Changes are coming and they’re just around the corner. The major provisions of the Affordable Care Act (ACA) go into effect in 2014. All health insurance plans must be ACA-compliant at some point in 2014. This means big changes for many people. Whether you have employer-sponsored coverage or a personal plan (or no coverage at all), there are important things to know — and do — in preparation for the changes ahead.
In this post, I will focus on individual plans. All the carriers in Georgia have announced (or will announce shortly) what they plan to do with non-grandfathered health plans in 2014. Some carriers, such as CIGNA, are doing an “early renewal” for most policyholders. This means that they will receive a rate increase that will go into effect at the end of 2013. This rate increase will be modest — figure 1% per month since the last renewal date. The purpose of this early renewal is to delay the pain.
Since all carriers must transition non-grandfathered plans to ACA-compliant plans sometime in 2014, most carriers are using a strategy that pushes this change to the last possible day in 2014. So, for these folks, the big rate increase will occur at the end of 2014. However, this allows policyholders to switch to another plan for 2015 during open enrollment. Carriers will have adjusted by then and there will likely be some new affordable options for people. So, this is “buying some time” in a sense.
Blue Cross Blue Shield of Georgia just announced today that they will offer policyholders an optional early renewal. If this option isn’t taken, then they will just transition those policyholders to ACA-compliant plans at their renewal date in 2014. This may be okay for those who renew in the last couple of months of 2014, but the other folks probably won’t appreciate the steep rate hike.
It might be a good idea to switch to another personal plan prior to 2014 after finding out what your carrier plans to do about complying with ACA. This could result in tremendous premium savings.
Also, for those who don’t have any coverage at all, they could be much better off obtaining coverage prior to 2014 so they lock in lower rates for a year. Of course, some folks will be better off getting a plan through the exchange (online marketplace) if they qualify financially.
Every situation is different, so that is why it’s important to consult with an advisor who can help you prepare for the big changes coming soon.
Greg Sanders Peachtree Insurance Advisors 678-236-1600