What is the Penalty for not Purchasing Health Insurance

For those on the fence, here are the penalties for not purchasing health insurance coverage

This is vital information for those who are on the fence about whether they should purchase coverage or not. Beginning in 2020, the California individual mandate required that all California residents maintain minimum essential health coverage (MEC) for each month of the year.

If you haven’t had health insurance for whatever reason, it’s important to understand the penalties for what happens down the line when filing taxes. While this is focusing on Californians, individuals in states across the country could be affected in similar ways.


People might wonder why the U.S. government emphasizes health insurance. In summary, there are two primary reasons to have health insurance:

• Health insurance supports you if you get sick
• Health insurance helps you avoid getting sick to begin with

Health Insurance Supports You if You Get Sick.

Most people can’t pay for all their health care out-of-pocket and opt to put it on a debit or credit card. But that’s just another financial burden that’ll have to be addressed at some point.

Health insurance provides financial protection in case you have a serious accident or illness.

For example, a broken leg can cost up to $7,500 — who has that amount of money just laying around to be used, and on a broken leg, at that? Chances are, if you’ve got $7,500 to put toward a broken leg, you’re better off paying for monthly health coverage, as it can help protect you from those high, unexpected costs.

Read more about the benefits of having health insurance coverage here and here.

Health Insurance Helps You Avoid Getting Sick to Begin With (the “I don’t need health insurance because I don’t get sick” Debate)

Does this sound familiar? Some of us have shared similar thoughts in the past, and this is especially the case with individuals who pay attention to their health, eat well, exercise on a regular basis, and simply don’t get sick often.

But forgoing health insurance coverage still isn’t recommended.

You might think that signing up for health insurance, paying a monthly premium, and not getting sick or receiving any health care is a loss of money. But it isn’t.

  • There are many health insurance benefits you can use even without getting sick, such as vaccinations and checkups, that help keep you healthy over the long run.
  • Even if you don’t get into an accident, have large health care costs, or need to use your health insurance benefits, you still get the peace of mind of knowing that, if you had gotten sick, you wouldn’t be facing all those medical costs on your own.

So, what happens if you don’t have health insurance coverage? Well, your taxes will be affected.


MEC includes employer sponsored insurance, individual market coverage purchased through Covered California or directly from issuers, Medicare Parts A and C, and most Medi-Cal coverage.

Those who do not meet this requirement must pay a penalty on their state income tax return unless they qualify for an exemption.

For 2021, the amount of the penalty for not having qualifying health insurance has increased. As a reminder, there are two methods of calculating the penalty, and a household will pay whichever calculation yields the larger penalty:

• A flat amount based on the number of people in the household – $800 per adult 18 years or older and $400 per dependent child for no coverage for an entire year; up to an annual max of $2,400.
• A percentage of the household income – 2.5% of all gross household income over the tax filing threshold.
• The California Franchise Tax Board (FTB) launched the individual mandate penalty estimator in 2020 to help consumers calculate the penalty they may owe if they go without qualifying health coverage.


Exemptions mean the fee for not having health insurance no longer applies. Here are the exemptions:

  • If you’re 30 or older and want a “Catastrophic” health plan, you must apply for a hardship exemption to qualify. See details about exemptions and catastrophic coverage.
  • If you live in Maryland, visit Maryland Health Connection for information on exemptions.
  • If you live in the District of Columbia, visit DC Health Link.
  • If you live in California, visit Covered California.

Let’s talk briefly about that final point geared toward Californians. According to the official CoveredCA.com website: “Covered California is a free service that connects Californians with brand-name health insurance … [providing] financial help when you buy health insurance from well-known companies.”

We encourage you to check out the website to learn more about your health coverage options.

And if you have more questions, reach out to us for more information; we’ll be happy to help. https://www.bdhealthinsurance.com/contact-bernardini-donovan-insurance/

Here’s what you need to qualify for the Earned Income Tax Credit

Learn what determines tax credits eligibility (and non-eligibility) to help pay for your health insurance

If you want guidance on how to pay for your health insurance, it might be helpful to know if you qualify for tax credit and what counts as income according to the Earned Income Tax Credit Eligibility (EITC).

Here are some quick facts about the earned income tax credit:

  • For the 2021 tax year (the tax return you’ll file in 2022), the earned income credit ranges from $1,502 to $6,728depending on your filing status and how many children you have.
  • You can use either your 2019 income or 2021 income to calculate your EITC — you might opt to use whichever number gets you the bigger EITC. (In general, the less you earn, the larger the credit.)Be sure to ask your tax preparer to run the numbers both ways.
  • You don’t have to have a child in order to claim the earned income credit.
  • The earned income tax credit doesn’t just cut the amount of tax you owe — the EITC could also score you a refund, and in some cases, a refund that’s more than what you actually paid in taxes.
  • If you claim the EITC, the IRS cannot issue your refund until mid-February by law.

Read more about this at Nerd Wallet.


Federal and state laws and regulations seem to change faster than you can keep up.

