What follows is TDA Financial Services Insurance Program’s annual update on health insurance for 2024. There has been a significant amount of new legislation passed and more changes ahead for individual and small group markets. Subsidies for the Affordable Care Act (ACA) individual plans have again been extended; and there are changes in the companies offering plans in Texas.
Market Changes: Individual HMO rates increase or slightly decrease. Small Group rates increase.
If you have individual or small group coverage, there are changes coming. Filed rates are being reviewed to determine if proposed increases are based on reasonable cost assumptions and solid evidence. Final rates won’t be available until Nov. 1 when open enrollment starts, so you can’t really start comparing until then.
There are more individual companies offering plans but most other than Blue Cross are only available in limited areas of the state, not statewide. PLEASE NOTE: Rate increases are not the same for everyone. What part of Texas you live in and your age also impact your overall rate.
Individual Plans
Blue Cross will again be the only company offering individual plans statewide in Texas, and they will again be HMO only. Blue Cross filed for a .6% decrease on their most popular HMO. The other individual plans offered in Texas—United Healthcare, Humana, Aetna, Community Health, Molina, and Friday Health Plan—filed for higher rate increases in the range of 9% to 19%, so keep an eye out for your renewal.
There are no ACA-compliant individual PPO plans in Texas (at the time of this writing in mid-August). There are regional or local plans available in Texas—mostly HMOs—and in limited areas of the state where a hospital system has several facilities and offers a plan.
There are other companies offering individual plans in a few select major metropolitan areas; such as Community Health, Molina, Oscar, and Scott & White; and a few hospital-specific plans.
Keep in mind the network being offered, as it could have limited or no coverage in parts of the state. Most of the plans incorporate tele-med, direct primary care, or concierge medicine as part of the coverage.
- Tele-med allows virtual visits with your physician that may or may not have a copay.
- Direct primary care and concierge arrangements typically provide certain services—such as an annual physical exam and specified treatment for a specific condition—and often don’t qualify as insurance, as you’re essentially pre-paying for a service.
- Virtual primary care sessions can include some prescriptions, durable medical equipment, lab tests, and diagnostic imaging.
Again, it’s very important to understand the scope of the networks, the coverage, and limitations—especially if you’re seeing specialists for an ongoing medical condition.
Don’t forget about subsidies or premium credits.
The ACA’s health insurance premium subsidies—also known as premium tax credits—normally adjust each year to keep pace with premiums. And people with lower incomes are expected to pay a smaller-than-normal percentage of their income for the benchmark plan—as low as $0 for people with income that doesn’t exceed 150% of the poverty level.
The eligibility range was capped at household incomes of 400% of the federal poverty level (FPL). But that changed for 2021 and 2022. Pending legislation would eliminate the income cap for subsidy eligibility through 2025.
Small Group Plans
Small group plans continue to be the only option for getting true PPO plan options under the ACA. The group market has become smaller with Humana announcing they are leaving the market.
Rate increases filed for small group plans range from less than 5% to as high as 17% depending on the company. For 2024, it appears small group:
- PPO rates will again be slightly lower than individual HMO rates.
- HMO group rates will be 5% to 15% lower than individual plans (non-subsidized).
Of the major companies, we anticipate Blue Cross will have the lowest rates (their filed rate increase for the PPO is 5.87% and HMO is around 1.31%) followed closely by United Healthcare and Aetna. Several group plans have a smaller network or are linked only to a specific hospital system (Memorial Herman in Houston and Baylor Scott & White).
Coverage Options
Small group plans are less expensive than individual plans and have more options.
If you have a practice with at least one other full or part-time employee, you should consider a small group plan. Depending on how your practice is structured, the other employee could be your spouse. Contact TDA Financial Services Insurance Program at (800) 677-8644 for details.
Why go through the additional paperwork and effort for a small group?
- Small group plans will be less expensive than the individual plans, and you can still get a PPO.
- If you sign up during the special enrollment for new small groups (starting Nov. 1), the mandatory employer contribution towards employee premiums (as well as other requirements) will be waived. This is a good way to attract and retain high-quality employees while offering a lot of flexibility on plan designs.
- If you payroll deduct the employee premiums, it saves the practice and employees on taxes.
- You can offer more than one plan within your group—a base plan that’s less expensive for employees (perhaps an HMO with an Rx and office copay) and a PPO plan for you and your family.
We can start comparing rates for small group plans beginning October.
Here are the maximum out-of-pocket amounts for coverage in 2024:
In-network
- $9,450 for an individual
- $18,900 for a family
High-deductible plans intended to be HSA-compatible are subject to these out-of-pocket maximums:
- $8,050 for individual coverage
- $16,100 for a family
Out-of-network
If you have out-of-network expenses, the maximum can be double what’s listed above or more; or out-of-network expenses might not even be covered. The plans with the lowest premiums will have the highest out-of-pocket expenses.
This is Important.
It’s critical you check the network of the insurance company you select for 2024 and make sure your providers and hospitals are in-network. You need to know the company name and the network name. Some providers, for instance, might take a Blue Cross PPO, but not Blue Cross HMO.
What other options do I have for health insurance in 2024?
Level-Funded plans
If your practice and its employees are generally healthy and not big users of health care, you might want to consider a level-funded plan. These are underwritten based on the health of the group and can be as much as 10% to 25% lower than regular ACA small group plans.
Keep in mind only 40% of groups will qualify based on underwriting, so this will not be a fit for all practices. Also, they typically don’t qualify for the special enrollment, so the practice must pay 50% of the employee premium and meet a participation requirement regarding the number of eligible employees that participate. Additionally, there are other considerations, such as the different PPO networks, stop loss coverage, and just understanding how the plans work and what’s covered.
