Preparing for the Future: The Impact of expanded subsidies, the risk of their extinction and the Importance of Cross-Selling Supplemental Plans
Stay Ahead of Legislative Changes: Preparing for the Future of ACA Plans
As an insurance agent, staying updated on legislative changes affecting your clients and business is crucial. The Inflation Reduction Act (IRA) introduced significant enhancements to ACA plan subsidies, which are set to expire at the end of 2025. Here’s a modern guide to navigating these changes and supporting your clients with supplemental insurance products.
The Impact of the Inflation Reduction Act (IRA) Subsidies
Signed into law in August 2022, the IRA extended enhanced premium tax credits from the American Rescue Plan Act (ARPA), making ACA plans more affordable by:
- Enhanced Premium Subsidies: More financial assistance for lower premiums.
- Expanded Eligibility: Removing the upper-income limit for subsidies, allowing more people to qualify.
- Lower Premiums: Reducing the percentage of income enrollees must pay.
- Increased Enrollment: Boosting ACA plan enrollments due to improved affordability.
- Market Stability: Maintaining stability in ACA marketplaces with a broader, healthier risk pool.
The Risk of Subsidy Expiration
With these enhanced subsidies set to expire at the end of 2025, potential impacts on your clients include:
- Higher Premiums: Increased out-of-pocket costs for many.
- Decreased Enrollment: Potential decline in ACA plan enrollments, increasing the uninsured population.
- Financial Strain: Clients may struggle to afford premiums, leading to financial hardship and families potentially going without health insurance.
- Loss of Coverage for Middle-Income Families: Those earning above 400% of the federal poverty level will lose subsidies.
- Worsening Health Outcomes: Due to cost, clients might delay or forgo necessary care.
The Role of Supplemental Plans
To mitigate these risks, consider offering supplemental plans that help cover large deductibles and out-of-pocket expenses. Key options include:
- Hospital Indemnity Plans: Provide cash benefits for hospitalization, covering deductibles and expenses.
- Accident Insurance: Financial protection for accidental injuries, covering medical costs and lost income.
- Critical Illness Insurance: Lump-sum benefits for covered critical illnesses, aiding treatment and recovery costs.
- Dental and Vision Insurance: Covers routine and major dental and vision care.
- Short-Term Medical Plans: Temporary health coverage for clients in transition or needing stopgap measures.
Start Cross-Selling Today
Two easy products to start cross-selling are dental and vision plans. Here’s how to get started:
- Appoint with the Right Carriers: Get appointed with carriers like UHOne (United Healthcare), Cigna Supplemental Benefits, and Aflac.
- Educate Yourself: Attend training sessions like those offered by Agility’s Training Central.
- Cross-Sell During Enrollments: Offer dental and vision plans during ACA plan enrollments.
- Inform Your Current Clients: Let your existing clients know about these new offerings.
- Market and Promote: Update marketing materials and communicate the benefits through newsletters, emails, and social media.
Final Thoughts
By preparing for potential changes and integrating dental and vision plans into your portfolio, you can ensure your clients receive comprehensive coverage and protection against financial risks. At Agility Insurance Services, we’re here to support you every step of the way. Let’s make a difference together! For more information or support in cross-selling these products, please reach out to our team at Agility Insurance Services.