Low- to moderate-income workers with qualifying children may be eligible to claim the Earned Income Tax Credit (EITC) if certain qualifying rules apply to them.

According to the  IRS, you may qualify for the EITC even if you can’t claim children on your tax return. Learn more about how to claim the EITC without a qualifying child here.

Eligibility for tax credits is determined by several criteria, including the amount of income you make.

  • You must have at least $1 of earned income (pensions and unemployment don’t count).
  • Your investment income must be $10,000 or less.
  • For the 2021 tax year, you can qualify for the EITC if you’re separated but still married. To do so, you can’t file a joint tax return and your child must live with you for more than half the year. You also must have not lived with your spouse during the last six months or you must have a separation agreement or decree.
  • You must not have to file Form 2555, Foreign Earned Income; or Form 2555-EZ, Foreign Earned Income Exclusion.

There are also additional requirements such as age, foreign income, investment income, and dependents that you can read more about  here  on the Disability Benefits 101 (DB101) website. Below is a list of more common criteria:

  • You must meet adjusted gross income requirements.
  • You must have earned income from employment, self-employment, or employer-paid disability benefits received prior to retirement.
  • You must have a Social Security Number valid for employment.
  • You cannot file your taxes as “married filing separately.” If you’re married, you must file a joint tax return.
  • You must be a U.S. citizen or resident alien. If not, you must be married to a U.S. citizen or resident alien and filing a joint tax return.
  • You must live in the U.S. for more than half of the year.

Here’s what counts as earned income:

  • Federal taxable wages
  • Tips
  • Self-employment income
  • Unemployment compensation
  • Pandemic Unemployment Compensation ($300/week)
  • Social Security
  • Social Security Disability Income (SSDI)
  • Retirement or pension
  • Excluded (untaxed) foreign income
  • investment income
  • Alimony (only if divorce or separation finalized before Jan. 1, 2019)

Employer-paid disability payments received prior to retirement are considered earned income under the EITC program. But benefit payments received from a policy you paid the premiums for, or that you received post-retirement, would not be considered earned income.


  • Child support
  • Gifts
  • Supplemental Security Income (SSI)
  • Veteran disability payments
  • Worker’s compensation
  • Proceeds from loans (like student loans, home equity loans, or bank loans)
  • Child Tax Credit checks or deposits (from the IRS)
  • Stimulus payments (Economic Impact, American Rescue Plan, Golden State, etc.)

HealthCare.gov provides an extended list of qualifications (and non-qualifiers) to help you estimate what your household income is likely to be for the year.


If you fall within the guidelines for the credit, be sure to claim it on your return when you do your taxes  And if you didn’t claim the earned income credit when you filed your taxes in the last three years but you think you qualified for it, the IRS encourages you to let it know so you can get that money back.


Update on our workplace compliance partner, Mineral™ (formerly ThinkHR)

Mineral Blog

business health insuranceIn efforts to maximize our health insurance services, Bernardini & Donovan partnered with ThinkHR last year to help our small business address HR and compliance challenges. You can read more about this initial partnership here.

We’ve enjoyed having a human resources partner to handle potential employee issues, risk management, and more, and even talk about our experience with monitoring compliance-related activities using ThinkHR here. However, changes were made in 2019 that we want to share with you — namely in our HR partner’s collaboration with Mammoth to make Mineral™.

According to the Mineral website:

  • 53% of small businesses spend more than 10 hours per week on HR and compliance issues

Compliance rules and regulations are always changing, so it’s important that small businesses like ours have help to navigate the complex HR and compliance landscape. Mineral provides the resources, tools, experts and alerts that organizations need to thrive.

  • 80% of Mineral™ clients do not have an HR certification

HR goes way beyond employee benefits, hiring and firing. Small businesses need to stay compliant with state and federal laws, maintain employee job descriptions, create up-to-date employee handbooks as well as make sure everyone is properly trained.


Federal and state laws and regulations seem to change faster than you can keep up. Mineral offers real-time alerts, timely guidance, and tangible action items so small businesses never miss a key compliance date again.

With over 500,000 clients, 2,700 partners, and 195,000 HR and compliance issues resolves in just the last year, Mineral combines certified HR experts with tech-enabled tools to make HR compliance more feasible for businesses around the nation.

The innovative platform is a one-stop resource for small businesses, and it’s filled with everything you need to tackle even the trickiest workplace issues with total confidence. While the name has changed, businesses can still count on Mineral for the same great HR and compliance solutions that hundreds of thousands of businesses have come to rely on.

Mineral™ is still focused on providing proactive solutions for businesses while helping them take the guesswork out of HR and compliance so they can experience peace of mind. But there’s much more where that came from, so click the link below to learn more about the relaunch!


You can read more about each of Mineral’s updates and additional updates on the Minerals resource center page here. But here are some important points we’ve selected from the resource page for easy viewing: 


The COVID-19 pandemic has challenged and transformed the way small businesses operate. To help small businesses navigate the most common HR and compliance situations, Mineral has provided some essential COVID-19 resources for employers.


