What a wild November and it's only mid-month.  Devastating, ghoulish wildfires in California, a White House press conference that looked like a pro wrestling event and a near blizzard snowstorm that struck south central Pennsylvania this week, causing scores of car accidents and nightmare commutes, all while the autumn leaves remain on the trees!

You know times are weird when the recent mid-term elections turned out relatively normal, including another run-of-the-mill Florida voting ballot fiasco, with few surprising outcomes.  As expected, Democrats took control the House while Republicans held control of the Senate.

Another normal situation is the 2018 college football season, as once again, Alabama appears head and shoulders better than the rest of the field, with a starting roster full of future NFL players that would give the 2018 Buffalo Bills a difficult time (that zinger was for you, Mike).

A divided federal government starting in 2019 means even more partisanship and gridlock through 2020, likely beyond.  It is already a poisonous atmosphere in DC and will worsen when this new polarized Congress is seated in January.

That gridlock means the US health insurance system will remain broken, miserable and dysfunctional for several more years.  Even if Trump loses in 2020, it is unlikely that Democrats take the Senate that cycle, which yields at least two more years of gridlock and legislative inaction.  I think it's ten years out before we get material change to the current health law.

With complete control of the federal government over the past two years, Republicans had a golden chance to effect an overhaul of Obamacare or replace it with something more logical – they had eight years to devise a new program! – but they failed and the country is worse for it.

This time of year, when many of my friends and clients are pumped up for deer hunting season, I'm again frazzled over the health insurance enrollment season, trying to solve this rubik's cube of financial planning challenges for many of our clients.

The fact is that small business owners and Baby Boomers who want to retire before age 65 have become the unintended victims of Obamacare - and these groups comprise most of our clients!

Having re-affirmed my grim outlook on the future of our health insurance system, let me offer an update on the 2019 health insurance landscape and a few of the planning options at our disposal.

First, some good news.  Earlier this year, Trump announces a reversal of the Obama executive order reinstating short term health insurance plans with terms of up to 364 days.

When Obamacare was slapped together in 2010, it left out language about limiting short term insurance plans and they served as a nice loophole for several years until Obama cracked down on them via executive order, limiting short-term health plans to no longer than 90 days.  This past spring, Trump reversed this decree and short-term health plans can again be written for 364 days starting in 2019.

In the past, a key problem with short-term health plans is that they do not contain the "essential benefits" that ACA plans must offer, so policy owners were subject to the individual mandate penalty.  Due to the 2017 tax law, the penalty disappears in 2019, so the 364-day health insurance plans could again serve as affordable health insurance for healthier individuals.

The rub with short-term health plans is pre-existing medical conditions are excluded, so they are best suited for healthy individuals.

For those with health issues and no group health insurance, there is no panacea for 2019 and health insurance remains complicated.  Sure, folks who don't make much money get free insurance (Medicaid) or highly subsidized, benefit rich health insurance, but the rest are left to fend for ourselves.

We work to legally game this unfair system and tamp down our client's annual taxable income to qualify for an ACA premium subsidy.  That's a tall order, however for a pre-retiree with many years to bridge the Medicare eligibility age.

Another new health insurance strategy (since 2017) is available for employees of a small business that doesn't offer group health insurance.  It is called a Qualified Small Business Employer Heath Reimbursement Arrangement ("QSEHRA").

If you are small business employee (under 50 employees), sit up on this one:  In 2019, via the QSEHRA, an employer can reimburse employees up to $5,150 (individual) and $10,450 (family) for health expenses, including premiums.   The cash reimbursement is not taxable to the employee – income or payroll – and is deductible for the employer, a win-win proposition.  The catch is the employee much purchase ACA-caliber health insurance (e.g. no short term health plans) and provide documentation to the employer.

I really like this cost-sharing concept to help reduce health insurance premiums, when applicable.  In fact, it may be savvier tax planning to ask your employer to set up a QSEHRA plan and take a reimbursement for health insurance premiums instead of a taking raise in '19 (okay, ask for both and settle for one).

Carrie and I muster on with coverage through Medishare , the religious-based cost sharing program with our fingers crossed.  I'm more than a little nervous about a major future insurance claim, but we just can't bring ourselves to pay $36,000 a year in premiums for an unsubsidized high deductible ACA health insurance to cover a healthy, middle-aged, good-looking couple.

A final word of caution.  We are seeing new individual medical policies sponsored by obscure insurance carriers.  I know how desperate folks are to lower their premiums and deductibles, but the test of an insurance carrier is their ability / willingness to pay claims.  Be careful when choosing a medical insurance company and focus on their integrity and financial wellness, not the proposed premium.

The reality is that the highly-flawed ACA law and our feckless federal government means that we and many others face LONG period of white-knuckles over health expense risk until we reach the Medicare health insurance goal line.

Happy Thanksgiving and, until next time, be well….Tim