Individual Family Health Insurance past present and future

Individual & Family Health Insurance past, present and future forecast Justin Clements, MBA Co-Founder Remodel Health Co-Host “Agency Growth” Podcast News Contributor

Everyone Hates Health Insurance … Except Dwight

Does America Hate All Insurance?

Auto vs. Health Auto Health Protection for UNFORESEEN expenses • Underwritten rates? • Protect from the risk of major accident • Protect from unforeseen major medical event • Preventive maintenance? • Tire Rotation • Oil Changes • Wiper blades … free for all? ? ? • Can one predict or foresee preventive cost? • Why do we expect preventive coverage? • What impact does it have on premiums? • Do we want consumer driven healthcare? • Rates based on risk factors • Do we want lower INSURANCE premiums? • 85% Americans satisfied with plan • No one seems happy (source “The Office”) 1. How did we get here? 2. Can health insurance be more like auto insurance?

First … Identify the problem “As health care spending continues to rise, Americans are not receiving the commensurate benefit of living longer, healthier lives. Health care bills are too complex, choices are too restrained, and insurance premiums and out-of-pocket costs are climbing faster than wages and tax revenue. ” https: //www. hhs. gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition. pdf

How did we get here? ? ? 6

How Health Insurance Let’sdid take a trip back in become time to so hated? see what we can learn…

1800’s to 2010 (Pre - PPACA) 8

Pre-2010 Private Health Insurance mostly Private & Underwritten • Private health insurance may be purchased on a group basis (e. g. , by a firm to cover its employees) or purchased by individual consumers. • 60% of Americans are covered through an employer, while about 9% purchase health insurance directly • States regulate the content of health insurance policies

Pre-2010 Underwritten Health Insurance mostly Private & Underwritten Insurers use what is known as underwriting to manage the degrees of risk within their risk pools. Underwriting allows insurers to maintain stability and predictability for the individuals who contribute premiums to the pool. In the individual market, underwriting also allows the insurer to customize the premium level and terms of a policy based on an individual’s medical history. (https: //web. archive. org/web/20111223193910/http: //tahp. org/documents/THS/2008/FINAL_Health_Ins_in_Texas. pdf )

Pre-2010 What about the sick? … High-Risk Pools • High-Risk Pools at State Level • Guaranteed-issuance risk pools… individuals who are medically uninsurable …purchased a state-sponsored health insurance • Usually at higher cost • Plans varied greatly from state to state

rd 23 , March 2010 What Happened to State High. Risk Pools? With the Patient Protection and Affordable Care Act, all insurers are fully prohibited from discriminating against or charging higher rates for any individuals based on pre-existing medical conditions. Therefore, most of the state-based pools shut down.

High Risk Pools Pendulum Swing State Level (Pre 2014) • Not Systematized • Dramatic Variations • Poor Accessibility Exchanges (2014 – now) • Uniform System • Metallic Levels • Great Accessibility Improved Access for Uninsurable Americans

What Problem did PPACA Solve? Better and more uniform Accessibility

What did PPACA NOT Solve? Affordability What helps lower the cost of any Underwriting type of insurance? ? ?

Does PPACA Allow Underwritten Individual Health ? Private & Plans 364 Days or Underwritten Less (STLD) What does that make STLD Plans?

How do consumers leverage Term Med?

A Closer Look at the Development of New Underwritten “Term” Medical Plans Oct 2017 EO 13813 2014 ACA Starts June 2016 90 days 2020 Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P “Term” Med Grows July 2019 U. S. Dstrct Court ruled

Jan 2014 • • • Exchanges take on sick Americans from individual state high-risk pools Large number ofmany ”Grandfathered, ” underwritten, individual plans Section 2791(b)(5) of the PHS Act provides: “[t]he term“if‘individual healthplan insurance are renewed; you like your you cancoverage’ keep it” means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance. ” 2014 ACA Starts Jan 2019 Penalty $0 Oct 2017 EO 13813 Jun 2016 90 days Feb 2018 CMS 9924 -P 2020 “Term” Med Grows Jul 2019 U. S. Dstrct Court ruled

June 2016 changed the definition of short-term, limited-duration insurance that had been in place for nearly 20 years by revising the definition to specify that shortterm, limited-duration insurance could not provide coverage for 3 months or longer 2020 2014 Oct 2017 EO-13813 ACA Starts Jun 2016 90 days CMS-9924 -P 2/21/18 “Term” Med Grows Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P Jul 2019 U. S. Dstrct Court ruled

October 2017

Oct 2017: Executive Order 13813 • “To the Order extent 13813 permitted by law and supported. Choice by sound • Executive ; Promoting Healthcare and policy, the Secretaries should consider allowing such Competition Across the United States insurance to cover longer periods and be renewed by the consumer” 201 4 Oct 2017 EO -13813 ACA Starts Jun 2016 90 days 2020 Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P “Term” Med Grows Jul 2019 U. S. Dstrct Court ruled Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Presidential Documents 48385