Note to employers: State and local laws and orders may provide different or additional requirements for employers regarding masks or face coverings, including guidance on whether employers must provide and pay for them, who must maintain and clean them, and more. Review applicable mandates to ensure compliance.


    • Notice of Furlough (COVID-19) — Use this letter to notify employees of a furlough due to COVID-19. Be sure to customize the template and remove the bracketed text.

    • Recall From Furlough – Revised Offer Letter (covid-19) — Use this template when recalling an employee from furlough due to COVID-19 and offering their job back. The letter contains a section to outline any changes between the new and old positions. Be sure to customize the letter by replacing the bracketed text.

    • Quick Start Guide: Deciding Who to Recall from Furlough or Layoff — Deciding which employees to return to the workplace following a furlough or temporary layoff, and in what order you’ll call them back, will require an individualized analysis for each organization. For those who aren’t sure where to start, we provide this as a starting point. 


Use this letter to inform employees of potential exposure to a communicable illness. The letter provides space for information about the illness as well as steps to take. Be sure to customize the letter by replacing the bracketed text.


Back in 2016, an HR Manager posted on LinkedIn about the importance of HR policies and procedures in the workplace.

“Human Resources Policies and Procedures are Important as they provide structure, control, consistency, fairness and reasonableness in [small and medium-sized enterprises]. They also ensure compliance with employment legislation and inform employees of their responsibilities and the Company’s expectations.”

As small businesses continue to find our balance after a long and exhausting year and a half, we remember that every business benefits from understanding the importance of workplace compliance. Because proper compliance doesn’t just protect your employees… it protects you, too.

The difference between health, vision, and dental insurance

Health insurancePeople often think of health, vision, and dental insurance as being one and the same. Although it might seem like a no-brainer, it can be hard to differentiate between this trio because they’re often spoken about as a comprehensive 3-in-1 health plan.

It’s important to understand health, vision, and dental insurance as separate entities, though. Each of these could affect key aspects of life including emergency situations and even taxes.


Health insurance (medical):

Health insurance generally covers eye or oral care in relation to a medical condition. For instance, if you need an eye exam because of cataracts, dry eyes, complications from diabetes, or in relation to diagnosed high blood pressure, then your health insurance will usually cover the eye care.

You don’t need vision insurance for this coverage, but you may be able to use your health insurance to cover your medical eye condition or eye care needs and then use your vision insurance to cover your glasses or contact lenses. The same could be applied for dental work in relation to a health condition. However, doctors address broader health concerns and send patients to a specialist if necessary — that’s when vision and dental insurance come in handy.
According to this article published by a personal finance website, the differences between these three common insurances aren’t as subtle as we think and shouldn’t be alternated one for the other.

Vision insurance:

A vision insurance policy is different from your health insurance policy in that regular medical health insurance protects you from unexpected costs for eye injury or disease. Vision insurance provides coverage for eye care services, such as those rendered by ophthalmologists, optometrists, and opticians and is, therefore, not traditional health insurance.

Health insurance is typically limited to injuries and disease and doesn’t usually cover lenses and other forms of vision correction. Since vision insurance provides an added wellness benefit for healthy eye exams — such as routine eye care, prescription eyewear and contact lenses, and other vision services — at a reduced cost, it fills this void.

This PDF provides more information on how vision insurance differs from medical insurance.

Dental insurance:

Simply put, dental insurance is insurance that provides coverage for dental expenses, such as those rendered by dentists, orthodontists, periodontists, and other medical care providers. Traditional health insurance rarely covers dental expenses; thus the need for separate dental policies.

One dental group details that dental is considered a separate entity from medical because dentists and doctors undergo different training and schooling. Most of the time, x-rays and other preventative dental care is not covered under typical medical plans. Because of this, you will need a dental plan that covers oral care.

To learn more about the specific differences between medical care and dental care, click here.


You might be disappointed to learn that dental and vision insurance do not count as health insurance. This means if you only have this kind of product, you may have to pay the fee. This includes coverage only for vision care or dental care.

• If dental or vision care is covered as part of your health insurance plan, you pay one monthly premium for everything.

• If dental or vision care is not covered in the plan, you can purchase stand-alone policies to cover those services.

Are vision and dental tax-deductible?

You can deduct vision insurance premiums, eye exams, and eye surgeries from your taxes if you paid for those expenses out-of-pocket. But, any costs covered by a vision insurance plan are not tax-deductible. Additionally, you can’t deduct any portion of your insurance premium that your employer paid.

Dental insurance premiums may be tax-deductible. The Internal Revenue Service (IRS) says that to be deductible as a qualifying medical expense, the dental insurance must be for procedures to prevent or alleviate dental disease, including dental hygiene and preventive exams and treatments.

The full list of acceptable forms of tax-deductible health insurance can be found here.


Overlap exists where medical doctors, optometrists, and dentists may be required to work in tandem, but such care still typically operates separately. This is because fields such as optometry and dentistry are specialty areas of medicine. This is also part of why vision and dental fall under medicine care but neither qualifies as a comprehensive medical plan.

