CMS: STM Limited to 3 Months - No Renewal Allowed

[bluemarlin08]

Those are very good reasons not to buy it. You could list them as:
* Pre-Existing Conditions Exclusions - a huge issue
* No Normal Maternity coverage, but complications are covered - a very large issue
* No substance abuse treatment - not that important for a lot of folks
* No Preventive Care at 100% - not a big deal, considering the premium difference.
* Possibly other exclusions - could be a big deal
* Penalty - a big deal only if the person is not exempt, or if the premium + penalty approaches the cost of an ACA plan.

The Pre-Ex condition exclusion is a huge deal. Embedded in that issue are sub-issues, like:
* Underwriting at claim time - Most of the policies underwrite and seek medical records when a claim is issued
* Pre-ex definition - They can construe pre-ex to mean anything even remotely related to a prior condition. For instance, if you have HBP, then a stroke is pre-ex. If you had a complicated pregnancy before, a new pregnancy's complications might be construed as pre-ex. If the child had an ear infections, anything to do with that ear might be pre-ex. Of course, this depends on the policy, the pre-ex definition, and the carrier's reputation.

Now for the positive issues:
* Cost difference! - Huge issue. In Bluemarlin08's case, the ACA premium costs $1200 more monthly ($14,400) more annually, and the deductible is $3400 less. You can pay for a lot of your own maternity expenses, substance abuse, and certain Preventive Care with that kind of savings.
* More deductible & OOP choices - Could be a big issue, or a minor one. You are not limited to metal-tier, nor deductibles/OOP of $7,130 or less, which can be important for people wanting catastrophic coverage.
* PPO networks - A big issue
* Might be exempt from the penalty, or the premium difference might be worth it. - A big issue

So, it comes down to this:
1. Does it cost less? (Must include the penalty if not exempt)
2. Is the savings worth the extra benefits (lower deductible, PPO, etc.)?
3. Is the savings worth the extra benefits, plus the extra risk?
4. Do you have ANY pre-ex conditions?

As for the penalty, in BlueMarlin08's case, the household income would have to be $576,000 before they hit a penalty of $14,400. Even then, they might already hit the penalty cap of "the premium for the Lowest Cost MEC plan available to this family". For an average non-subsidized family, making, let's say $120,000, they will probably fit the unaffordable exemption in BlueMarlin's case. For a family making $250,000, the penalty would be $6250. That means their net savings would be $8,150 to take an STM and pay the penalty.

I can see lots of reasons why STM would be the choice of many folks. It's a better choice than uninsured, that's for sure. For an agent, the biggest issues are whether or not they have any pre-ex, and whether or not they fully understand what they are doing and the risks they are taking, and whether or not the client is the one that made this decision.

Thanks for both of your response. Do you see the pre ex different with STM than pre aca plans? As long as client understands he must fully disclose. Using the blood pressure issue, I spoke with an underwriter with one company and they told me that blood pressure under control with meds for 2 years that it would not be a reason to deny a claim for a heart attack. Could an agent have a form detailing the differences and have the client sign?

 

[Ann H]

Pre-ACA, we had pre-ex clauses, riders, rate-ups, and declinations.

Some pre-ex exclusions were broad and some were narrower. The broad ones had look-back periods that were longer, and occassionaly were "ever". Their definition of a pre-ex condition might have used the "prudent man" rule, or even "manifested symptoms of" rule instead of, "had advice, treatment, or drugs for" rule.

But we could get a narrower exclusion in the 5 years or so before ACA. We could usually get a pre-ex clause that looked back 6-12 months, and used a definition of pre-x with the "had advice, treatment or drugs for" rule. And, sometimes we could get a waiver of the exclusion if the condition was "fully disclosed on the app", or perhaps a HIPAA style credit for prior coverage.

Even pre-ACA, the STM policies did not have pre-ex clauses anywhere near as good as a long-term underwritten IFP policy.

So, STM's pre-ex clause is not quite as good as pre-ACA policies used to be. However, I was just reading an STM policy the other day, and its definition of a pre-ex condition didn't even say "drugs", it said, "prescribed medications". Big difference. OTC heartburn medication is a drug. So is OTC Aspirin for controlling blood thickness.

I don't expect any carrier to use HIPAA-style credit for prior coverage, because all these people are coming off ACA. However, it's possible that we would see a "fully disclosed at underwriting time" clause. That would be very good.

As for the carrier that claimed they would not deny a claim if HBP was controlled with Rx for 2 years, I would have to see that in writing. STM plans are notorious for denying first, then you have to fight. They are also known for underwriting at claim time, which means there are few questions on the app, but when you file a claim, they start asking questions and ordering medical records.

