Phil Castell
Castell Insurance
426 E. Washington St., Sequim, WA 98382
Phone: 360-683-9284 • Fax: 360-683-9026
Phil@CastellInsurance.com
www.CastellInsurance.com  

 

This week's article will be regarding major medical insurance for those folk who are not yet eligible for Medicare. This is an area which is in the forefront of people's minds as they start to learn all that the new health bills will entail.

As I have written before, the president's new health insurance bill will have minimal effect on Medicare coverage, but is directed at providing coverage for the many millions of people who currently do not have coverage.

During the past two weeks we have had the representatives from both Regence Blue Shield and Premera Blue Cross in our office to explain the upcoming changes in their plans.

We discussed the options for both individuals as well as group insurance through employers. For the most part coverage for groups will be modified only slightly. The biggest change will affect those small groups that purchase individual plans for employees rather than a group plan.

For example, a small employer may offer individual coverage as it allows both the employer and employee far greater flexibility in choosing a plan. If one employee is young and in great health, he may choose a catastrophic plan with high deductibles, whereas an older employee with greater needs may choose a more comprehensive plan.

Under the new rules an employer may be penalized if he does not offer group coverage.

Regence has added a question on the application regarding this situation and will deny an individual application for coverage if a person's employer is going to pay a portion of the premiums.

One way to get around this currently is for the employer to give employees an increase in wages and encourage them to purchase the insurance themselves. However, this loophole soon will be closed also.

The biggest news to come from our meetings is concerning Regence Blue Shield. They have two items of news and both are pretty substantial.

They are planning a rate increase that will average more than 15 percent for all individual policyholders. This was to be effective on Sept. 1, but they announced last week that the increase will be delayed to Oct. 1, as it was still under review by the Office of Insurance Commissioner.

Nobody likes rate increases of this magnitude and when it happens we get plenty of phone calls. The only things as agents we can do to mitigate the ever increasing premiums is to offer clients policies that have higher deductibles and fewer benefits.

The other news from Regence is even more earth shattering.

Over the years Regence has sold a number of different plans, and to date, had allowed members to keep their old plans even when new ones became available. This is generally known as a "grandfather" provision.

Regence has decided to discontinue all grandfathered plans effective Jan. 1, 2011. They intend to notify all affected members in the next month or so. They will move the clients to a comparable plan of the currently sold product line.

Not only will this be highly confusing for all clients, but many clients who were on older more comprehensive plans than are available today will be faced with a policy that is inferior to their current coverage.

We do have the chart in our office showing where the old plans will be moved to under this upcoming change. If anyone would like a free copy, let us know and we will be happy to give you one.

The changeover of plans originally was scheduled for Nov. 1 but due to the complexity of the moves, Regence has postponed it two months until Jan. 1, 2011.

So whereas in previous years we have just been inundated with the Medicare Open Enrollment for health and drug plans this year we will have the whole Regence situation on top of that.

The good news is that I know I can't get appendicitis again, as I had that removed last New Year's Eve.



Phil Castell is an independent insurance agent in Sequim. He can be reached at 683-9284 or PhilCastell@msn.com.