You can purchase these stand-alone policies to cover specific services, but a complete health benefits package includes dental, vision, and life insurance coverage.

For more information on how to find the right plan for you, visit https://www.bdhealthinsurance.com/ or call us at (909) 792-5100.

Is your health provider good? Pros/cons of a popular health care provider + reviews

leading health care providers

health provider good

With over 12.5 million  members, Kaiser Permanente is currently recognized by Americans as one of the leading health care providers and not-for-profit health plans.

The thing with Kaiser Permanente is that it’s not just a health insurance company. It’s a managed care organization. Consumers can purchase a health insurance policy and receive medical care from one of the Kaiser Foundation Hospitals and medical centers.

But does its popularity make Kaiser Permanente inherently better than other health care providers in the market? Let’s consider 3 pros and 3 cons of Kaiser Permanente, including some reviews of real KP member experiences:

  • Pro 1: Easy to View Plan Options

  • Pro 2: Variety of Health Insurance Plans

  • Pro 3: Unique Provider Network Approach

  • Con 1: Negative Customer Reviews

  • Con 2: Service Areas
  • Con 3: Limited to Kaiser Permanente Hospitals and Medical Centers


Easy To View Plan Options

The plan selection at Kaiser Permanente is quite admirable. Kaiser Permanente won’t require you to give out personal information like your DOB or parts of your medical history to get even the most basic information about its insurance policy options in your area. You’ll be able to see health insurance options in your area after providing the following information:

  • Whether you are turning 65 during the year

  • If you get insurance through an employer

  • If you’re looking for an individual plan or for a group

  • Your zip code

Getting the cost information for a plan will require further research because the monthly premium depends on several factors, like age. But the initial questionnaire will give you access to brief descriptions of the types of plans available and the overall coverage you can expect.

Variety Of Health Insurance Plans

Kaiser Permanente offers individual, family, and employer-provided health insurance plans. It also offers Medicaid, Medicare, and charitable health insurance to individuals who qualify along with catastrophic plans.

One Oregon KP member wrote:

Kaiser Permanente is the best supplemental insurance provider. I pay $5 copay to see my primary care doctor, $10 to see a specialist, and $25 for urgent care. I only paid a copayment of $125 for a $20,000 surgery. My prescriptions are only $5 for a month’s supply, and $10 for a three month supply.

Employers interested in adding vision and dental insurance to their employee health benefits can offer dental and vision insurance through Kaiser Permanente, too.

Unique Provider Network Approach

One KP member based in West Covina wrote: “Able to communicate with Dr through e-mails and texts. […] Kaiser is like Mini mart, everything you need is available at all facilities.”

As you consider Kaiser Permanente medical insurance plans, keep in mind that it does not offer typical network structures, like Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) plans.

Instead, Kaiser Permanente has its own facilities and providers for patient care. However, this could be a pro. As one member states: “It is very convenient to have a pharmacy, lab, and x-rays onsite.”

Care received elsewhere is not covered by the insurance provider. We’ll talk more about this in the following section, which focuses on some cons associated with the company that might make you consider other health insurance providers.


Customer Service/Negative Customer Reviews

Though Kaiser Permanente has received a lot of praise for their customer service, they’ll also received a high percentage of negative reviews on various review platforms.

Most reviewers who left 1-star reviews shared difficulties with claims payments and dissatisfaction with care received from Kaiser Permanente providers. For example:

Long phone wait times, inability to access doctors’ offices to leave message, extraordinarily long wait times to talk to appointment schedulers, same thing for pharmacy inquiries. — Bellflower KP Member

Prepare to stay on the line for 45-minutes only to make a phone appointment 5-days later where they can then make an appointment for you. Seattle, WA KP member

A high proportion of negative reviews is not uncommon for health insurers. However, consider issues found in reviews as you decide whether or not to buy a health plan from Kaiser Permanente.

Service Areas

One major limitation of Kaiser Permanente is the span of states that Kaiser Permanente can work with — or should we say, the lack of span of states.

This company limits itself to just several states out of the 50 in the U.S., which means its health plans aren’t even an option for you if you live outside of these states.

If Kaiser Permanente’s plans are not available in your area, your only choice is to consider another insurance company that does service your area.

Limited to Kaiser Permanente Hospitals and Medical Centers

Unlike most health plans that allow enrollees to choose the provider network structure (PPO or HMO), Kaiser Permanente plans only offer coverage for its hospitals and medical centers.


Best Company: Is Kaiser Permanente Good?

ConsumerAffairs: Top 1,990 Kaiser Insurance Reviews

The Balance: Kaiser Permanente Health Insurance Company Review

What you need to know about Medicare & home health care

home health care

Medicare home health care costs, payments, and how to make the right decision

home health careAccording to Johnson, Fred Johnson, president and CEO of Team Select Home Care, a national home health agency, there are two primary types of home health care:

  1. Skilled home health care is prescribed by a physician and includes physical therapy, occupational therapy and speech therapy, as well as care provided by a registered nurse.

