What to Know About ACA Open Enrollment

Open enrollment for individual health policies is coming up, and significant changes will affect those applying for or altering coverage.

Open enrollment for individual health insurance policies is coming up. It is important to be aware of significant changes that will affect those applying for new coverage or changing coverage. Being familiar with these changes will help you successfully keep your health insurance and enroll. Since January, there have been multiple attempts to formally repeal the Affordable Care Act, which all ultimately failed in the Senate. Unfortunately, there is a clear trend that steps are being taken to weaken the ACA. The Affordable Care Act remains in place. Any claims that the ACA or Obamacare are failing or dead are not true. Due to the hard work of multiple state insurance commissioners, as 2018 Obamacare deadline nears, U.S. states believe every county is covered. There is no further pretense: It is Trump vs. the Affordable Care Act. Failing to work with Congress, Trump has through executive actions and the announcement to terminate the payment of cost-sharing subsidies, thrown the entire health insurance ecosystem into greater chaos. The termination of the cost-sharing subsidies is a short-term issue while the executive actions are slightly longer-term. These actions will cause further instability in the health insurance marketplace as it is almost certain that fewer people will enroll in health insurance plans this year. The reduction will mostly come from younger, healthier people, which will lead to a pool of people who have health issues and will have higher claims. Higher claims mean higher premiums. And higher premiums will lead to fewer enrollees leading to a tougher, but not failing market. Michael Che of Saturday Live summed it up accurately with the comparison of Trump tweeting: “The Democrats ObamaCare is imploding. Dems should call me to fix” to Godzilla tweeting: “Tokyo is totally imploding right now. I alone can solve!” Here’s what you need to know about the termination of the cost-sharing subsidies: Insurance companies must continue to offer policies with subsidized premiums to those who qualify (58% of the 11.1 million Americans enrolled in ACA plans). The ACA requires insurers to charge lower out-of-pocket costs to low-income consumers, and the CSR payments compensate insurance companies for doing so. So, CSR payments are not a bail-out for insurance companies. And insurance companies are suing the government to make these legally obligated payments. Insurers have already filed their premium rates for 2018. Insurance companies can still attempt to raise rates or even pull out of some markets. The loss of the CSRs is a huge cost for any insurance company that didn’t price in the possibility of the CSRs being eliminated. However, given that Trump has consistently threatened to not make the CSR payments, insurance companies have for the most part taken this into account; in other words, they were not surprised. Insurance companies can terminate their contact with the federal exchange if cost-sharing reductions are terminated. However, they are still subject to state laws on withdrawing from the marketplace. They can only terminate their exchange enrollees if they fail to pay their premiums, which many people would likely do if an insurance company left the exchange and they no longer received the advance premium tax credit (APTC). A number of states allowed insurance companies to file dual rates, with one set assuming CSRs and the other set assuming no CSRs. Some states had already ordered insurance companies to add a surcharge to cover the potential loss of CSRs. For example, California required an additional 12.4% surcharge on silver plans. To find out how your state is allowing insurance companies to deal with the uncertainty over cost sharing reductions, check out this compilation of data. In fact, Trump’s action would lead to an increase in enrollments in ACA plans in many states, including California, where about 90% of enrollees pay subsidized premiums. Covered California, the state’s Obamacare exchange, calculated in January that the reduction in net, or after-subsidy, premiums in gold, platinum and bronze plans resulting from the higher subsidies would lead to an enrollment increase of 20,000 people, or 1.4%, in subsidized plans. That’s good. What’s not so good is that the change would batter the unsubsidized population — those with income higher than 400% of the poverty level. Bottom line, insurance companies will get less money from the government for helping low-income people with out-of-pocket costs on silver plans, causing silver plan premiums to increase to compensate. That will then trigger the federal government to increase all APTC-based subsidies to make sure people can still afford insurance. And to take advantage of the ATPC and avoid the higher-priced silver plans, people will move to bronze, gold and platinum plans. In fact, Trump's health subsidy shutdown could lead to free insurance. See also: How to Save Individual ACA Market   According to a report by the Congressional Budget Office released in August, “The Effects of Terminating Payments for Cost-Sharing Reductions,” this will result in about 1 million fewer people covered in 2018. However, by 2020, the effect on coverage would stem primarily from the increases in premium tax credits, which would make purchasing