Faith-Based, Medi-Share and Health-Share Groups
These types of plans are not insurance and should not be considered a substitute. With these types of arrangements, you join a group and pay or contribute a monthly amount to the plan. After your deductible is met, you submit your medical bills and are reimbursed from the funds available or through others making additional contributions to cover your bill. Many have incorporated a PPO network, so you can get the discounted amount when you have treatment. However, remember you’re still responsible for the bill even if the health-share plan might reimburse you.
These arrangements also have stricter guidelines than traditional insurance companies on which procedures are eligible for reimbursement or cost sharing. As well, there’s normally a lifestyle guideline where a member agrees to live a certain way (abstain from illegal drug consumption, sex outside of marriage, tobacco use, and abuse of alcohol or prescription drugs).
The payments of medical bills through these arrangements are not guaranteed in any way. Each member is always solely responsible for the payment of his or her own medical bills.
If you understand how the plans work and their limitations, these can be a less expensive option than ACA plans.
Short Term Medical
We don’t recommend you go without insurance; however short-term health insurance is an option if you’re without coverage because of a waiting period, you’re transitioning from one plan or coverage to another (e.g., in-between jobs), it’s outside the open enrollment period, or you’re close to being eligible for Medicare.
These plans are exempt from the definition of individual health insurance coverage under ACA provisions and usually don’t pay for pre-existing conditions. They’re designed to cover a new sickness or accident, with no treatment in the previous five years.
They also have limitations on coverage (e.g., no maternity coverage) and don’t have all the same mandates, such as unlimited-benefits maximums. Currently these plans are available for up to 12 months of coverage and may be renewed for up to 36 months. PLEASE NOTE: There is pending executive action to limit the coverage on these plans to 3 months.
Limited Benefit Sickness-and-Accident Plans
These plans are sometimes called “mini-med plans” and are marketed as an ACA alternative with a PPO.
They may offer copays and Rx benefits, however, they don’t include the “essential minimum health benefits” required by the ACA.
These types of plans may include a PPO and provide a schedule of benefits that pay a certain amount per day or treatment and are limited to a maximum amount. A company selling these plans will often address this limitation by selling additional coverage for critical or specified illnesses.
These are underwritten based on good health and have some form of pre-existing condition limitation, which means anything you’ve previously been treated for is not covered for a period—normally 12 months. If the plan is guaranteed issue with no pre-existing condition, make sure you’re not just buying a discount plan.
These plans can be an option, however you need to really understand the limitations and coverage, as you could be responsible for tens of thousands of dollars—even if you’re covered—if you have a major accident or illness.
Additional Options and Considerations
If you’re concerned about having a high deductible, limited, or no out-of-network coverage, you might consider a supplemental product for accidents or hospital confinements. These types of plans pay you directly and in addition to your other coverage. They tend to be relatively less expensive and are a good option if you don’t want to self-insure high-deductible and out-of-pocket expenses.
HSA Plans
When picking a plan, keep the above numbers in mind, but also consider the following. Prescription-drug and office-visit copays are convenient plan features, but you need to know the combined cost of your total out-of-pocket exposure and your plan (the premium).
If you haven’t looked at HSA plans or didn’t think they made sense previously, you should look at them.
- HSA plans offer the lowest premium and can be a great way to build up a self-funding account for current and future medical expenses. This can be especially important if you have to go out-of-network.
- Contributions are tax deductible (as much as $5,150 for an individual and $9,300 for a family).
- Earnings and interest accumulate tax-free.
- You own and control the funds.
- HSA plans are not a use-it or-lose-it vehicle.
ICHRA
Individual Coverage Health Reimbursement Arrangement (ICHRA) presents an opportunity for employers to take more control over their benefits spend. An ICHRA allows them to set aside tax-advantaged dollars to reimburse their employees for individual health insurance plans; and is inflation-resistant compared with group plan premiums. ICHRA brings more cost control and less risk for the employer and more purchasing power and choice for employees.
Keep in mind, however, that the individual health insurance plans offered are probably going to be HMO only; so no PPO. Additionally, the individual HMO plans are 10% to 15% higher than the group HMO plan, if unsubsidized. There’s also the ICHRA set up and additional administration for the practice, which isn’t particularly burdensome but should be taken into account.
HRA
Use of Health Reimbursement Accounts (HRAs) expanded because new regulations issued by the Departments of Labor, Treasury, and Health and Human Services, allow reimbursements for individual-market insurance premiums.
Before employers offer a benefit that includes individual HRAs, they should consider the implications related to the (ACA) employer shared-responsibility mandate and the ability of their employees to obtain a premium tax credit (PTC) or subsidy on the ACA marketplace. Because of this indexing methodology, the maximum new-contribution amount for an excepted benefit HRA remained $2,150 for the 2024 plan year.
2024 Landscape Review
If you want or need full coverage, the small group market is still the best way to get coverage with more options available at lower cost than in the individual market. However, with proposed legislation, this could definitely change in 2024—so keep your ears open!
The alternative options discussed all have a place at the table, but you need to make sure you understand plan limitations and risks before making a change to something less expensive. Stay informed and get ready to review and compare your options and decide as soon as possible. You’ll be able to review individual plans and rates beginning Nov. 1 and small group plans and rates in early October.
Important Dates
The open enrollment period for health plans offered under ACA begins Nov. 1, 2023, with the effective date of Jan. 1, 2024. For individual plans, you’ll have until Dec. 15 to pick or change to a new plan with a Jan. 1 effective date; or until Dec. 31, if your plan terminates Dec. 31.
If you would like to receive more information or discuss available insurance options, please feel free to contact TDA Financial Services Insurance Program at (800) 677-8644 or visit www.tdamemberinsure.com.
Please note: This article was submitted in mid-August, so some information may have changed by the time this article is published.