  1. Non-skilled home health care includes services such as bathing, cleaning and errands. This type of care is typically provided by a certified nurse assistant or home health aide.

Related reading(s): Forbes: How Much Does Home Health Care Cost?

In general, home health care includes a wide range of health and social services delivered that are given by a variety of skilled health care professionals in your home to treat illness or injury.

These services include skilled nursing care as well as physical and occupational therapy, speech-language therapy, and medical social services.

The home health staff provides and helps coordinate the care and/or therapy your doctor orders.

Along with the doctor, home health staff create a plan of care, which is a written plan for your care. This plan tells what services you will get to reach and keep your best physical, mental, and social well-being. Where possible, home health care helps you get better, regain your independence, and become as self-sufficient as possible.

Related reading(s): Medicare and Home Health Care

Medicare pays for you to get health care services in your home if you meet certain eligibility criteria and if the services are considered reasonable and necessary for the treatment of your illness or injury.

Services covered by Medicare’s home health benefit include intermittent skilled nursing care, therapy, and care provided by a home health aide. Depending on the circumstances, home health care will be covered by either Part A or Part B.


The need for home health care has grown for many reasons. Consider three following benefits of home health care:

  • Medical science and technology have improved. Many treatments that could once be done only in a hospital can now be done at home.

  • Home health care is usually less expensive and can often be just as effective as care in a hospital or skilled nursing facility.

Most patients and their families prefer to stay at home rather than be in a hospital or a nursing home.


Medicare covers your home health care if:

  1. You are homebound, meaning it is extremely difficult for you to leave your home and you need help doing so.

  1. You need skilled nursing services and/or skilled therapy care on an intermittent basis.

    1. Intermittent means you need care at least once every 60 days and at most once a day for up to three weeks. This period can be longer if you need more care, but your care needs must be predictable and finite.

    2. Medicare defines skilled care as care that must be performed by a skilled professional, or under their supervision.

    3. Skilled therapy services refer to physical, speech, and occupational therapy.

  1. You have a face-to-face meeting with a doctor within the 90 days before you start home health care, or the 30 days after the first day you receive care. This can be an office visit, hospital visit, or in certain circumstances a face-to-face visit facilitated by technology (such as video conferencing).

  1. Your doctor signs a home health certification confirming that you are homebound and need intermittent skilled care. The certification must also state that your doctor has approved a plan of care for you and that the face-to-face meeting requirement was met.

    1. Your doctor should review and certify your home health plan every 60 days. A face-to-face meeting is not required for recertification.

  1. And, you receive care from a Medicare-certified home health agency (HHA).

Note: You cannot qualify for Medicare home health coverage if you only need occupational therapy. However, if you qualify for home health care on another basis, you can also get occupational therapy.

When your other home health needs end, you can continue receiving Medicare-covered occupational therapy under the home health benefit if you need it.

Medicare pays your Medicare-certified home health agency one payment for the covered services you get during a 30-day period of care. You can have more than one 30-day period of care. Payment for each 30-day period is based on your condition and care needs.

Related reading(s): Medicare Interactive: Home Health Basics; Centers for Medicare and Medicaid Services


Ask yourself a few questions.

  • Is the home care agency licensed by the state? Most states require a license and reviews. Request a review through your state health department.

  • Is the home care agency certified by Medicare to meet federal requirements for health and safety? Most home care agencies are not, but some are Medicare certified. If they are not certified by Medicare, ask why not?

  • What type of screenings are performed before hiring staff?

  • Ask for references. Ask for a list of doctors, hospital discharge planners, or other professionals with experience working with the home care provider.

  • Ask for a list of current and former clients.

  • Ask doctors, family and friends for home care recommendations.

Related reading(s): Selecting a Home Care Agency

What free-market healthcare looks like in the U.S. (pros and cons)

free-market healthcare

Overview: Evaluating the disputable pros and cons of a free-market healthcare system.

free-market healthcare

Americans have been debating health care for decades, and establishing a free market in healthcare in the U.S. has been part of the debate for decades. Characterized by opaque pricing, varying levels of quality, and inefficiencies that make getting care confusing for patients and providers alike, the U.S. health care system today isn’t really a free market, but there are some pockets that operate more like one than others.

As health insurance providers, we understand firsthand the complexity of any insurance decision-making process. And whether you’re a consumer or an employer, keeping up with all the changes (federal and state laws, insurance company plans change, and ongoing conversations about what will, what was, and what currently is) could be confusing.

What is free market health care and why the debate

Free market health care is a system where there is minimal or no government regulation. With this minimal regulation, health care providers are free to provide services without needing to satisfy strict regulatory standards and requirements. As a result, health care providers do not need to comply with restrictive government licensing.

The debate usually boils down to: Which path would improve access to care and lower costs — a more centrally-planned health care system or a more free-market approach? Today we’ll be focusing on the pros and cons of the latter: a free-market approach to the healthcare system.

