Blue Cross Blue Shield of Nebraska has launched a new health insurance option for individuals and families in the state.
The insurer is billing the plan, called Armor Health, as a more affordable option aimed especially at healthy people younger than 65 who might not qualify for a subsidy to help cover the cost of coverage on the federal Affordable Care Act marketplace, also known as Obamacare. It’s also an option for small-business owners seeking coverage for four employees or fewer, according to Blue Cross.
Armor Health is what’s known as a short-term plan, and it will join other short-duration plans available in the state. Nebraska Insurance Director Bruce Ramge said his department has approved 17 such plans for sale in Nebraska in 2020.
Unlike plans offered under the ACA, insurers can reject applicants or charge higher premiums based on their health conditions under short-term plans. And the plans don’t have to cover all of the benefits required of a plan on the exchange. Maternity care, for instance, often is not covered by short-term plans.
Because of those limitations, short-term plans have been the subject of some debate since the Trump administration last year issued a rule allowing such plans to run for up to a year and be renewable for three years. Previously, they’d been limited to shorter terms and were seen as offering a bridge for coverage gaps. Critics have warned that such plans, when used long term, could leave patients with high medical bills if they need care that isn’t covered.
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Blue Cross officials say their new plan resembles the individual policies available before the ACA and is designed to provide an affordable option with quality coverage for a segment of the population that’s currently underserved.
“Individual policies in Nebraska are far too expensive, especially for those who utilize little to moderate care,” Dale Mackel, Blue Cross executive vice president, said in a statement. “This population needs a more affordable choice.”
According to an analysis by the nonpartisan Kaiser Family Foundation, Nebraska had the nation’s second-highest average individual benchmark premium — $838 a month — in 2019. For 2020, it’s down to $711 a month and ranks fourth-highest.
Indeed, Minnesota-based Medica has posted an average rate decrease of nearly 7% for three individual ACA plans available in Nebraska for 2020. Bright Health, also based in Minnesota, also has entered Nebraska’s market and is offering competitive rates for 2020.
That’s a change from previous years. Nebraska and Iowa residents saw single-digit increases or slightly lower rates this year. But that followed several years of double-digit increases.
Chuck Olson, chief executive of the Omaha insurance brokerage OCi Insurance and Financial Services, said his firm has been offering short-term plans to people who can’t afford ACA-compliant plans and who face the choice of going without insurance.
That may apply to people who earn just above the income guidelines that would qualify them for a federal subsidy and those who are self-employed.
If people know what they need covered, short-term plans can be a good option that allow people to choose the benefits they want and not pay for benefits they don’t want, he said. Not everyone needs maternity coverage, for instance. And the cost can be up to 30% less than for an ACA-compliant plan.
“We see too many people go without coverage because they can’t afford $900 a month for themselves,” Olson said.
Blue Cross officials said Armor Health does not cover maternity services. But it does provide benefits for a number of services not usually covered by short-term plans, including prescription drugs and outpatient treatment for mental health and substance abuse. Preexisting conditions are included once a waiting period has been satisfied. Routine preventive services follow ACA guidelines and are free of charge.
“We expect Armor Health to be a popular choice and are already seeing significant interest in the new plan,” Mackel said in his statement.
Roughly 88,000 Nebraskans purchase health insurance on the federal marketplace each year. Most — upward of 90% — receive subsidies, according to the Nebraska Department of Insurance.
Another alternative plan, a Nebraska Farm Bureau option launched as what’s known as an association plan, has switched to a short-term plan for 2020 because of a federal court challenge.
To make sure consumers and insurance agents can compare their benefits with those of other plans on the market, the state insurance department has issued guidance for consumers and for companies writing the plans.
Coverage under Armor Health begins Jan. 1, 2020, but purchasers can enroll at any time of the year. Unlike the ACA, there is no specific open enrollment period. Coverage continues for 12 months.
Open enrollment under the ACA continues through Dec. 15 at healthcare.gov
As always, consumers need to make sure they know what they’re buying. Ramge encouraged consumers to work with their local insurance agent to select the best plan for their needs. Consumers also should exercise caution if they receive unsolicited phone calls or other communications about health insurance products.
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