non-group insurance more attractive for some people. As a result, a larger number of people would purchase insurance through the marketplaces, and a smaller number of people would purchase employment-based health insurance. The CBO report does not take into account the other changes made by Trump and his administration. Here’s what you need to know about open enrollment: Increased tax credits for those who qualify (84% of enrolled): The ACA includes an additional subsidy that is designed to reduce the cost of premiums, ensuring that family budgets are largely unaffected — it's called the Advance Premium Tax Credit. CSR payments are applied only to silver plans. Insurance companies will add a premium surcharge, then, to the silver plans. Silver plans are the basis for the amount of the APTC that consumers receive. So, for most consumers, an increase in the silver premium will be offset by an increase in the APTC. Because of the application of the CSR linked premium surcharge to silver-tier plans, nearly four of five consumers will actually see their premiums remain the same or decrease as the amount of premium assistance they receive will rise. To qualify for the APTC, your income must be between 133% and 400% of the federal poverty level. The premium increase impact will be heaviest on those who do not qualify for Advanced Premium Tax Credits. Because more people qualify for APTCs, the net cost to the federal government will actually rise. Find out if you qualify for the APTC here. If you are in one of 19 states that did not expand Medicare, your premiums will be higher because there will be a larger number of enrolled who qualified for the CSRs. This will be offset by higher Advanced Premium Tax Credits. Increased premiums for those in silver plans in 2018: Silver plans are the only plans that qualify for cost-sharing subsidies. Without the CSRs, silver plans may no longer be the best choice for many people. The individual mandate remains in place, and there is a minimum penalty ($695 for adults and of $347.60 for children under age 18) for not having health insurance. The maximum tax penalty is $2,085 per household. The IRS has announced that it will not accept a return that does not have the health coverage question completed. There will be a shorter open-enrollment period of six weeks, rather than the 12 weeks in previous years. Open enrollment starts on November 2017 and ends on December 15, 2017. It is important to act quickly and to be aware of this much-earlier deadline. Open enrollment is the only time when you are able to change to a completely new plan on the public marketplace or switch cover tiers, with changes taking effect on January 1. There are special enrollment periods for those who meet certain criteria, such as losing group health insurance coverage. Certain state exchanges have longer open enrollment periods:
  • California: runs through January 15, 2018
  • Colorado: runs through January 12, 2018
  • District of Columbia: runs through January 31, 2018
  • Massachusetts: runs through January 23, 2018
  • Minnesota: runs through January 14, 2018
  • Rhode Island: runs through December 31, 2018
  • Washington: runs through January 15, 2018
Note: Insurance companies were in favor of this because the hope is it will encourage healthier people to enter the risk pool. This was also a recommendation in my Health Insurance Roadmap in conjunction with limiting special enrollment periods, which encourages people to keep their policies throughout the year (and keep their paying premiums) rather than hopping in and out of the risk pool. Reduced access to healthcare.gov: HHS has announced it will shut down the federal exchange site for 12 hours for all but one Sunday during the open-enrollment season (December 10) as well as on the first day of open enrollment (November 1). More than 36 states use healthcare.gov for their marketplace.
  • HHS has reconfigured its website to make enrollment information harder to access.
  • This limited access could have a secondary impact because of additional website outages with greater numbers of people using the site at one time, compounded by the shorter enrollment period.
  • Website key point: More than 12 million people enrolled on the state and federal marketplaces for 2017 coverage — with nine million of those enrollments being on the federal exchange.
Marketplace outreach funds have been significantly reduced by 90% (from $100 million to 10 million). Budgets have been restricted to mostly being online — so no television, radio or print ads. So don’t wait for any advertising for healthcare.gov .
  • Earlier this year, the administration pulled paid advertising for sign-ups on HealthCare.gov.
  • HHS has, instead, produced videos designed to undermine public support for “Obamacare” with funds that were intended to help promote enrollment in the ACA. These “testimonial videos” feature individuals claiming to have been harmed by the ACA.
  • These actions have prompted an inquiry by a federal inspector general into these decisions and regarding whether they have had a negative impact on sign-ups.
