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Open enrollment 2018: Answers to five key questions

Open enrollment for 2018 health plans is over. Unless you qualify for a special enrollment period, you are unable to obtain an individual insurance policy until open enrollment begins in November 2018 for 2019 coverage.

Open enrollment for Affordable Care Act (ACA) plans run from Nov. 1-Dec. 15, 2017, for 2018 health plans.

OpenEnrollment4The ACA individual health insurance open enrollment period was once three months, but the Trump Administration cut the period in half for 2018 plans, so you don't want to wait this year and lose out on getting health insurance.

The federal government’s rule gives people shopping for 2018 individual health coverage on the federal exchange, or directly with insurers, 45 days to sign up. However, some states that operate their own exchanges, and California, are extending the time that people have to buy health insurance for themselves. Currently, those states are:

  • California – Nov. 1 to Jan. 31
  • Colorado – Nov. 1 to Jan. 12
  • D.C. – Nov. 1 to Jan. 31
  • Massachusetts – Nov. 1 to Jan. 31
  • Minnesota – Nov. 1 to Jan. 14
  • Washington – Nov. 1 to Jan. 15

As part of the ACA, also called Obamacare, you need to have health insurance to avoid getting penalized at tax time.

If you're not covered through your employer, your employer's spouse or another way like Medicare or Medicaid, you can get an individual health plan through the ACA exchanges or buying directly with health insurance providers to cover you and your family.

Here's what you need to know about open enrollment:

What do health plans cover?

There was a time not too long ago when low-cost health insurance plans offered limited coverage. However, ACA required health insurance plans must cover essential health benefits, including:

  • Outpatient care
  • Chronic disease management
  • Emergency care
  • Hospitalization
  • Pregnancy and newborn care
  • Mental health and substance abuse services
  • Prescription drugs
  • Rehabilitation services
  • Lab tests
  • Preventive and wellness services
  • Dental and vision care for children

The plans offer more protection for you and your family, but with that additional coverage usually comes a higher price tag than what you would have paid for health insurance just a few years ago when insurers could offer plans with limited benefits.

All health plans must now offer the essential health benefits. Beyond that, health insurers' plans vary greatly based on premiums, out-of-pocket costs, deductibles and provider networks. You can find out the specifics about each plan offered by reviewing the Summary of Benefits and Coverage on each plan's website or your ACA marketplace may provide side-by-side comparisons.

What can you do during open enrollment?

You can keep your current health insurance plan or choose a new plan through the ACA exchanges or with a health insurance provider directly.

If you're enrolled in a marketplace plan, it will automatically renew, but you still want to research plan to see if the insurance company made any changes to the provider network and out-of-pocket costs like copays and deductibles. It's a good idea to review that information to make sure your plan still makes sense for you and that your providers are still part of the plan.

ACA plans are divided into four types: Bronze, Silver, Gold, and Platinum. Bronze plans have the highest out-of-pocket costs and the lowest premiums, so you can think of them kind of like high-deductible health plans that have become so common for employer-based health insurance. Platinum has the lowest out-of-pocket costs, but also higher premiums. A good way to look at it is the higher premiums you pay, the lower you'll have to spend on out-of-pocket costs during the year.

Health insurance is one of the most important purchases you make, so spend the time to review your options and pick the right plan for you and your situation.

Think about the past few years of your healthcare services, as well as the healthcare provided to your spouse and family. Then, think about the year ahead.

Some things to think about?

  • Do you regularly visit your provider for a chronic illness?

  • Have you been dealing with occasional health issues that may require more healthcare services?

  • Do you take costly prescription drugs?

  • Do you plan on starting a family in the next year?

  • Do you have enough money set aside to pay for potentially high deductibles?

That all goes into what's the best plan to choose for your situation. Generally, higher premium/lower out-of-pocket costs like Platinum plans could make more sense if you expect to need healthcare services. However, if you're young and healthy and would rather pay more for using healthcare services than paying a higher monthly premium, then a Bronze plan could be right for you.

It's critical that you give this much thought because you won't be able to change the plan again for a year.

Is open enrollment the same for other types of health insurance plans?

Open enrollment for ACA plans and individual health plans is Nov. 1-Dec. 15, but it's different for other type of health plans.

For instance, if you are covered by your employer, you will likely have a different open enrollment period. There is no standard open enrollment period for businesses. They choose their own. Many are in the fall or winter, but yours may be in the spring. Check with your employer's benefits department to find out your open enrollment.

If you're in Medicare, your open enrollment is Oct. 15 to Dec. 7, 2017. During open enrollment for Medicare, you can keep the same coverage, change Medicare Advantage or Part D prescription drug plans, switch Medicare Advantage plans, or even swap from Medicare to a Medicare Advantage plan.

For those who qualify for Medicaid or the Children's Health Insurance Program, there is no open enrollment period. Instead, you can enroll at any time of the year.

What if you miss the open enrollment period?

If you don't sign up or don't make changes during open enrollment, you won't be eligible to switch plans for a year unless you qualify for a special enrollment. Some events that trigger a special enrollment is if you get divorced, married, have a child, adopt a child, your spouse dies, your spouse loses a job or even if you are in an HMO and you move outside its coverage area.

How much are the penalties for not having insurance?

The government has been penalizing Americans without insurance during tax time since the ACA took effect. In 2017, the penalty was 2.5% of your income or $695 per adult, whichever is more, and a $347.50 penalty for each child in a family without health insurance coverage. The maximum is $2,085.

However, things may change for 2018. The Republican-led Congress has proposed ending the individual mandate that includes the penalties for not having insurance. So, we'll have to see what happens for 2018. If the penalty remains, you can expect it to stay at 2.5% of your income, but the other dollar amount might increase slightly.