One of my problems with STM apps are the ambiguous questions on the app. They ask if you've ever had heart conditions. Or perhaps they say, "cardiac". Is HBP a heart or cardiac condition? How about high cholesterol? If you experienced a heart attack after being on the policy, will they say it was caused by HBP or high cholesterol? My experience is that they would. If they won't, I want to know that, and see something in writing that gives clarification.

 

[bluemarlin08]

Thank you so much. So, how would you proceed when asked if there are other options? Do you explain all the potential problems, warn them carefully about any pre existing conditions? So, if you show them this option, and suppose one family member has pre ex, would show the other members STM? For many of my clients the big increases will push them to not cover, which I think is a horrible scenario. If my wife were like a friend that just called, current premium1500 going to 2400, I couldn't do it. She was crying wondering what they will do . The pre ex issue is much more severe the older one gets. Thanks for your wisdom and taking the time to answer. Just bewildered what many of my friends are going to do.

 

[yankee466]

Healthy Christians will get share plans....no penalty

Self employed and healthy will buy a $50 MEC plan plus a STM plan for 11 months....no penalty

Poor people will vote for Hillary and keep the subsidies coming.

Hard working middle class with pre-ex will be screwed with high premiums.

That's it for options.......unless Indian/Eskimo/incarcerated/Medicare/Group plan/Costa Rica.

 

[TN_agent]

We have a LOT of people who are desperately trying to get group insurance qualified.

Self employed incorporating, etc.

 

[Ann H]

Healthy Christians will get share plans....no penalty

Self employed and healthy will buy a $50 MEC plan plus a STM plan for 11 months....no penalty

Poor people will vote for Hillary and keep the subsidies coming.

Hard working middle class with pre-ex will be screwed with high premiums.

That's it for options.......unless Indian/Eskimo/incarcerated/Medicare/Group plan/Costa Rica.

Good quick summary! About the $50 MEC plan, do you mean a skinny MEC that a large employer with 50+ employees can offer? I don't know of any IFP plan or Small Group plan that can have benefits skinner than Bronze, but please let me know if I am wrong.

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We have a LOT of people who are desperately trying to get group insurance qualified.

Self employed incorporating, etc.

Group insurance is, by far, the best option. Lower rates, broad network PPO, etc. Not all people can qualify, but it's the best option, for sure.

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Thank you so much. So, how would you proceed when asked if there are other options? Do you explain all the potential problems, warn them carefully about any pre existing conditions? So, if you show them this option, and suppose one family member has pre ex, would show the other members STM? For many of my clients the big increases will push them to not cover, which I think is a horrible scenario. If my wife were like a friend that just called, current premium1500 going to 2400, I couldn't do it. She was crying wondering what they will do . The pre ex issue is much more severe the older one gets. Thanks for your wisdom and taking the time to answer. Just bewildered what many of my friends are going to do.

Hard questions to answer. We are put in a tough position, because clients are put in tough positions.

You asked "Do you explain all the potential problems, warn them carefully about any pre-existing conditions?" Yes. No matter which path ends up being the path of choice, the client should know the risks as well as the benefits.

You asked "So, how would you proceed when asked if there are other options?" I'm still working through that process myself, but my idea is to have a prepared sheet (newsletter, Word doc, website page, or something like that), which is like a workflow chart. Something like this:

1 - what is your current plan and current premium?
2 - what is the most equivalent ACA choice for 2017?
3 - what are your ACA options for lower (or higher) premium?

If they accept the ACA options, go there. Of course, that will be subsidized people mostly. You might ask if they qualify for group insurance, because that's really the only good alternative. The other alternatives are just to save them from going uninsured. I wouldn't bring up the other options if they accept the ACA plan and premium. Well, except group insurance, of course.

4 - Oh, so you want options, or you are saying, "I will just go without insurance?" Then let's proceed.
5 - Group Insurance. The only true long-term insurance option out of the other options to come.

Proceed with seeing if they qualify in any way for a group plan. If they can get group insurance, go that route. If not, explain that the remaining options are much worse.

6 - STM - the good news is that it costs less, is a PPO, etc., and the bad news is that it does not cover pre-ex, only lasts x number of months (and could be just 3 months if HHS hammers down), doesn't cover maternity, etc., possible tax penalty...
7 - Sharing Ministry - good news is it costs less, no tax penalty, bad news is no pre-ex covered, not real insurance, lots of providers don't accept it as proof of payment, etc.
8 - CI/FI/Accident - really bad choice as a stand-alone, but might be okay to buy to supplement another, broader policy.
9 - Uninsured & tax penalty.
10 - Life insurance to cover the cost of your funeral. (Just being obnoxiously cynical here, guys.)

