2016 Open Enrollment

You’ve been hearing heart-wrenching Insurance ads on the media for weeks now. Ads that try to persuade you that health insurance equals love and it’s really important. Some questions came to your head….TREK has your answers! We will navigate through the switchbacks of open enrollment with no detours or hi

What is Open Enrollment? Let’s go back to 2010, when the government rolled out the Affordable Care Act (ACA). Among other things, the law requires everyone to enroll in a health insurance plan, or pay a hefty penalty. In 2016 the fines are as what follows:

$695 per person ($347.50 child or 2.5% of your annual gross household income, whichever amount is higher.

The legislation was written to cover people who were, going uninsured throughout the year – At least that was their goal.  Choke on a chicken wing while watching football on Sunday can hit your pocketbook of around $1,500 on the low end.

The US healthcare system is a bit complex, but simple to understand when applying some underlining principles of the “law of numbers.” How does this mysterious “open enrollment” fit into the U.S. healthcare system under the ACA? Imagine a world where anyone could enroll for a health insurance plan any time they wanted. When do you see people applying? When they need health care right at that moment, right? When they become ill or injured, when they’re expecting or have a scheduled surgery. Now think about what happens when your pregnant neighbor and your aging uncle Doug and your second cousin with Crohn’s Disease all flock to the doctor. The people insured reach into their pockets and pay out $30,000 for neighbor’s delivery and $16,000 for Uncle Doug’s hip replacement. The people that are not insured then reach back into their pockets and pull out nothing. The amount of money going into the insurance companies (monthly premiums) is not enough to counteract the money the insurers are paying out for much-needed care. The people insured eventually run dry… this is the delicate balance of the US healthcare system. Not saying the insurance companies don’t make a profit. Some do, some don’t.

Open enrollment facilitates the balancing act between people insured vs. the uninsured. It designates a period of time from November 1, 2015 – January 31, 2016 when anyone 64-years-old or younger, sick or healthy, employed or unemployed, likely-to-choke-on-a-chicken-wing can either enroll in a shiny new insurance plan or switch from their current plan to one that might better fit their needs/wants. Open enrollment gives all US residents an opportunity to (a) enroll in a plan to avoid getting hit by penalties for lack of insurance and (b) aggregate their money as a US healthcare community so, if and when people get sick, insurers don’t dig into their cookie jars and come up dry on that rainy day of sickness.

Let’s check out point (b) in a little more detail by returning to Uncle Doug, the pregnant neighbor, and the second-cousin-with-Crohn’s-Disease. Now, after open enrollment, we can factor Joe, the fit marathoner from down the street and Tina, the MD/PhD with bad eyesight, into the pool of premium-paying Americans. When pregnant neighbor and Uncle Doug and second-cousin-with-Crohn’s-Disease flock to the doc, the premium to payout ratio is balanced, and everyone can get the care they need.

But hold on! Doesn’t this mean that healthy Joe and Tina are paying for other people’s healthcare, right? Well, for the time being, yes. BUT, what happens when Joe’s 64-year-old ACL tears during a run on some mountainous terrain, or when Tina realizes that she’s been getting patients mixed up because her glasses prescription hasn’t been updated in years? By now pregnant neighbor is no longer pregnant, and she is no longer incurring medical costs for ultrasounds and post-delivery follow up appointments. So she is now “paying for” Joe’s surgery and Tina’s medical services.

I think of premium payments as an investment in your health, and of open enrollment as a designated period of time for you to make that investment. From November 1, 2015 – January 31, 2016, you can lick the wing sauce off your fingers.

Have questions? Not insured today? Hate your plan you are on now? Contact me!

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