Open enrollment for ACA and individual insurance health plans isn't as long as previous years, so it's important to sign up or make changes during the six-week period. If you are eligible for subsidies, a good place to start is HealthCare.gov, which will take you through the process of getting or changing your ACA health insurance plan. Otherwise, find out about the best health insurance companies and comparison shop for your health insurance plan.

ACA open enrollment: What's changed and what hasn't after Trump cost-sharing reduction announcement

President Donald Trump recently announced that he will no longer pay cost-sharing reduction (CSR) payments to insurers in the Affordable Care Act (ACA) exchanges.

The CSR payments total about $7.2 billion annually. They help keep down out-of-pocket costs for about 7.5 million Americans with incomes less than 250 percent of the federal poverty level.

Premiums on ACA plans were already averaging 20 percent in 2018, but insurance companies are increasing premiums even more without CSR payments. Without the payments, insurers may also abandon the ACA exchanges and leave some Americans without an ACA plan choice in either 2018 or 2019.

Trump's announcement comes as millions of people in ACA exchanges plans head into open enrollment on Nov. 1. The Trump Administration cut open enrollment in half this year. It usually runs through the end of January, but open enrollment for the ACA exchanges is only Nov. 1-Dec. 15 this year. Plus, the administration cut marketing for ACA plans by 90%. Insurers and ACA advocates worry that the Trump Administration’s moves will reduce enrollment and create unbalanced risk pools, which will mean higher premiums. 

What does the CSR announcement mean for open enrollment?

Trump's announcement doesn't affect open enrollment. It still runs from Nov. 1-Dec. 15.

Losing CSR payments may also not change the plan offerings. Insurance companies already signed on and set their premium increases for 2018.

However, some insurers could argue that losing CSR payments allows them to get out of the 2018 contracts. In that case, they could try to leave, but states may still stop them from leaving.

Even if all insurers stay, members may see higher than expected premiums in 2018. Insurers need to comply with an ACA provision that requires them to keep down out-of-pocket costs for lower-income members. CSR payments helped insurers do just that. Insurance companies will now need to figure out a way to fill the funding gap. One way is to increase premiums.

A recent report by Avalere found that premiums for ACA “silver” plans will increase an average of 34% in 2018. Silver plans are the most popular plans in the ACA exchanges and insurance companies have proposed large premium increase for those plans. Insurers are implementing such huge premium increases on silver plans that people shopping for ACA plans may find more affordable “gold” plans once you take into account ACA tax credits. In other words, make sure to shop around for plans in different “metal” levels.  

Trump's announcement wasn't exactly a surprise. Many insurance companies included the possibility of the president stopping CSR payments in their proposed increases for 2018.

One state, Oregon,  even suggested that payers increase their proposed rates on silver plans  by another 7.1 percentage points in 2018 to help offset the loss of CSR payments.

However, insurers that set rates expecting CSR funding may request to revise premiums for 2018. One state, Oregon, is even suggesting that payers increase their proposed rates on Silver Plans, which is the most popular plan option in the exchanges, by another 7.1 percentage points in 2018 to help offset the loss of CSR payments.

So, even if you have ACA plan options, you may see higher premiums than expected.

In one bit of good news, healthcare.gov now organizes plans based on your monthly premium after you account for tax credits and subsidies. This means shopping on heatlhcare.gov is more consumer-friendly than before and it’s easier to comparison shop.  

Tax credits may help buffer CSR payment loss

For most people in ACA plans, higher premiums will get swallowed up by tax credits. The ACA offers a premium tax credit for members in ACA plans. Those credits help members between 100 and 400 percent of the federal poverty level reduce premiums or out-of-pocket costs. More than 80 percent of ACA plan members are eligible for the tax credit.

What this means is that premium tax credits may offset premium increases for those who qualify. However, the tax credits won't help many middle class and upper-middle class members who don't qualify for the tax credit. They will face higher premiums and feel the brunt of the CSR payment cuts and subsequent premium increases.

What happens now?

The CSR payment issue is now in two different places -- Capitol Hill and the courts. Eighteen states and the District of Columbia sued because of Trump's CSR decision, but a federal judge ruled that Trump does not have to make the CSR payments. Insurance companies may also sue for the payments.

Congress is hoping to resolve the issue with legislation to continue CSR payments for two years. Senators were already talking about a possible bipartisan solution in September. Senators Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington) were working on a plan for Congress to appropriate the money for the CSR payments through 2019.

This would have taken the payment issue away from the president, guaranteed insurer payments and stabilized the market somewhat. However, Republican leaders set aside that proposal and instead decided on pushing a large healthcare reform bill that would have repealed the ACA. That proposal failed to gain enough support, and now we're back to a possible bipartisan solution.

The Congressional Budget Office estimated the bipartisan plan would reduce the deficit by $3.8 billion over 10 years and not affect coverage premiums.

In addition to the Alexander-Murray plan, Republicans are proposing more conservative CSR bills that could include expanding Health Savings Accounts and delaying the employer mandate to offer health insurance.

There are still questions as to whether the Republican-led Congress can garner enough support for CSR payments. Congress may not take up the issue until December and could include it among other bills in a final end-of-year spree.

If Congress doesn’t pass CSR legislation, states may forge lengthy legal battles to get the federal government to pay. Some states may even try to make the payments in the interim in hopes of getting repaid later. Until all of these issues are resolved, the ACA exchanges will remain teetering, and insurers will discuss internally whether the business is worth it. Stay tuned

-- by Les Masterson

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