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CHIP FINALLY Gets Reauthorized

The Children’s Health Insurance Program, or CHIP, has been in the news recently as lawmakers debate the future of this popular safety net program for children of lower-income families. The program, which has been around since 1997, has enjoyed nearly universal bipartisan support from the beginning, but that support has come into question recently as Congress allowed funding for CHIP to expire four months ago and seemed to be in no hurry to reauthorize it. As worried parents waited to see what our lawmakers would do, CHIP reauthorization took a back seat to tax reform.

CHIP is a federally funded program with state oversight and administration. While eligibility and benefits vary by state, families with incomes up to 200% and in some states 400% of the federal poverty level may qualify, and a single low monthly premium usually covers all children in the household.

Medicare Premiums Vary By Income

If you sell Medicare supplements, Medicare Advantage plans, or Medicare Part D prescription drug plans, you’ve probably been asked on multiple occasions how much Medicare Part B costs. If you’re like a lot of agents, you may have answered with the standard Part B premium amount, which is $134 per month in 2018. This can be dangerous.

It turns out that the amount people pay for both Medicare Part B and Medicare Part D can vary wildly by income, so before giving a generic answer with the cost that applies to most Medicare recipients, you should ask a couple questions. Better yet, you can simply provide your clients with the information about how Part B and Part D premiums are determined and then let them answer the question themselves.

Congress Postpones Three ACA Taxes

For the past several years, the insurance industry has been urging Congress to eliminate three unpopular taxes that were designed to help pay for the Affordable Care Act. They finally listened… sort of. While the taxes have not been eliminated, the House and Senate did vote to postpone the Health Insurance Tax (HIT), the tax on High Cost Health Plans, better known as the Cadillac Tax, and the Durable Medical Equipment (DME) Tax. This was part of the January 22 deal to keep the government open for three weeks. The same bill also reauthorized the Children’s Health Insurance Plan (CHIP) for six years.

Medicare Part D Notification Requirements for Your Group Clients

If you sell group health insurance, there are a couple Medicare notification requirements your clients need to be aware of. The law requires that companies whose group health plans include prescription drug coverage to notify Medicare-eligible policyholders whether their prescription drug benefit is “creditable,” which means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage.

For these employers, there are two annual disclosure requirements, explained in the next two sections.

Dependent Rates Soar in 2018

As you probably noticed during this year’s open enrollment period, the rates for children under age 21 have increased significantly, forcing many clients to ask if there’s another option. This is true for both individual and small group plans, and its cause dates back to some regulations issued by the Department of Health and Human Services (HHS) in December of 2016.

Each year, HHS publishes its Notice of Benefit and Payment Parameters, and the 2018 version of this notice was released about thirteen months ago. In it, HHS changed the federal age curve for the first time since the Affordable Care Act became law. Specifically, the age curve changed for people age 20 and under who have coverage in the individual and small group markets.

Is the ACA Really Dead?

One year into Donald Trump’s presidency, most would agree that his biggest legislative victory is the recently-passed tax reform legislation. Tax reform was a top priority for the new president, and the bill’s passage helps President Trump fulfill an important campaign promise. Two promises actually:

  1. While running for office, candidate Trump promised to cut taxes, and though many worry that the new tax law benefits corporations and the wealthy much more than it benefits the middle class, the bill does provide at least temporary tax relief to a majority of Americans.
  2. Embedded in the tax bill, though, was a repeal of the unpopular individual mandate. As a candidate, President Trump had promised to get rid of the mandate, and the bill he signed into law on Friday, December 22 makes good on that promise.

To hear President Trump tell it, though, the new law not only repeals the individual mandate but actually kills the ACA altogether.

Millions May Qualify for Special Enrollment

As you know, the Affordable Care Act gives people the opportunity to purchase or change health coverage during the ACA’s individual open enrollment period. And, as you also know, the 2018 open enrollment period was only half as long as last year’s. For 2017 plans, people had three months to sign up; for 2018, they only had six weeks. The open enrollment period officially closed December 15, 2017.

BUT—and this is a big one—millions of people may still be eligible to select an individual health plan for 2018. That’s because the Affordable Care Act gives people who have certain qualifying events an opportunity to purchase health insurance during a 60-day Special Enrollment Period (SEP).

Status of the Individual and Employer Mandates

When the Affordable Care Act was signed into law nearly eight years ago, there was a lot of criticism about a number of different provisions. Some said that the guaranteed issue rule, while noble in its goal to allow anyone who wants health insurance to buy health insurance, would lead to adverse selection and higher insurance rates. Others said that the premium tax credits and expanded Medicaid would blow up the budget. And still others said that the modified adjusted community rating provision would hurt a carrier’s ability to rate based on risk. Even with all that criticism, it could be argued that the two most controversial and unpopular provisions of the massive health care law were the individual and employer mandates. And now, eight years later, those two provisions are both in the news again.


By now you’ve certainly heard the news: CVS has announced plans to purchase Aetna for a record $69 billion, the largest-ever merger in the health insurance industry. CVS currently has roughly 10,000 pharmacies, and, if approved, the deal would allow the pharmacy giant to offer health care services and prescriptions to Aetna’s 22 million members.

Approval isn’t a certainty. As you’ll recall, the proposed mergers between Aetna and Humana and between Anthem and Cigna were both shot down by the Obama Justice Department because of the fear that the mergers would limit competition and reduce consumer choice in a number of markets. We don’t yet know how the Justice Department will respond to the CVS-Aetna deal. It is worth noting that we have a different administration with a very different mentality now, so it’s possible that there won’t be much pushback, especially since this merger isn’t between two carriers but rather between a carrier and a retail pharmacy chain; since it’s a vertical acquisition, it shouldn’t have the effect of limiting competition.

2017 Year-End Wrap Up

As we near the end of another year, it’s time to close the books on 2017 and look ahead to 2018. As we do, it’s helpful to review the big news stories from the last 12 months and determine whether they’ll carry over to the next calendar year or just be interesting moments in history that we can look back on but stop worrying about.

It certainly was an eventful year, one that’s worthy of a series of articles, but we’ll keep it as short as possible. And instead of a timeline of events, we’re separating the big health insurance news stories into two categories: 1) over-and-done-with and 2) ongoing. Hopefully, you’ll find this beneficial as you map out your success strategy for 2018.

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