Related reading(s): Free Market Health Care; Does the U.S. have ‘free market’ health care?

Some pros and cons of free-market healthcare


  • Improved cost and quality of healthcare resulting from little to no government involvement

  • Flexibility to develop policies that accommodate numerous consumer preferences for healthcare financing and delivery

Improved Cost and Quality of Healthcare Resulting From Little to No Government Involvement

Some argue that to improve the cost and quality of healthcare, the government should get out of the way and let the free market reign. Thus, the biggest advantage of “free market health care” is the fact that it requires little or no government involvement.

Healthcare regulations at all levels of government can increase price, limit

choice, and stifle competition — which, in combination, lead U.S. healthcare to fail to provide its full value.

Flexibility to Develop Policies That Accommodate Numerous Consumer Preferences for Healthcare Financing and Delivery

A key goal for the healthcare marketplace is to provide effective, high-value care to all Americans. Recent health policy changes at the Federal and State levels have sought to give consumers more control over their medical expenditures so they can seek greater value for their health investment.

In Chapter 5 of the Economic Report of the President (2021), it’s argued that free-market healthcare aims to foster healthcare markets that create value for consumers through the financing and delivery of high-quality and affordable care. Government mandates can reduce competitive insurance choices and raise premiums.

By focusing on choice and competition, States are encouraged to provide flexibility to develop policies that accommodate numerous consumer preferences for healthcare financing and delivery.


  • Free-market healthcare is a concept, not a system; insurance is based upon risk pools, not competition

  • There is no evidence that giving consumers “skin in the game” prompts them to become more astute healthcare consumers

Free-market Healthcare as a Concept, Not a System; Insurance is Based Upon Risk Pools, Not Competition

According to one Family Law attorney, ““free market health care” is a concept, not a system.” In theory, by increasing competition and making the environment “friendlier” to health insurers, the cost of health insurance will decrease. The main problem with the theory of free market health insurance is the fact the insurance is based upon risk pools, not competition.

For health insurers, premiums are determined by the probability of the members in the risk pool needing health care. For health insurance companies, cost savings come from managing or manipulating the risk pool. For example, by removing people with “pre-existing conditions,” an insurer can create a healthier risk pool with fewer payouts and thereby lowering the premiums. Therefore, free market health care cannot even attempt to insure everyone.

The advantage of increasing the number of insurers in a given market is questioned by many as there are no practical examples of any significant decreases in premiums.

By comparison, it has been shown that when the health insurance industry is deregulated, the cost of insurance decreases. However, that decrease in cost comes at a price: more “loopholes” for insurers not to pay claims. It costs less because it is worth less.

Related reading(s): Many disadvantages of ‘free market’ health care

There is No Evidence That Giving Consumers “Skin in the Game” Prompts Them to Become More Astute Healthcare Consumers

Because of the structure of our healthcare system, consumers are, for the most part, unable to make informed decisions that in other markets can lead to increased competition for consumers’ spending. There are many reasons for this, including information asymmetry, healthcare not viewed as a commodity and the need for third-party payers.

You can read more about this argument in the article, “Rethinking Consumerism in Healthcare Benefit Design.”

Free COBRA health insurance ends Sept. 30: 3 options for the unemployed

COBRAs premium health insurance ends Sept 30

Overview: Unemployed? Here are 3 things you could do when your COBRA’s premium health insurance ends Sept. 30

  • Switch to an Affordable Care Act policy once your free coverage ends

  • Qualify for a special enrollment period (SEP)

  • Talk to your plan administrator and/or former employer

COBRA health insurance ends Sept. 30When Sept. 30 rolls around, it’ll be goodbye to that premium health coverage from COBRA and hello to many, many questions (and a bit of financial panic for the unemployed). But we’ll start by saying you shouldn’t panic — there are options that unemployed individuals could and should begin to consider now.

Keep these things in mind: It’s true that after Sept. 30, the group health plan can charge the usual COBRA premium for the coverage. And the premium assistance lasts through Sept. 30 but may end sooner if you reach the end of your maximum COBRA continuation coverage period which is, generally, 18 months.


Option 1: Switch to an Affordable Care Act policy once your free coverage ends.

The special enrollment period for Affordable Care Act coverage ends Aug. 15. Here’s why it’s a useful option: ACA policies — by contrast to COBRA coverage — are typically subsidized with tax credits that make the coverage more affordable.

In one particular case, a spouse lost their job and was on COBRA continuation coverage for health insurance. They didn’t have to pay the premiums (through Sept. 30) as a result of the American Rescue Plan (passed in March). The question was asked if there was anything available on Oct. 1 if the spouse was still unemployed by that time.

The American Rescue Plan requires employers to pay COBRA premiums for eligible former employees for April through September. The employers will be reimbursed through a tax credit. (The subsidy may last fewer than six months if someone’s COBRA eligibility ends before September, or if they become eligible for group coverage through their job or their spouse’s job.)

