15 Nov 2013

Health Insurance Strategy Guide for CA Individuals and Families

15 Nov 2013

Please see our updated strategy guide for 2015.


UPDATE 11/22/13:  The options are becoming more clear, as Covered California yesterday rejected the President’s proposal to allow individuals and families to keep their plans for an additional year. And Cigna released 2014 rates, which were disappointing. Our strategy guide below has been updated to reflect these recent developments.


With six weeks to go until January 1, and several major holidays in between, shopping for health insurance is hardly at the top of everyone’s list. But the new rules and regulations under the Affordable Care Act, individual plan cancellations, new Covered California plans – all further complicated by President Obama’s Thursday proclamation – require exactly that.

We continue to talk with clients daily, working on the best strategy for each individual and family. Here is our guide to the best strategies and guidance we have developed, with the best available information we have.  See which category you fall into, and contact us with questions about your specific situation.

1. Will you qualify for a tax credit/premium subsidy in 2014?  If yes, your next steps are clear, and the time to act is now after the November 22-25 weekend site upgrade is complete.  Sign up for an account at Covered CA, and please be sure to follow these instructions to assign Allpointe as your agent. Now your choice is narrowed to: which insurance company (Kaiser, Anthem, Blue Shield, Health Net, or one of 8 regional carriers that may be available depending on where you live) and what metallic level (Bronze, Silver, Gold or Platinum).

2. Can you get below the threshold to qualify for a tax credit?  We have talked a number of individuals and families that are on the cusp of qualifying based on projected 2014 Modified Adjusted Gross Income (MAGI). Talk to your accountant or tax adviser about whether you are eligible to make contributions to a Traditional IRA or Health Savings Account (HSA) in 2014, and if that could reduce your MAGI to get under the threshold for a health premium tax credit. In some extreme examples, a family with members in their 50’s or 60’s, making a contribution of a couple thousand dollars into an IRA could qualify themselves for ten to fifteen thousand dollars in premium tax credits.

NOTE: We have embedded the Kaiser Family Foundation’s tax credit calculator (with their permission) on our site, here.  You can also view what factors into your Modified Adjusted Gross Income (MAGI) here, from UC Berkeley.

3. Is your individual plan grandfathered?  For almost all of those who purchased their plans prior to March of 2010,  you will be able to keep that plan indefinitely if you choose.  The carrier will continue to adjust (raise) rates based on your age and the overall cost of insuring their pool of subscribers. However, do keep in mind that your plan may provide lesser benefits than new plans in 2014. And if you qualify for premium tax credits, see #1, above.

4. Will you earn too much in 2014 to get under the threshold for a premium tax credit? If you and your family are healthy, and you have been enrolled in a high-deductible plan already, you are likely the hardest hit under the Affordable Care Act. We have seen rate increases of 70%+ for some individuals and families.  If you fall into this category, we encourage you to look closely at switching to a Cigna PPO plan prior to the end of 2013.  If your family might not qualify medically for the best rates prior to the end of 2013, start with the…

Secondary strategy: See what Cigna’s 2014 plans and rates look like, as soon as they are released, which we expect today, after a 2-week delay. Cigna released their 2014 rates, and they are on par, or more expensive than most other carriers.

Tertiary strategy: If you have Anthem or Blue Shield, consider accepting the option to continue your coverage for an additional two (Anthem) or three months (Blue Shield) into 2014.

Quaternary strategy: Wait and see. There is a possibility that the California carriers will wind up allowing you to keep your plan through 2014. Note that if you decide to drop your current plan, and it is later announced that you can keep your current plan, we believe the carriers will be required to let you re-enroll. Keeping your current plan through next year will not be an option (except for those who switch to Cigna before the end of 2013).

All individuals and families should pay close attention to the 2014 carrier networks – Anthem, Blue Shield, and Cigna will all be offering smaller PPO/EPO networks to 2014 plan subscribers. Kaiser and Health Net will not be changing their networks in 2014. Be sure to consult with your preferred doctors and other providers to be sure they will participate in the new networks.

As always, please contact us to discuss your family’s specific needs.


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