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Who needs an insurance mandate?

It’s now been a full year since the individual mandate penalty was reduced to zero, so we wanted to take a quick look at the impact this change could have on the future of the Affordable Care Act.

ACA lawsuit

One big effect of removing the penalty from the individual mandate is that it can no longer be deemed a tax, and for that reason a federal appeals court ruled the individual mandate unconstitutional. As we explain in a recent blog post [link to the post], the case has been sent back to a lower court to determine which ACA provisions, if any, can be severed from the mandate. The plaintiffs in the case are relying on the 2015 decision in King v. Burwell, which concluded that Congress intended for the individual mandate to work hand in hand with the guarantee issue provision and the premium tax credits, in making their argument that the entire law should be found unconstitutional. Here’s an excerpt from the 2015 decision:

ACA decision unlikely before election

On December 18, 2019, a federal appeals court in New Orleans ruled that the Affordable Care Act’s individual mandate is unconstitutional, calling into question the future of the entire law.

In a 2-1 decision, the court found that the individual mandate is no longer a tax since the penalty has been reduced to zero. As explained in an article by Kevin Daley with The National Interest, “the mandate is no longer raising revenue,” and therefore “cannot be justified as a tax.”

CMS transition to new Medicare Beneficiary Identifier is complete

As AHCP first reported nearly two years ago, the Centers for Medicare and Medicaid Services has been working to replace everyone’s Medicare card and assign them a new Medicare number, known as a Medicare Beneficiary Identifier (MBI). As of January 1, 2020, that process is complete and CMS will no longer process claims that are submitted with the old number.

Why are they doing this?

As Experian explains, “The shift to MBIs is an effort to protect patient information and address the vulnerabilities that come with relying on Social Security Numbers (SSN) to verify patient identities.”

CMS elaborates on this goal, which is “To decrease Medicare Beneficiary vulnerability to identity theft by removing the SSN-based HICN from their Medicare identification cards and replacing the HICN with a new Medicare Beneficiary Identifier (MBI).”

Plan F no longer an option for new Medicare beneficiaries

As a reminder, Medicare supplement plan F is no longer an option for new Medicare enrollees. Anyone aging into or signing up for Medicare on or after January 1, 2020, will not be able to purchase a Plan F Medigap plan. Plan C is also being eliminated as an option for new enrollees.

AHCP first wrote about this change in December 2018, so hopefully you were prepared, but we wanted to share a reminder since you may have clients—including existing Medicare supplement clients—who have questions about this development.

The Cadillac Tax is Finally Dead

After years of lobbying by countless interest groups, Congress has finally killed the dreaded Cadillac tax.

Officially known as the High Cost Plan Tax (HCPT), this unpopular provision of the Affordable Care Act was originally scheduled to go into effect in 2018. The implementation date was pushed back multiple times (most recently to 2022) as lawmakers kept kicking the can down the road, but the failure to permanently repeal the tax created confusion for employers of all sizes.

Although Mostly Closed, the Donut Hole is Still an Issue for Consumers

A recent Boston Herald article describes the trouble that some seniors have paying for prescriptions in the Medicare coverage gap, commonly referred to as the “donut hole.” The article tells the story of Judith Pais, who ran out of her medication in November and had to wait until the new year to purchase her prescriptions because the cost of her medications had “skyrocketed” from $120 per month to more than $500 after she entered her Part D plan’s coverage gap.

As the article explains, the coverage gap in 2019 begins after “a patient has spent $3,820 on covered drugs. Once you hit the gap, patients pay 25% of the plan’s cost for covered brand-name prescription drugs and 37% for generics.” Because of the high price of her drugs in the donut hole, Ms. Pais “immediately decided to cancel the prescription and used expired, leftover medication to get her through the rest of the year.”

As the article says, she’s not alone. According to Leigh Purvis with AARP’s Public Policy Institute, “the coverage gap has been slowly closing, but people are hitting the gap sooner and sooner because of sky-high drug prices.” The result is that people struggle to pay for prescriptions and may go without needed medication.

Renewing As Is – Medicare Consumers are Staying Put

The fourth quarter is a stressful time. Not only do brokers have to deal with the same year-end stuff as everyone else, like getting ready for the holidays, it’s also the busy time of the year in the insurance industry. And that’s true whether you sell group, individual, or Medicare products.

For Medicare, the annual election period runs from October 15 through December 7, a mere seven-and-a-half weeks. During this time, we’re expected to renew all of our existing Medicare Advantage and Medicare Part D business while trying to write some new policies. That’s difficult to do because, as we’ve already said, our clients are also busy at this time of the year.

An Uneducated Decision

This will come as a surprise to absolutely none of you, but, according to Forbes, “Healthcare Consumers Lack Knowledge Of Basic Health Insurance Terms.” Actually, that’s the name of a December 3 article that summarizes the findings of a recently released survey by Policygenius that shows, among other things, just “how challenging health insurance is for many American consumers to understand.”

The survey, with a sample size of 1,500 people, found that “many people avoid care due to uncertainty over their coverage,” with about half of respondents unable to correctly answer whether any of the essential benefits they were asked about are covered on their plan. The survey has been conducted for the past three years, and the “cumulative findings suggest that people are increasingly confused about the law and their coverage.”


When the Trump administration decided in 2017 to stop reimbursing insurers for cost-sharing reductions on silver-level plans for those who qualify, carriers responded by raising the price of their silver-level plans across the board, a practice known as “silver loading.”

A recent Fierce Healthcare article reports on this practice, noting that the effect on consumers is vastly different depending on whether they are receiving a premium tax credit or not.

The Benefits of Working from Home

We recently posted an article entitled “Your place or mine? Where do you sell health insurance?”. In it, we discussed the pros and cons of meeting clients at their homes or places of business versus having them meet you in your office. The article made the assumption that all agents have an office that they go to, but that’s definitely not the case. Some very successful agents have made the decision to work from home, foregoing an outside office and the benefits that come with it. In this article, we’ll take a look at some of the benefits of working out of your house.

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