When the premium-free coverage ends, the spouse would qualify for a special enrollment period that allows them to switch to an Affordable Care Act policy. Not only that, but anyone who is unemployed at any point during 2021 will qualify for a premium-free comprehensive policy through the ACA for the rest of the year.

Related reading(s): What you need to do when free health insurance for unemployed people ends Sept. 30

Option 2: Qualify for a special enrollment period (SEP) to enroll in individual market health insurance coverage, such as through a Health Insurance Marketplace®.

When your COBRA premium assistance ends, you may be eligible for a SEP to enroll in coverage through a Health Insurance Marketplace®, or to enroll in individual health insurance coverage outside of the Marketplace. You may also qualify for a SEP when you reach the end of your maximum COBRA coverage period. Below are links to additional information.

  • For more information about enrolling in Marketplace coverage, see:

    • HealthCare.gov

    • Or you can call 1-800-318-2596 (TTY: 1-855-889-4325).

If your state has its own Marketplace platform, find contact information for your State Marketplace here:

You may apply for and, if eligible, enroll in Medicaid coverage at any time. For more information, go to:


Option 3: Talk to your plan administrator and/or former employer

Karen Pollitz, a senior fellow with the Kaiser Family Foundation, said some employers and COBRA administrators were still working out the details. If you believe you are eligible for the subsidy that ends after Sept. 30 and haven’t received a notice with the required forms, you can notify your former employer. In more detail, Pollitz encourages individuals to:

  1. Notify their former employer

  1. Fill out and sign this form, published by the Department of Labor

    1. Turn the form into your plan administrator if you’re already enrolled in COBRA

    2. Send the form to your former employer if you’re trying to sign up

Pollitz said if you have a relationship with your provider, you could also ask if it’s possible to wait a little longer to bill your insurer until the COBRA coverage kicks in.

Related reading(s): Stimulus Provides Free COBRA Health Insurance for Unemployed; What You Need to Know


Remember: The Affordable Care Act is over 60,000 pages long. Medicare is written over tens of thousands of pages. And Insurance Laws and Regulations are profoundly extensive. So if you’re wondering what to do when COBRA’s premium health insurance ends, we can help.

We understand that there is not a single “best” plan when it comes to health insurance — and it’s even more complicated when unemployment is involved. And we understand that your needs are unique.

This is where we come in. Contact us to get your questions answered! We’ll offer our expertise in health insurance so you’re taken care of during these complicated times.


Debunking 3 common U.S. health insurance myths

common U.S. health insurance myths

Preview: Let’s take a look at 3 popular myths about US. health insurance that might take you by surprise.

Health insuranceHere are some topics of conversation (aka “myths”) we’ve heard people discuss about health insurance in America that need major clarification:

  • The relationship with age and health insurance

  • Is Canada better than the U.S. when it comes to health insurance?
  • Outrageous out-of-pocket costs on top of premiums

Health insurance myth 1: Young and healthy individuals do not need health insurance

After the 2020 pandemic, this myth has likely deceased; however, we’re aware that conversations about health insurance often included this notion.

Research shows that people between 18 and 34 tend to be at their healthiest. So we’re not surprised that those in their early or mid-20s usually do not require much medical attention  However, since many in this age bracket feel that they tend to “not need” medical attention, that also means that many feel they do not need to buy health insurance.  But this is not true.

Young and healthy individuals can become sick. As we mentioned earlier, after the COVID-19 outbreak, many young people fell sick due to the virus and had to be hospitalized. For those who didn’t feel that they “needed” health insurance, this often meant that they would have to pay out-of-pocket.

Even if one isn’t sick or does haven’t signs of preexisting illnesses, buying health insurance early — before one develops any illness — ensures that there isn’t a waiting period. In case of any pre-existing illnesses, there is a waiting period of two to three years in health insurance for such diseases. During that period, if the policyholder is admitted to the hospital due to any ailment related to that disease, it won’t be covered by the health insurance company.

The rundown: Age shouldn’t and doesn’t determine whether a person should buy health insurance.

Related article(s): 6 Health Insurance Myths Busted

Health insurance myth 2: Canada has a better health care system than the U.S.

And so the debate rages on, and with good reason. Many people in the U.S. believe Canada’s healthcare system is superior to the U.S. for various reasons (lower costs, more services, universal access to health care without financial barriers, and superior health status). So, we completely understand this debate.

However, there’s a limit on what you can get with the Canadian healthcare system. Matt Tassey, a spokesman for LIFE, says, “Universal health care isn’t better; it’s just different.” Tassey many Canadians have come to the U.S. for care because they can actually get it. There is no rationing (in America) of any sort, so they can just write a check.

Americans may complain about the high cost of health care in the U.S., but there are two sides to every situation. In this case, Canadian healthcare isn’t necessarily “better.” Especially if Canadians have come here to the U.S. to receive various treatments.

Related article(s): 7 Health Insurance Myths Debunked

Health insurance myth 3: I will have to pay huge amounts out of pocket

We can’t deny that when it comes to health insurance, many people have to pay more than just their premiums. Some of these additional costs include the following:

  • A deductible. This is the amount that you must pay out-of-pocket before your health insurance pays for services. This amount resets each year.

