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posted: 1/4/2017 1:00 AM

Demystifying health insurance in these changing times

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Health insurance is not health care, it's insurance. We pay a premium to cover a perceived risk. As business owners, our job is to understand the risk and mitigate it both operationally and fiscally. In other words, it's all about cost versus benefits.

Let's start with the current landscape. As a result of the Affordable Care Act, most individuals without access to employer group coverage are either getting insurance or paying the tax penalty. According to the Illinois Department of insurance, in Northeastern Illinois the premiums for 2017 Marketplace plans have increased by 10 to 60 percent. We also know that our new president and the Republicans have promised to revise the laws and regulations that govern the current health care system. It remains to be seen how the legislative and regulatory process will unfold.

Obamacare is a complex structure of regulations affecting Medicaid, insurance companies, people with family incomes up to 400 percent of the poverty level (that's about $97,000 for a family of four), people with pre-existing conditions, and people who lose their insurance as the result of a move or job change. There are already proposals being developed to change the laws and regulations, but actually making the changes that affect individuals and businesses will probably take time. Laws must be passed, new regulations written, new plans developed by insurances carriers, those plans submitted to the insurance department of each state and perhaps the CMS for approval, overcoming any court challenges by vested interests, and finally educating people about their new options. So, it's unlikely that the current requirements will be significantly affected this year.

In contrast, employer group coverage has been around for a long time and premium increases have been moderate. For those over 65 and those under 65 who have been on disability for at least two years, Medicare has proven to work well, and it's been around for over 50 years.

While it's impossible to know now what individual coverage will look like in 2018, we do know what the current laws and options are. Individuals will be able to get coverage on the Marketplace until January 31 without qualifying for a special enrollment period. Through SHOP at, small business owners can get coverage for themselves and their employees. Small businesses with employees can also get group coverage from the insurance carriers directly. Many local business owners I have talked to are looking to group coverage to have access to a large PPO network or because the rates are relatively stable -- sometimes lower than currently found through the Marketplace.

When I work with people, we focus on needs and budget -- trying to balance those requirements. Individual needs can include specific doctors, hospitals, prescriptions, procedures, or treatments. We are accustomed to choosing our doctors, our specialists, and our hospitals and don't like having limits placed on those choices. Some of those choices will cost more than others, and most people don't have the patience to understand why. We spend time talking about how to use insurance effectively. It's not health care, it's not intended to keep you healthy. It's intended to protect you from catastrophic health care costs.

Because there are so many variables, the number of options can be overwhelming, but choosing coverage is all about optimizing your opportunities. Prioritizing your needs can be an effective way to evaluate those options. What's more important, the hospitals or the doctors? Is the cost of your prescriptions a concern? Do you have a procedure scheduled or are you expecting a child? Does everyone in the family need the same level of coverage? You may not get everything you want, but you can get something that makes sense -- for you and your family, for your business, and for your employees. In the end, it's a business decision.

• Dave Ferguson is a licensed independent insurance agent with HealthMarkets. He has offices in Des Plaines.