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Wow!.. brother AC sounds ready to Ratt N' Roll...I love it man!
Preparing For 2015 Open Enrollment
- Thread starter AllenChicago
- Start date
Wow!.. brother AC sounds ready to Ratt N' Roll...I love it man!
AC,
You know this, but probably forgot, so I'll remind you so you can be happy.
Subsidy=(reference plan premium)-(allowable contribution)
Allowable contribution is that sliding scale of a % of income based on your FPL level. That percentage, and whole number, is constant.
So, for clients on reference silver, regardless of the premium increase, they pay the same amount of money (with a bigger subsidy to make up the difference, as long as their FPL doesn't change). No matter how big the increase is, they see no change in contribution. I presume you, like me, have your clients that most need a subsidy on something similarly priced to (or cheaper than) the reference plan.
Yes, clients on higher priced plans, because of the way it's calculated, will see a change in contribution slightly less than the raw % increase (I.E. a 10% increase is a 9% increase in premium.) Clients on cheaper plans will actually see a decrease in contribution if the increase is the same % as the reference plan's increase.
Of course, we never see a flat % increase across all products, so your mileage may vary.
You know this, but probably forgot, so I'll remind you so you can be happy.
Subsidy=(reference plan premium)-(allowable contribution)
Allowable contribution is that sliding scale of a % of income based on your FPL level. That percentage, and whole number, is constant.
So, for clients on reference silver, regardless of the premium increase, they pay the same amount of money (with a bigger subsidy to make up the difference, as long as their FPL doesn't change). No matter how big the increase is, they see no change in contribution. I presume you, like me, have your clients that most need a subsidy on something similarly priced to (or cheaper than) the reference plan.
Yes, clients on higher priced plans, because of the way it's calculated, will see a change in contribution slightly less than the raw % increase (I.E. a 10% increase is a 9% increase in premium.) Clients on cheaper plans will actually see a decrease in contribution if the increase is the same % as the reference plan's increase.
Of course, we never see a flat % increase across all products, so your mileage may vary.
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This makes my head hurt. But let me throw these scenarios at you:
1. a current or new carrier rolls out a cheaper HMO second lowest cost silver plan in the market.
2. a client is currently on the second lowest cost silver plan, , and another carrier comes in with a lower price second cost silver plan.
In both scenarios, I believe the out of pocket client premium will go higher.
We can create scenarios all day.
Yes, if you change the reference, you change the contribution. Heck, if it's cheap enough, you could theoretically pay more for your plan even if the renewal is LESS than this year's rate! You could even disallow subsidies to those under 400% FPL (if the reference premium is less than the allowable expense for a given FPL%) which has happened in quite a few states.
I'm trying to give a generic, reasonable, apples-to-apples comparison assuming as much stays constant as possible. It's reasonable to assume that within the same population, the reference plan premium will not vary drastically, even if it ends up being a different product.
Yes, if you change the reference, you change the contribution. Heck, if it's cheap enough, you could theoretically pay more for your plan even if the renewal is LESS than this year's rate! You could even disallow subsidies to those under 400% FPL (if the reference premium is less than the allowable expense for a given FPL%) which has happened in quite a few states.
I'm trying to give a generic, reasonable, apples-to-apples comparison assuming as much stays constant as possible. It's reasonable to assume that within the same population, the reference plan premium will not vary drastically, even if it ends up being a different product.
Ray, I appreciate your response and figured as much. Just wanted to make sure my thought process was in line. With these 3 variables changing, every client must revisit their plan every year:
1. Second lowest cost silver plan in area
2. Premiums on current health plan
3. MAGI / FPL projection for following year
Won't this be fun each OEP, and for a Jan 1st effective date, and password resets, we effectively have 30 days to make this all happen. Right now, that means 20 per day for me......not possible. Need............to.............find........a..........better ...........process.
1. Second lowest cost silver plan in area
2. Premiums on current health plan
3. MAGI / FPL projection for following year
Won't this be fun each OEP, and for a Jan 1st effective date, and password resets, we effectively have 30 days to make this all happen. Right now, that means 20 per day for me......not possible. Need............to.............find........a..........better ...........process.
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Most of this should be able to be done automatically with the correct computer program...probably even an Excel spreadsheet... Just don't give it to Cover Oregon to figure out.
The real problem will be if the client's current plan decides to drop out of the exchange. Then they'll have to start over completely from scratch.
- Thread starter
- #17
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Ray, thanks for reminding me of the sliding scale that limits the percentage of income that's allowed for premiums for <401% FPL applicants. Since most (more than 90%) of my subsidy-eligible clients are on plans that cost more than our 2nd lowest cost Silver, this coming Fall will be interesting, to say the least. Your sharp mind and concise forum posts are appreciated more than you realize, by more people than you think, Ray. Thanks again!
-AC
I'm glad I could help.
Yes, fall will be interesting. I've been working under the assumption that the only thing that carries over is the "profile" (login, password, names, dobs, etc.) and that all the financials have to be re-evaluated. Even if it's not mandatory, I'd wager the vast majority of people are in a different financial situation next year than they are right now.
Plan for the worst and hope for the best, as they say.
Yes, fall will be interesting. I've been working under the assumption that the only thing that carries over is the "profile" (login, password, names, dobs, etc.) and that all the financials have to be re-evaluated. Even if it's not mandatory, I'd wager the vast majority of people are in a different financial situation next year than they are right now.
Plan for the worst and hope for the best, as they say.
Unfortunately, I don't think things will stay even keeled enough to make that comparison. In states like Iowa and I know Yagents has shared in AZ that the benchmark plan is priced so low that the majority of under 400% FPL didn't receive a subsidy. You have to get into the mid to high 200% range in many cases to even qualify for a subsidy. Unless the benchmark plan price changes dramatically (and it appears GR and possibly Assurant is going to jump in next year which makes things more interesting), those without subsidies this year likely won't see them next year which means their plans could change dramatically and cost them much more.
There are too many variables to be certain. First, where will 2015 FPL land next year? Likely higher but not dramatically. Where will benchmark plans land? Likely not much change due to possible new and larger players. Where will all other plan premiums land? Likely higher to help the Silver plans compete not to mention to help the market correction from huge MLR losses in 2014. Couple all of this with the fact that the median income has been declining each year since 2007 and now it is even harder to put a finger on the pulse of what we will be faced with even six months from now. We as agents will be earning our income the old fashioned way for a while. I think there will be great fluctuation in prices for the first 3-5 years until MLR gets under control. By then, the system could change dramatically continuing the uncertainty.
What I do think is going to blow up is when they do their taxes and see the clawback. So either prior to Feb 15, we are going to be changing policies last minute at healthcare.gov (won't that be fun?) or getting yelled at post OEP because they didn't like the clawback and we have to tell them "Too bad. You have to wait until next year"
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