Obamacare Offers Cheap 'Catastrophic Plan' Option for Those with Canceled Plans

Obamacare Offers Cheap 'Catastrophic Plan' Option for Those with Canceled PlansIf your existing health care insurance has been canceled because of the Affordable Care Act (Obamacare), you will not be required to pay tax penalties for failing to get new coverage as is mandated under healthcare reform.
Health and Human Services Secretary Kathleen Sebelius says she will use authorities in the healthcare law to issue a “temporary hardship exemption” from those penalties.
Because of a last-minute, stopgap option announced Thursday, Americans whose plans were canceled will be able to buy a cheap, bare-bones “catastrophic plan” regardless of their age. Such plans had been intended for those under 30.
A low-premium catastrophic plan generally carries a high-deductible, requiring you to pay all medical costs up to a certain amount, usually several thousand dollars, if you were to suffer a catastrophic injury. Otherwise, costs for essential health benefits are generally paid by the insurance company.
In the Obamacare marketplace, catastrophic policies cover three primary care visits per year at no cost. They also cover free preventive benefits.
The stopgap option is the latest in a series of last-minute concessions made by federal officials as complaints from consumers mount in the days leading up to the Jan. 1, 2014 deadline for getting health insurance for the new year.
“If you have been notified that your individual market policy will not be renewed, you will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage,” the Centers for Medicare and Medicaid Services says in a new statement posted on its website.
It is estimated in media reports that about 500,000 people could benefit from the stopgap insurance option. These people have their own private insurance plans which are not being renewed in 2014, and they have not yet made other insurance arrangements.
A dedicated hotline for people who got cancellations, 1-866-837-0677, is being set up by the Health and Human Services Department
The latest move by the Obama Administration quickly drew criticism from the insurance industry.
“This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” Robert Zirkelbach, spokesman for America’s Health Insurance Plans, told the Associated Press.
Meanwhile, many health insurers have decided to give consumers more time to pay their first month’s premium, extending the deadline until January 10, 2014. Consumers signing up for Obamacare must pay their first month’s premium on time for coverage to begin.
However, not all health plan issuers are extending the payment deadline and some may still require you to pay on or before December 31, 2013.
Federal officials say consumers should check with their insurance company to confirm the date your premium is due.

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