as.three years. Under the rule,

insurers are required to warn their customers that the policies may not coverpre-existing

conditions and may offer limited benefits.

Obamacare Alternative

Loosening limits on short-term health plans is just one ofseveral ways the-Trump administration is pushing to weaken Obamacare. The health law’s requirement that Americans buy comprehensive insurance coverage was repealed as part ofthe December tax cuts, which helped open the door for a bigger role for the short-term plans.

About 160,600 people were covered byshort-:term health insurance plans at the end of2016, , according to data from state regulators. The Centers for Medicare and Medicaid Sen1ces has estimated that an additional 1.6 million people may sign up for the plans once they become more widely available.

https:llwww.bloomberg.comlnewslarticlesl2018-07-31/short-term-health-plans–backed-by-trump-are-cheap-for-a-reason

Short-term coverage for an individual cost approximately $124 a month in late 2016, compared with about $400 a month for Obamacare, according to the Centers for Medicare & Medicaid Services.

Fine Print

For some people, though, the cheaper premiums can come at a cost, such as when insurers claim that a cancer treatment shouldn’t be covered because a patient had the disease before buying coverage, as ~~~9.!!!~~K~~J29.!!~~ in October. The plans are effectively banned in New York, New Jersey and Massachusetts, and several other states impose restrictions on them.

State regulators told the administration that they’ve received complaints from consumers about the plans failing to cover their treatments. Pennsylvania’s insurance regulator said some consumers complained about services that weren’t covered, based on fine print in plan policies.

“There are many lawsuits and consumer complaints around the country stemming from unpaid bills” resulting from the short-term plans, Richard Besser, president ofthe Robert Wood Johnson Foundation, the biggest U.S. health philanthropy, said in a letter to the administration opposing the expansion ofthe plans.

Anna Letsos, a 48-year-old consultant in Chicago, picked short-term insurance for herself and her family this year, instead ofan Obamacare plan. To get around the three-month limit, she purchased four plans to run back-to-back, a practice called stacking. Letsos picked the plan to preserve access to the top hospitals and doctors in her hometown.

Instead, she’s been stuck with surprise bills and mounting costs for services she thought the plan would cover but hasn’t. “I don’t know what the rules for the game are, and clearly no one is going to tell me;’ said Letsos. Letsos received a mammogram in February, thinking the bill for the test would be picked up by her insurer, National General Accident & Health. Mammograms are one ofthe preventive

https:/Iwww.bloomberg.comlnews/articles/2018-07-31/short-term-health-plans-backed-by-trump-are:-cheap-for-a-reason

11/3/2018 Short~Term Health Plans Backed by Trump Are Cheap for a Reason -Bloomberg

screenings that health fisurers are required to cover under Obamacare, but the same rules don’t apply to short-term plans.

Instead, the insurer has yet to cover any ofthe cost, leaving the family paying about $800 a

month in premiums to keep a plan she says is inadequate. The company has also requested to

review five years ofher medical history before paying for her care.

“It’s not really covering what I need it to cover,” she said.

National General Accident & Health, a unit ofNew York-based National General Holdings Corp., didn’t respond to requests for comment.

‘Skinny’ Plans

Short-term insurance plans are time-restricted for a reason, according to Sabrina Corlette, a professor at”Georgetown University’s Health Policy Institute. They don’t cover enough to qualify as real insurance, are loosely regulated and don’t always include coverage for pre-existing conditions, she said. The plans also are able to charge a higher rate based on a person’s health status, and usually don’t include coverage for such things as maternity care or prescription drugs.

“It’s very much a buyer-beware situation;’ she said. Still, for customers who don’t qualify for insurance subsidies and have seen their plans rocket up in price, the short-term options can be a risk worth taking.

Scott Smith, 59, lives in Cornelius, North Carolina, near Charlotte. Only one insurer –Blue Cross and Blue Shield ofNorth Carolina –offers insurance on the Obamacare marketplace in most of his state. He and his wife were paying close to $2,200 each month for an insurance plan with a high deductible, so they started looking into short-term coverage this year.

Smith was rejected after the insurer found out he had a skin cancer lesion removed years ago, and decided to go without insurance. His wife, though, was ultimately able to get coverage for about $1,300 for a year by combining multiple short-term plans.

https:llwww.bloomberg.com/news/articles/2018-07-31/short-term~health-plans-backed-by-trump-are-cheap-for-a-reason 4/5

“Hands down, I’d do the same thing again,” Smith said.

Letsos, too, said all she wanted was an option to buy a plan she liked. Just months away from

when people can sign up for Obamacare’s 2019 coverage, she said she’s getting robocalls

advertising more short-term plans she’s never heard of, promising to let her keep her doctors for

a lower sticker price.

“Do we just take some junk plan and put up with that?” Letsos said. “I am not one to sit back and wait for somebody to give me permission to go get the care 1 need.”

htlps:/Iwww.bloomberg.com/news/articles/2018-07-31/short-term-health-plans-backed-by-trump-are-cheap-for-a-reason

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