In no case would I stress an option with less coverage than Group or ACA.

Before they take the app, they would have to sign a statement saying they were fully informed of the risks and limitations, and they received the complete brochure & outline of coverage which lays out the exclusions, limitations, etc.
​

That would be my general work flow. I think. I'm still processing through this myself.

Each step is a long conversation, so I would just stop at the first option that the client will accept, because the options get worse as you go down the list.

In my case (here in Phoenix), it is a little worse than in most states. Our only ACA option is Cigna, using their clinic doctors as PCP and some referrals. They have 4500 ACA members now, and will have a huge influx. The population losing their ACA IFP plans 12/31/2016 are 127,000 on exchange and about 120,000 off exchange. That is not "insurance" for a lot of folks, when you can't get in to see a doctor. So, there is that conflict between "Cigna covers pre-ex, but you can't see a doctor", vs "STM has a broad PPO network, but doesn't cover pre-ex"!!!!

 

[rcduggan]

Healthy Christians will get share plans....no penalty

Self employed and healthy will buy a $50 MEC plan plus a STM plan for 11 months....no penalty

Poor people will vote for Hillary and keep the subsidies coming.

Hard working middle class with pre-ex will be screwed with high premiums.

That's it for options.......unless Indian/Eskimo/incarcerated/Medicare/Group plan/Costa Rica.

can you explain more about this $50 MEC plan? i understand minimum essential coverage but who is providing such an animal?

 

[yankee466]

can you explain more about this $50 MEC plan? i understand minimum essential coverage but who is providing such an animal?

There are several carriers out there, who BTW are smartly teaming up with some of the STM carriers (like NHIC), who have come up with an offering for either a single person who is self employed (and will swear to it), or you can join an association that offers MEC plans to its individual members.....so you don't have to attest to anything. Rates fluctuate,but the MEC plan can be anything from basic preventative maintenance for $0, all the way to some office visit copays and PPO repricing...with no pre-ex of course. Adding one of these plans to STM or something like US Health Advisors can be a winner price-wise for some people.

For $50/head you also can join a larger share CHS plan, if healthy, and then still get the STM or USH type plan to make sure you avoid penalties but still get PPO and no funny looks when you profess your belief in God to the doctor.

You can PM me to discuss if you like. I expect this will be an interesting offering next year for some healthy clients. If I just did not have heart surgery last year, I would sure look at it....but I am in the middle class screwed category.

 

[Ann H]

There are several carriers out there, who BTW are smartly teaming up with some of the STM carriers (like NHIC), who have come up with an offering for either a single person who is self employed (and will swear to it), or you can join an association that offers MEC plans to its individual members.....so you don't have to attest to anything. Rates fluctuate,but the MEC plan can be anything from basic preventative maintenance for $0, all the way to some office visit copays and PPO repricing...with no pre-ex of course. Adding one of these plans to STM or something like US Health Advisors can be a winner price-wise for some people.

For $50/head you also can join a larger share CHS plan, if healthy, and then still get the STM or USH type plan to make sure you avoid penalties but still get PPO and no funny looks when you profess your belief in God to the doctor.

You can PM me to discuss if you like. I expect this will be an interesting offering next year for some healthy clients. If I just did not have heart surgery last year, I would sure look at it....but I am in the middle class screwed category.

Yikes! That sounds risky, and not something that I'm willing to do. I would sell the STM to someone who was going uninsured otherwise. Then, if they went out and got one of those MEC plans that you described, in order to avoid the tax penalty, that's their own business. But I can't see selling it, nor including it in part of an overall plan. If a person is not exempt from the penalty, they might think $50/month ($600 a year) is worth it to avoid the penalty. But it's not like the coverage is worth much!

By the way, avoid saying "USHealth" on this forum, unless you want a fight. I'm not sure if you just happened to say that, as an example, or if you are planning to sell it... I haven't heard anything good about it yet. Even if it was just an example, most agents aren't interested in any example that might manipulate around the law, but not necessarily offer the client the finest coverage that the client can afford.

 

[bluemarlin08]

The last couple of days I went to several websites trying to get additional stm rates and of course was bombarded with agent calls. I talked with 4 us health agents and never, ever talked with a dumber lying agents in my life. I know their plans pretty well and they couldn't explain and totally lied about competitive products. Really unreal.