Navigating the Healthcare Maze

I-85 and I-285 intersect near a host of heavily-traveled feeder roads, a maze of on-ramps, exit-ramps, underpasses, and flyovers dubbed Spaghetti Junction. Also called Malfunction Junction, the roads can be confusing, jammed, delay-prone, and frustrating.

"Malfunction Junction" could describe the intersection of healthcare and the Affordable Care Act (ACA). At the very least, akin to a perplexed driver approaching Spaghetti Junction at 70 mph, the myriad of options confuses those distracted by things like living life, working, raising kids, running an enterprise, caregiving, or enjoying retirement. The much touted web site, healthcare.gov, can be jammed, delay-prone, and frustrating, as can the state exchanges.

 The ACA imposes requirements on individuals, employers, insurance and healthcare providers, some now in force and some effective in 2015. Just as a GPS might help a driver navigate Spaghetti Junction, an expert well-versed in health insurance can assist a person in decision-making while regulators turn our healthcare system inside out. Erica Dumpel, CLU, an insurance counselor in Peachtree Corners, GA, is such a guide.  (See www.cdainc.net).

With the Affordable Care Act “one size does not fit all,” Erica emphasizes. Different groups and individuals will be impacted differently and one must explore options, taking nothing for granted. Individuals must choose between maintaining or applying for coverage. Those not covered must sign up by April 1 or prepare to pay a penalty.

Georgia has opted not to create a state  insurance exchange so Georgians must turn to healthcare.gov. Individual plan holders or those buying insurance on federal or state exchanges face multiple decisions.  The ACA is  a cost-sharing scheme.  An analysis by USAToday  (1/15/14) indicated that the cheapest Bronze plan could expose an individual to an annual deductible of $5,082; a family, $10,403. The paper pointed out that “even modest cost sharing can prove unaffordable (as) most Americans have less than $3000 to cover (unexpected) costs.” Even the Silver plan socks a family with a deductible of $6,131. The Gold and Platinum plans cost more in premium but have lower deductibles.

Individuals must weigh tradeoffs. Apply or go without insurance and pay a fine? A January report by McKinsey & Co. indicated that of people who shopped for insurance on the government web site but declined to purchase, 52% of those surveyed cited cost as the reason. (WSJ, 1/18/14). Does a shopper qualify for a subsidy? What prescriptions do you take and are they covered? Who is the provider? What doctors and hospitals are in the plan? An insurance counselor like Erica Dumpel would be personal shopper in the retail world.

Those with pre-existing health conditions or persons employed in a job they disdain only for health insurance coverage may have new options on the exchange and should shop.

Those enrolled in Medicare are not directly impacted by the ACA, but still should shop each year. Medicare Advantage Plans and other coverages change each year. Your health may change and a new policy may be better suited to your situation. Just because a policy is peddled by seniors organization does not mean it is best for you or your aging mom or dad. Will your doctor still be in your plan next year? Will your prescriptions be covered?

For coverage starting in 2015, the proposed Open Enrollment Period for Medicare is November 15, 2014–January 15, 2015. We encourage our Medicare clients to revisit their policies, engaging help from someone like Erica if need be. If you turn 65 in 2014, you should apply for Medicare through your local Social Security office three months prior to your birthday month. Another maze! You wonder, “Who moved my cheese?”

The employer mandate under the ACA was delayed until 2014 in a ploy to get past this year’s elections. Many employers renewed coverage in late 2013 to buy time through 2014. There will be a scramble late this year as decision time approaches, especially for small business with less than 50 full time employees. If you are an employer, do you drop a group plan and allow employees to select plans on the exchanges with or without subsidy?  Do you consider a professional employer organization (PEO) like Inspirity to provide group benefits and other human resource services? What other creative funding or carrier options are available?

Large employers with 50 or more fulltime employees may face penalties for failing to offer coverage that complies with the ACA. Who knows what the effect will be on employment statistics or corporate earnings?

Going the wrong way in Spaghetti Junction can result in a head-on collision. An imprudent health insurance decision could be equally expensive and hazardous to your wealth!  

Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA).  Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪ 3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092  ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com