Amid the political back-and-forth that plagued healthcare reform and the media for the last six months, Americans continued to wonder and worry about the future of their healthcare coverage under Obamacare. Now that Congress is shifting gears and healthcare legislation is on the backburner – at least at this moment – we can focus on the upcoming enrollment season. This fall, the 2018 open enrollment season will start on November 1 and last just 45 days per the current administration’s proposal, ending abruptly on December 15. A shorter enrollment period isn’t the only thing to look out for as the signup period draws near. Here are six changes you need to know about.
Last year, you may have been among the thousands of consumers who hit a brick wall during the enrollment process if you used an online broker to sign up for health insurance. Known as a “double redirect,” the process redirected customers from an online broker’s enrollment site to the HealthCare.gov site, then back to the online broker site to finish up – a process as dizzying and frustrating as it sounds. Ultimately, plenty of customers opted out of enrollment altogether to avoid the hassle.
For 2018, the double redirect has been eliminated. Consumers can now visit the online broker of their choice and apply for health insurance without having to leave the site at all. It should create a more seamless, streamlined process for enrollment this year. This is doubly good considering that the enrollment period itself has been cut down to just 45 days.
Note that for more complicated signups, such as those requiring more than the usual amount of paperwork and supporting info, the double redirect will still be used. Likewise, those applying outside of open enrollment won’t be able to avoid the double redirect when using a broker. Streamlined enrollment is only available during the open enrollment period (November 1 to December 15).
Higher Prices for Some (Plus Penalties)
Premiums will rise nationwide in 2017 thanks primarily to uncertainty over healthcare reform and lack of participation among the young and healthy crowd. Major insurers withdrew early from the marketplaces, leaving few options and smaller insurers to pick up the slack. Because insurance carriers couldn’t count on cost-sharing reduction payments (CSRs), either, or enforcement of the individual mandate under the Trump administration, rates will rise in most places. Inflated premiums won’t impact those who receive tax subsidies on the marketplace, but for some consumers, the cost difference could be substantial.
Along with rising premiums, some consumers could be forced to pay penalty charges for reapplying this year. If you dropped your coverage in 2017 or didn’t pay your monthly premiums, then you may be required to pay back unpaid premiums before signing up for a new policy this year, per a new rule issued by the CMS in April. Insurers can now require enrollees to settle old bills before being granted new coverage. Carriers must follow state law regarding how to handle this particular issue, and it only applies if customers are trying to apply to the same carrier. This rule was designed as an incentive for consumers to stick with their health plans for the year.
New Special Enrollment Rules
In previous years, it’s been relatively easy to apply for a special enrollment period (SEP), which allows you to sign up for health insurance outside of the official open enrollment period for the year. The government wasn’t always strict about requiring supporting documentation, a fact that people used to their advantage. To cut down on fraudulent use of the special enrollment periods, this year consumers will have to jump through more stringent hoops to sign up if they have a qualifying life event.
For starters, if you lose your health insurance because you didn’t pay your premium, it won’t trigger an SEP. You’ll just have to wait until the next open period to enroll. If you do experience a valid qualifying life event (QLE), then you may be subject to a lengthier screening and verification process than you would have before. HealthCare.gov can hold your application until it gets the documentation it needs, and you only have 30 days from when you submit the application to provide the required paperwork.
Furthermore, adding a spouse or dependent to your plan doesn’t let you pick a new plan or carrier entirely. Instead, you’ll have to add the new person(s) to your existing coverage and make changes during open enrollment if necessary.
Greater Flexibility in Actuarial Values
For 2018, insurers have more leeway in actuarial values, which could help consumers when it comes to picking an affordable plan. Under the Affordable Care Act, health plans are sold under four tiers with different actuarial values (the average of how much a plan covers for healthcare): bronze (60%), silver (70%), gold (80%) and platinum (90%). While these percentages represent averages, there isn’t much flexibility under current law, meaning insurers pretty much have to stick with those percentages in setting pricing and coverage for each tier.
A new rule for 2018 allows insurers more flexibility in actuarial value. Silver, gold and platinum plans can have a -4/+2 percent variation while bronze plans can have a -4/+5 variation. In numbers, that means a silver plan could have an actuarial value of between 66 and 72 percent, with the notable exception of the benchmark (second lowest-cost silver) plan, which is used to determine subsidies for those who qualify.
Giving insurers more room to set rates comes with at least one advantage and one potential drawback. On the plus side, consumers will have more options in picking a plan that stays in budget without sacrificing the quality of coverage. On the negative end, this wider variance in actuarial value may make it more difficult for customers to compare different plans. A gold plan with an actuarial value of 76 may not look much different from a silver plan with a value of 72. Enrollees will need to carefully consider the coverage and pricing – not to mention out-of-pocket costs – before signing up in 2018.
Fewer Choices (But Not as Few as You Think)
Earlier this summer, the CMS released a map showing plan availability by county in the U.S., and the news was grim for 47 counties covering 35,000 people. These counties were slated to have zero options on the marketplace due to major insurer withdrawal. As of the time of this writing, those counties now will have at least one insurer option in 2018, and the rest of the country is in better shape for the coming year.
It’s true that there will be fewer options for 2018 than there were in 2017 for much of the country. About 23 percent of exchange customers nationwide – approximately 2.5 million people – will only have one insurer on the Obamacare marketplace while 26 percent will have just two carriers to choose from. Choice will be limited on exchanges for 2018, but it’s not entirely hopeless. Plan options and carrier participation may change over the next month. Insurance companies have until September 27 to decide on whether they’ll participate for next year.
Questionable Penalty Enforcement
President Trump has been clear about his desire to see the whole healthcare industry collapse under the weight of the ACA’s flaws. His administration has not made any assurance to insurers that cost-sharing reduction payments will continue after this year, which is one factor affecting higher premiums in 2018. But even more disconcerting is whether the individual mandate, which requires all eligible Americans to hold health insurance or face a penalty during tax time, will even be enforced this year. The IRS insists that it will be enforcing the mandate despite President Trump’s executive order in January allowing agencies that administer the ACA to waive fiscal burdens on individuals – including the individual mandate.
Despite the fact that the IRS insists it will be upholding the requirement come tax time, many consumers don’t believe that the mandate is in force. And insurers aren’t necessarily buying it either. Lack of clear direction over the mandate has forced some insurers to set higher rates this year in an effort to offset financial losses over people not signing up for coverage. Without the mandate, young and healthy people – those most needed to sign up – may not enroll. Insurers are pricing their offerings accordingly.
The official stance of the IRS is that it will be holding taxpayers accountable for not having coverage. The penalty for not being covered is the greater of 2.5 percent of your household’s taxable income or a flat fee. There are other changes coming for 2018, but these are the most significant in terms of direct impact of affordability, availability and ease of enrollment. Open enrollment for next year begins on November 1 and runs through December 15 for coverage starting January 1.