If Zombies and Axe Murderers Don’t Scare You On Halloween, This Will

photo-1470010616600-f7f4b40e81f8Like a monster from a horror movie, your health insurance premiums just won’t stay down. Last year, the self-employed and others in the so-called “individual market” for private health insurance saw their premiums increase by as much as 50% or more.

They’re ba-ack! This year, they are up again. Insurance premiums for people who get their health insurance through MNSure and the individual market will see premium increases of as much as 50% to 67% and that’s assuming their current policy is even available next year.

Commerce Commissioner, Mike Rothman has described this as “a real emergency situation” putting the squeeze on middle class Minnesotans (twincities.com/pioneer press).

If you are one of the 250,000 Minnesotans who buy your health insurance in the individual market, you already know this.

What you may not know. Not only are premiums on the rise, but your current insurance policy may not even exist next year.

After losing $500 million, Blue Cross Blue Shield has decided to pull out of the individual insurance market. Cancellation notices went out to policyholders earlier this fall.

The pullout of BCBS from the individual insurance market has created an emergency situation that nearly sacked the entire individual market.

Responding to threats of other insurers to discontinue coverage, Minnesota officials agreed to allow health insurers to cap enrollment and impose stricter limits on the networks in their plans.

What this means for you. A cap on enrollment means that health insurance companies will stop taking new insurance applications as soon as they hit their enrollment cap. Health insurance expert, Greg Mergens, estimates that some insurers will stop taking new applicants within 24-48 hours of the exchanges opening on November 1.

Limits on networks means that your next health insurance provider will make fewer network choices available to you. In fact, even if you don’t change insurers in 2017, it’s possible that your current health insurance provider may reduce the scope your existing network limiting your options in the future.

For example, my kids see a pediatrician in one network. My wife and I use doctors that are in another network. This year we are all on the same policy. Next year, someone in our family may have to switch networks and lose their doctor or we’ll have to go with more than one policy for our family which means double the deductibles and double the of pocket maximums.

Compared to many other families, however, we are the “lucky” ones. What about people with more complicated health issues?

Pam, a self-employed client of mine suffers from a chronic and potentially fatal illness. Like most people with chronic illnesses she has specialists and receives treatment from more than one healthcare system. Next year she will need to make hard choices including which doctors to keep and which to replace.

5-Step Action Plan. If you are in the individual insurance market, there are some things you need to do right now. Below are 5 steps you need to take BEFORE November 1.

  1. Contact your current insurer. Find out how much your premiums will increase, and if your insurance coverage, your network, or any other details of your health insurance will change in 2017. Now is the time to read the fine print and understand what your health insurance does and does not cover.
  2. Visit the MNSure website. There you will be able to get quotes from various insurers, calculate an estimate of your eligibility for a Federal insurance subsidy and get other information prior the November 1 start of the open enrollment period. You can even apply for coverage directly on the MNSure site or get a list of “assisters” who can help you with find the right coverage for you and your family.
  3. Consult with a health insurance specialist. I use Greg Mergens of Greg Mergens Insurance and I have referred others to him as well. Buying your health insurance through a specialist like Greg costs no more than buying it directly from the insurance company. The benefit of working with a specialist is that they know the features of the various policies and can help you make a more well informed decision regarding your health insurance.
  4. Reduce your taxable income. If your income is just above the cutoff for the Federal insurance subsidies ($97,200 for a family of four) do whatever it takes to get below that number. These subsidies come in the form of a tax credit (a dollar-for-dollar reduction in the amount of tax you pay) and can be quite significant – tallying up to thousands of dollars over the course of a year. However, if you make $1 over the income limits, your subsidy is $0.
  5. Act now. As in RIGHT NOW! Open enrollment starts at midnight, November 1. Some health insurance companies may reach their enrollment caps within a day or two – maybe within hours.  If you wait until later in the open enrollment period to purchase your insurance, your options could be quite limited.