Feb 2018: CMS-9924 -P is Response to 13813 In August 2018, the Departments of HHS, the Treasury, and Labor finalized a rule to expand Americans’ ability to purchase short-term, limited-duration insurance—coverage for which premiums are generally much more affordable than Affordable Care Act (ACA) plans. Millions of Americans, including middleclass families who cannot afford ACA plans, will benefit from the additional choice and competition resulting from this reform. https: //www. hhs. gov/about/news/2018/12/03/reforming-americashealthcare-system-through-choice-and-competition. html

Feb 2018: CMS-9924 -P Millions of Americans, including middle-class families who Americans benefit from increased insurance options at could obtain broader access compared to those • • Individuals Plans with 12 -month TERMS cannot afford ACA provider plans, willnetworks benefit from the additional choice lower premiums that have narrow and competition resulting from this reform 2014 Oct 2017 EO-13813 ACA Starts Jun 2016 90 days 2020 Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P “Term” Med Grows Jul 2019 U. S. Dstrct Court ruled Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Presidential Documents 48385

Jan 2019: Individual Tax Penalty of the Code is reduced to $0, ” as provided under • “ 5000 A $0 penalty to buy Term Medical plans Pub. L. 115 -97. 201 4 2020 Oct 2017 EO-13813 ACA Starts Jun 2016 90 days “Term” Med Grows Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P Jul 2019 U. S. Dstrct Court ruled Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Presidential Documents 48385

Term Med Pendulum Swing 2016 • Tax penalty • 3 months Underwritten Options 2019 • No Tax penalty • 364 days • Up to 36 mo.

Under the current rule, issued in late 2016 by the Obama administration, short-term insurance cannot last for more than three months, as it was meant to be a stopgap. Under the new rule, the limit would be 364 days, and insurers would be allowed, but not required, to extend policies. The maximum duration, including any extensions, would be 36 months. Unlock more free articles. Create an account or log in The new options will help people struggling to afford coverage under the 2010 law, said Alex M. Azar II, the secretary of health and human services. “These plans aren’t for everyone, ” he said, “but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system. ” The new rule is presented as a redefinition of “short-term, limited-duration insurance. ” But it stretches the common understanding of those terms, and some of the new policies could be an attractive option for healthier consumers who now pay high prices for major medical coverage and are willing to take more risk in return for lower prices. “Short-term is getting longer!” https: //www. nytimes. com/2018/08/01/us/politics/trump-short -term-health-insurance. html

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July 2019 U. S. District Court upheld STLDI 31

July 2019: U. S. District Court Judge Ruling • U. S. District Court Judge Richard J. Leon ruled in favor of CMS • Plaintiffs (representing health insurers, physicians, and Administration had not overstepped with the 2018 9924 -P consumer advocacy organizations) sued the Trump regulations that significantly expand short-term health administration, arguing new rules are contrary to HIPAA plans 201 4 Jan 2019 2020 Penalty $0 Oct 2017 EO-13813 ACA Starts Jun 2016 90 days Feb 2018 CMS 9924 -P “Term” Med Grows Jul 2019 U. S. Dstrct Court ruled Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Presidential Documents 48385

2020: ”Term Med” Grows in Popularity • • Pivot Health releases “Bridge to Medicare” 3 year Term National General & IHC release 1, 2, & 3 year plans United Healthcare launches 3 year “Tri-Term” plans in many states, modeled after pre-ACA plans with preventive and pre-ex coverage 201 4 Oct 2017 EO 13813 ACA Starts Jun 2016 90 days 2020 Jan 2019 Penalty $0 Feb 2018 CMS 9924 -P “Term” Med Grows Jul 2019 U. S. Dstrct Court ruled Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Presidential Documents 48385

Where is Major Medical Underwriting?

How Popular Will It Be?

Case Study – Kneeland Family Left corporate America to start own small business previously paying $1, 500/mo in premium Term Medical allows for $760/mo in savings $9, 120 Annual savings to repurpose into retirement Will take new agent’s advice for other lines due to the trust and savings Traditional Health Insurance $1500 Term Medical Monthly Cost $740 Monthly Savings $760

Who is a Good Fit? • Independent Business Owners • 1099 Workforce (Gig Economy) • Early Retirees (pre-Medicare) Term Medical grows in popularity

Disclosures 1. 2. 3. 4. 5. Pregnancy Preventative Care Pre-existing High Blood Pressure Tax Penalty Group Coverage Offered

America just took a DNA Test, Turns out… Obama & Trump together is 100% the best possible scenario

How to Help Clients Get Appointed Trusted Referral Source www. Agents. For. Hope. com justin@agentsforhope. com