Informed on Reform


Paul Cholak - Principal
Licensed Insurance Agent


December 2017 - In This Issue:

We Offer:
  • Individual and Family Health Insurance (Affordable Care Act)
  • Health Plans for Medicare Beneficiaries
  • Life Insurance
  • Pre-Need Funeral Arrangement Plans
  • Final Expense Insurance
  • Life Insurance for Diabetics and Other Hard-to-Insure Individuals
  • Annuities
  • Dental and Vision Care Coverage
  • Supplemental Health Insurance
  • Prescription-Only Drug Plans
  • International Travel Medical Insurance
  • Disability Insurance
  • Short-Term (Recovery) Care Insurance
  • Long-Term Care Insurance
  • Pre-paid Legal and Identity Theft Plans
About our Principal,  
Paul Cholak

Paul holds resident (Florida) and non-resident life, health and annuity licenses in 31 other states and is registered to sell individual and SHOP plans on the Federal Facilitated Marketplace.  He also has a Florida pre-need sales agent license,
In addition, he's also appointed to sell Prepaid Legal Expense and Identity Theft Plans.

He has many years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms.

Paul negotiated the first labor contracts that included the concept of "reasonable and customary" reimbursement and also implemented the first group dental insurance plan.  

He knows all aspects of individual and family health insurance and has extensive experience with group plans, as well.

He's available 24/7 and stays in touch with his customers before and after they've made their insurance purchase.  He's always available to help customers who have claims or other problems with their coverage or have any questions about their policies.

He's a recipient of the prestigious Albert Nelson Marquis Lifetime Achievement Award and been listed in Who's Who in America, Who's Who Registry of Business Leaders and Who's Who in Finance and Industry. Early in his career he was identified as one of the Emerging Leaders in America. 

He's a member of Phi Beta Kappa and other national honorary societies and organizations such as Omicron Delta Kappa. He's also an Ambassador with the Boca Raton Chamber of Commerce. He's a graduate of certificate programs from a number of prestigious institutions, been invited to speak at corporate and university training programs, been featured in articles in national books and magazines, and is also a published author.   

ACA Benchmark Premiums Up 37%:  Effect On 2018 Plan Choices
The Department of Health and Human Services has reported that the average monthly premium for benchmark Obamacare insurance plans has increased about 37% nationally for 2018.  This is in line with average premium increases for the State of Florida.

While premiums have risen sharply, tax credits for highly subsidized individuals (particularly those at or below 200% of what is called the Federal Poverty level) have also increased sharply.  The result is that net premiums have actually decreased for some of these individuals, while others in this income range are experiencing only modest increases, particularly if they purchase HMO plans.

On-exchange plans have been designed so that the cost incentive is for clients to purchase HMO plans or if they want a PPO, plans that utilize Florida Blue's Blue Select network.  

Florida Blue (the only carrier offering PPO plans on the exchange in Florida) is still making their Blue Options and Blue Select PPO plans available both on and off the exchange, but Blue Options plans (PPO plans that use the large PPO network)--even for highly subsidized individuals--have increased significantly in premium.  We expect few individuals buying on-exchange plans to buy plans that use the Blue Options network.  The exception is individuals with significant health conditions who feel they need to stay with their present doctor(s), who in many cases accept only the Florida Blue Blue Options plans.  If they can afford it, these individuals are choosing Blue Options plans but sometimes with higher deductibles than they would have purchased previously.

Non-subsidized individuals have seen significant premium increases.  The result is that many individuals are switching to lower-priced plans (particularly to bronze level plans) with smaller networks and/or increasing deductibles to counteract the effect of large premium increases.  As an example, individuals who purchased HSA plans last year with deductibles like $3,600 are purchasing similar plans with a $6,000 deductible for 2018.  Using this approach, individuals have been able to keep premiums in line with what they paid in 2017.

This article, published in Health News on October 30, contains an excellent analysis of premium increases and their effect on plan choices for 2018.  The article also states that 51% of U.S. counties have only one insurer selling Obamacare plans in 2018 
Short-Term Plans:  An Alternative To High ACA Premiums?
Short-term health insurance plans were originally introduced to cover individuals who needed coverage for only short periods of time:  to provide coverage between jobs, to provide coverage for those about to retire, and for other short-term requirements. 

Until April of this year many carriers offered plans for up to 11 or 12 months and some offered buyers the opportunity to renew their policies if they could successfully answer health questions.  Almost all short-term carriers require limited underwriting (i.e. the carriers ask health questions and the policy is offered only if the individual can answer the health questions to the carrier's satisfaction) although several carriers make short term policies available on a guaranteed issue basis.  However, ALL short-term policies exclude pre-existing conditions.

As of April 2017 regulations were changed so that short-term policies could only be offered for up to three months.  However, a number of carriers began to offer creative solutions where 3-month policies could be bundled so that up to four policies could be offered with the initial purchase (thus offering coverage for up to 12 months) and with health questions required only when buying the first three-month policy.

The tax penalty for not having an ACA qualified plan (short-term policies are not ACA qualified) is the greater of 2 ½% (adjusted for inflation since 2016) of household income or $695 per adult and $295 per child.(two maximum).  Short-term policies are significantly less expensive than ACA policies and some individuals are finding it cost effective to purchase short-term policies and pay the penalty for not having an ACA-qualified plan.  It's important to note, however , that this solution should only be considered by healthy individuals.  First, these policies do not cover all the essential health benefits mandated by the ACA.  Secondly, deductibles do not carry over between each successive 3-month policy:  deductible requirements start over with each new  3-month policy.

President Trump issued instructions for Federal agencies to study how longer-period short term policies could be re-introduced, and we expect changes and regulations to be implemented sometime in early 2018.  However, since we have no idea of what might eventually be permitted, we are advising our clients that they shouldn't make decisions on the expectation that changes will be made: we tell our clients to make the analysis based on current short-term policy offerings.
Is CVS Going To Buy Aetna?
In what could be the largest merger ever completed in the U.S. healthcare industry, CVS has reportedly offered to acquire Aetna for $66 Billion. Since reports of the proposed merger emerged in late October, neither company has publicly commented, and there's been no recent press coverage regarding the possible merger.

The Wall Street Journal reported CVS's market value at $75 Billion, while Aetna's is close to $60 Billion.

If finalized, the deal would combine the nation's third-largest health insurer with CVS's extensive network of drugstores and clinics in addition to its sizable pharmacy benefit management (PBM) business, which includes a Medicare Part D plan (Silverscript) for Medicare-eligible individuals.

The PBM business is very profitable and was one of the most important reasons Aetna tried to purchase Humana.

This article provides an excellent analysis regarding why a CVS-Aetna merger makes sense. 
Paul Cholak