  • A copayment. This is a flat fee that you pay each time you go to the doctor or fill a prescription and is usually printed right on your insurance card.

  • Co-insurance. Coinsurance is your share of costs for healthcare services and is generally figured as a percentage. Coinsurance usually kicks in once you’ve met your deductible.

For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family. The good thing is that there is a cap that’s placed on out-of-pocket costs for marketplace plans.

Once your out-of-pocket maximum is reached, your insurer has to pay the rest. For most people, $8.550 or $17,100 is a huge amount. However, if you think of what your costs would be without healthcare coverage, those amounts are pretty tame.

For example, the average cost for each death in a motor vehicle accident is $1,130,000. Meanwhile, the average cost for each nonfatal disabling injury is $61,600. Of course, this is a generalized statement (costs vary from state-to-state and with other factors included).

Nonetheless, there’s no denying that the cost of an accident is a lot. As such, most folks would choose the out-of-pocket maximum amounts over accident figures any day!

Related article(s): Top 5 Health Insurance Myths

The evolution of American health insurance services over the last few decades

evolution of American health insurance services

Overview: How health insurance has evolved for Americans in recent years.

evolution of American health insurance services evolution of American health insurance services

evolution of American health insurance services

From illness trends to the implementation of technology, changes in America health insurance services remain slow, complex, and constant much like the overall healthcare system.

Various healthcare proposals have been introduced over the years, but it’s the complexity of the healthcare industry in its entirety — environmental and technological factors — that remain the primary causes to changes in health insurance services in America.

  1. Increase in technology & cost of medical services

  2. Managed care & ability to select a doctor

  3. Extending Medicare coverage for prescription drugs
  4. How health care will change in the future (technology & more)

1. New technology; increased cost for health insurance

One primary change in American health insurance services is the increased cost for health insurance as a result of new technological treatments. Maybe back in the day, you could get away with surgery and a hospital stay without health insurance but now… not so much. (That goes without saying.)

This goes in tandem with the tremendous medical technology now available. If patients want to reap the benefits of these technologies, they must be willing to accept the ever-increasing medical costs that come with it.

2. Managed health care; limited doctor selection

As the cost for health insurance has risen there’s been a move toward managed health care. This move, in turn, has changed the health American insurance industry and services by creating limited flexibility for someone to choose a doctor.

Managed health care is a term that refers to health plans that involve selective contracting between insurers, health care providers, and employers to direct employees to a specified group of cost-effective health care providers.

This rapidly-changing revolution has affected everyone from physicians and hospitals to patients and insurance carriers.

Says Marc Maraccini, Vice President of Sales and Marketing at North Texas Healthcare Network: “Fifteen years ago, it used to be that a person had an insurance provider that covered almost anything with no questions asked. But this process made it difficult for employers to estimate how much they would pay for their employees’ health care. This is because a physician or hospital could charge almost any amount for a procedure or prescription.

A managed care plan has caused most people to receive coverage through their employer over the last decade. This practice saves money because unlike traditional plans, managed care plans contract directly with the health care providers to set payment for services.

Related article(s): The Evolution of Health Insurance

3. Medicare updated to include prescription drug coverage

In the early 2000s, one major change health insurance services saw was the update to Medicare to include prescription drug coverage. This idea  that was initially proposed by George W. Bush eventually turned into the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (sometimes called Medicare Part D). Enrollment was (and still is) voluntary, although millions of Americans use the program.

For a detailed timeline of the evolution of the American health care industry from Colonial Times (1700s) to now (21st Century), take a look at the related article below.

Related article(s): The History of Medicine and Organized Healthcare in America

4. Changes to expect for the future of health care services for Americans

As the baby boomer generation approaches retirement, thus qualifying for Medicare, healthcare spending by federal, state, and local governments is projected to increase.

Along with policy and technological changes, the people who provide healthcare are also changing. Providers are an important part of the healthcare system and any changes to their education, satisfaction, or demographics are likely to affect how patients receive care.

In the future, healthcare providers are more likely to focus their education on business than ever before. A large-scale analysis of Harvard Business School’s physician graduates indicates substantial growth in the number of physicians pursuing M.B.A. degrees in the last decade. This growth may result in more private practices and healthcare administrators.

Healthcare technology trends that focus heavily on patient empowerment will be on the rise (artificial intelligence, VR/AR, 3D-printing, robotics or nanotechnology). For example, the introduction of wearable biometric devices provide patients with information about their own health. Telemedicine apps allow patients to easily access care no matter where they live. These types of new technologies are focused on monitoring, research, and healthcare availability so patients will be able to take a more active role in their care.

With advances in digital healthcare technologies, healthcare workers have to embrace emerging healthcare technologies with an open mind in order to stay relevant in the coming years.

Related article(s): How We Can Expect The Healthcare Industry to Change in The Future and 10 Ways Technology Is Changing Healthcare

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