It’s the perfect time to talk about open enrollment for 2020 ACA Marketplace health insurance, which began on Friday, November 1 and will end on Sunday, December 15th.
This is the time period when folks with health insurance purchased through the ACA marketplace can enroll for the first time, re-enroll in their current plan (if it is still offered and they like it) or compare plans and choose a new one. Depending on where you live, you can shop for a plan on HealthCare.gov or the state exchanges. Health literacy is vital for anyone choosing an insurance plan, no matter if it’s on the marketplace, an employer-sponsored plan, or a federally-managed plan.
There have been significant attempts in the past few years to hobble the ACA and the marketplaces, but they are still alive and well and easier to use than ever before. Unfortunately, picking the right health insurance can still be a serious challenge, no matter your education level. You need to understand the delicate balance of premiums, deductibles, other costs, and then choose which plan fits those needs. Even if you do everything right, like making sure your provider is in your network, there might be a surprise at the end of the day – a new medication could be a Tier 3 (the most expensive), your provider is in network but the OB on call who delivers your baby is out of network, etc. There are policy proposals to address the latter, known as “surprise billing,” but overall, insurance is a complicated beast. And yet, it is still better to have it and not need it than not have it and desperately need it later.
In the first quarter of 2019, there were 13.7 million people enrolled in an ACA insurance plan through the marketplace, down from a peak of 17.4 million in 2015. The marketplace was intended to be the insurance option for individuals who did not have employer-sponsored health insurance and did not qualify for any other type of insurance (Medicaid, Medicare, TriCare, etc.). When it was first implemented in 2014, there was significant growth. It was the first time in nearly all states that people with pre-exisiting conditions could purchase on an open marketplace and low-income people were eligible for a tax credit to help pay their premiums and reduce cost-sharing. Those who did not have insurance through another means and did not purchase on the marketplace were subject to a tax penalty. All plans in the exchange are required to meet federally established benchmarks to ensure standardized benefits.
There are a variety of possible explanations for the decline in enrollment, including rising premium costs, the expansion of (cheaper) loosely regulated plans, the repeal of the individual mandate (and thus the tax penalty for not having insurance), and economic improvement that has lead to gains in employment-sponsored coverage. The most significant declines in enrollment in 2017 and 2018 coincided with significant premium increases.
For those on the lower end of the income spectrum, the federal government provides subsidies known as “advance premium tax credits” to help people pay their premiums. Eligibility is set at around $50,000 in annual income for an individual and $100,000 for a family of four. This awesome calculator from Kaiser Family Foundation can help you determine subsidy eligibility! The subsidy is pegged to the price of the second-cheapest plan in the mid-level silver tier of plans. [Plans on the exchange range from bronze (the cheapest option with the least coverage) to platinum (expensive in premium but minimal co-sharing and expansive coverage).] When the cost of this plan decreases, so does the subsidy amount.
Unfortunately, this is a catch-22: it’s great when premiums fall for those who are paying the full price of their coverage, but it can be a serious shock to those who receive help in the form of this subsidy.
If you want some helpful tips for open enrollment, check out this piece from NPR. Now back to studying (with dreams of tap dance in my head)!