Open enrollment for the Affordable Care Act (ACA) ends Friday, December 15. This is the only time during the year that you can purchase or change your major medical insurance unless you experience a qualifying life event, like a significant death in the family or the birth of a child. The purpose of open enrollment is to prevent you from buying health insurance only when you get sick, which can drive up the cost of care. Here are some things to keep in mind as enrollment wraps up for the year.
Shorter Enrollment Period
The enrollment period for 2018 coverage is shorter than it has been in previous years. Last year, open enrollment lasted for three months, but this year, the Trump administration reduced the length of time you had to enroll to just 45 days, from November 1 through December 15. In an effort to assist residents, nine states have extended the open enrollment period for their state-operated exchanges. The states and their enrollment deadlines include:
- California (January 31)
- Colorado (January 12)
- Connecticut (December 22)
- District of Columbia (January 31)
- Massachusetts (January 23)
- Minnesota (January 14)
- New York (January 31)
- Rhode Island (December 31)
- Washington (January 15)
This means that if you are resident of these states, you have longer to change or sign up for health insurance under the ACA. Residents of hurricane-affected states, such as Florida and Texas, will also have extra time to sign up for health insurance this year. If you live in an area that was devastated by hurricanes earlier this fall, then you’ll need to call the marketplace call center for information on the extended deadline of December 31.
Penalties Still in Force
Many people are under the mistaken belief that the individual mandate that requires you to have health insurance or face an income tax penalty has been eliminated. Although President Trump signed an executive order that allows government agencies to relax regulations related to collecting the penalty, including leniency when taxpayers claim hardship related to the ACA, the law is still in place, and so is the fine.
In December 2017, the Senate passed a tax reform bill that would eliminate the individual mandate, but that will not take effect until 2019 if it’s adopted as is. This means that you are still required to have health insurance or face a tax penalty of $695 per adult or 2.5 percent of your income, whichever is higher. Congress hopes to have the bill ready for President Trump’s signature by Christmas.
Another reason to sign up for health insurance under the ACA before the deadline is that there could be significant changes to the law for 2019. During the presidential campaign last year, many Republicans were elected on a platform that promised to either completely repeal the law and replace it with a better version or to fix problems with the ACA that were causing premiums, deductibles and co-payments to rise. Several bills have been proposed in Congress, but none have been successful. For this reason, Republicans have suggested using the new tax reform bill to end certain portions of the ACA under the Senate’s reconciliation rules. Experts believe that eliminating the individual mandate will drive up premiums that will keep healthy people, whose premiums help offset the cost of care for people with pre-existing conditions – and who don’t want to purchase health insurance in the first place – from buying policies.
Elimination of Cost-Sharing Payments
In October, President Trump suspended federal cost-sharing payments for insurers. These payments reimburse insurance companies so that they can lower co-payments and deductibles for lower-income families. Anyone earning up to 250 percent of the federal poverty level qualifies for additional cost-sharing reductions, which are still in effect. The problem is that now insurers can’t be reimbursed for lowering out-of-pocket costs, like copayments and deductibles. In other words, insurers stand to lose money.
As a result, premiums for silver-level plans in particular have skyrocketed this year, leaving plenty of Americans with a tough choice to make on buying health insurance. But there are still affordable options in other metal tiers, specifically gold plans, which provide better coverage. Premiums will likely continue to rise next year since insurers can’t count on those cost-sharing reduction payments from the government, so now’s the time to check out your options.
Changes to 2019 Marketplace Rules
In November 2017, the Trump administration issued its proposed “Notice of Benefits and Payment Parameters,” rules that are issued each year to set standards for insurance policies sold under the ACA. The new rules loosen restrictions regarding the essential health benefits included under the ACA and gives states latitude in what essential health benefits must be included. The rule also eliminates a requirement that each state have two “Navigator” entities, people who are available to assist any individual who may not understand the ACA.
The proposed rule also reduces accountability requirements for insurers and makes it less likely that insurers will prominently display “simple plans,” plans that offer flat copayments for doctor visits and generic drugs, but charge higher fees for other types of services. These new rules could mean that basic benefits available under the ACA in 2018 may not be as readily available in 2019, another reason to sign up for healthcare during the open enrollment period for next year.
There has been much talk of higher premiums for coverage under the ACA for 2018. In some cases, this is true due to the elimination of the cost-sharing reduction payments as described above. In some areas of the country, there may be fewer insurers, which can also drive up premium prices. Nationally, the lowest cost bronze plan is expected to increase by 17 percent, the lowest cost silver plan by 32 percent and the lowest cost gold plan by 18 percent. However, the subsidies that are still in place could lower premiums significantly. A 40-year old person making $35,000, which is 249 percent of the federal poverty level, will pay 36 percent less for the lowest cost bronze plan, 6 percent less for the lowest cost silver plan and 12 percent less than the lowest cost gold plan.
This indicates that although some premiums may increase, many will actually decrease in 2018. Plus, tax subsidies to reduce premiums rise along with the higher premiums, so if you qualify for cost assistance – anyone earning up to 400 percent of the federal poverty level qualifies – then check out your options for next year.
If you don’t sign up for coverage before December 15 or if you don’t make necessary changes by that date, you won’t be able to make the changes or sign up until the next enrollment period. The only exceptions are for life-changing events, like loss of job, a marriage, divorce or a big move. In addition, you will face an IRS penalty at the end of the year when you file your taxes if you can’t prove that you had coverage. Signing up for health insurance is the best way to avoid the IRS penalty and make sure your family is protected for next year.