Less help with open enrollment, cuts of 90% to navigators — this reduces the ability to get advice to review different plans. For the most recent open enrollment period at the end of 2016, navigators received over $62.5 million in federal grants while enrolling 81,426 individuals for an approximate cost per enrollee of $768. For this open enrollment period, CMS plans to spend $10 million on education activities. (Source: CMS Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period.) Funding for in-person outreach has also been cut in half, from $62.5 million to $36 million. The Trump administration has ended contracts with firms that have provided in-person assistance to states using healthcare.gov. Regional representatives from the HHS will not be participating in open enrollment events in states and with health advocacy groups as it had done in the past so to reach uninsured populations by helping with sign-ups in terms of explaining, enrolling and shopping. Here’s what HHS press secretary Caitlin Oakley had to say last month: “Marketplace enrollment events are organized and implemented by outside groups with their own agendas, not HHS. These events may continue regardless of HHS participation.” She went on to say, “As Obamacare continues to collapse, HHS is carefully evaluating how we can best serve the American people who continue to be harmed by Obamacare’s failures.” Navigators from multiple states are reporting issues with the online training certification videos. See also: 10 Ideas That Could Fix Healthcare   According to Sheila Quenga, director of the Palmetto Project, software programs are occurring more frequently than in the past, and it can take weeks before CMS resolves an issue. This is the Latest Snag In ACA Sign-Ups: Those Who Guide Consumers Are Hitting Roadblocks. What to consider when reviewing your options:
  • If you are getting a subsidy, it is recommended that you review alternatives on healthcare.gov or your state health insurance exchange.
  • Find out if you qualify for the APTC here.
  • Review the total costs of premiums and deductibles and estimate co-payments and coinsurance.
  • Make sure the plan covers your medical providers and medications.
  • Use the optimal insurance deductible calculator to find the deductible that provides the most value to you.
Here are some resources to help you with open enrollment:
  • healthcare.gov — Check it out before open enrollment to review your options so you can be prepared.
  • State insurance departments. Find a link your state insurance department here.
  • Private groups, consumer advocacy groups and insurance companies. For example, a new campaign, “Get America Covered,” is going to run digital advertising and will partner with employers, community organizations and other entities. Its staff and co-chairs draw heavily from people who worked on ACA enrollment in the Obama administration's HHS. The campaign draws on a mix of health-policy wonks, celebrities and political figures: Democratic activist Van Jones, actress Alyssa Milano, actor Bradley Whitford, ousted health insurance CEO Mario Molina and former Obama health care official Andy Slavitt. Other advocacy groups include Out2Enroll, Young Invincibles, Community Catalyst and the Get Covered Coalition. Unfortunately, HHS is the only entity that has access to records of who’s insured, so the lack of data will lessen the impact.
  • PolicyGenius has put together the comprehensive “Your state-by-state guide to the 2018 health insurance open enrollment period.”
If you have group health insurance through your employer, be aware of your open enrollment period and options. What’s next? The best outcome is that this might finally spur a true bipartisan effort. Trump’s actions can be remedied by Congress acting to guarantee funding the cost-sharing subsidies. And while a bipartisan deal, the “Bipartisan Health Care Stabilization Act,” has been reached by Senators Lamar Alexander and Patty Murray, President Trump has repeatedly switched from supporting it to not supporting it. The other question is whether Senate Majority Leader Mitch McConnell will do the right thing and put this deal up for a Senate vote, with the speculation being that he won’t. Currently, the bill has 22 additional co-sponsors (11 Republicans and 11 Democrats), so it seems feasible that it could actually pass in the Senate. Then the question becomes getting the bill through the House, where Speaker Paul Ryan has come out against it and may not let it be put to a vote. House members have already approved an Affordable Care Act change bill, H.R. 1628, that would continue funding for the cost-sharing reduction subsidy program for two years. The other likely scenario is that with budget talks coming up, an Obamacare fix could end up in year-end package. Either way, this would not remedy any cost-sharing subsidies not paid and may come too late for insurance companies to change their 2018 premiums. So, please start early and be prepared. As you should always do with any type of insurance, it’s important to understand what your health insurance options are and obtain coverage accordingly. To get the best plan at the optimal price, shop and compare the different tiers. The bottom line to get the best plan at the best price: shop and compare all plans, even if you currently have a policy.

Tony Steuer

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Tony Steuer

Tony Steuer connects consumers and insurance agents by providing "Insurance Literacy Answers You Can Trust." Steuer is a recognized authority on life, disability and long-term care insurance literacy and is the founder of the Insurance Literacy Institute and the Insurance Quality Mark and has recently created a best practices standard for insurance agents: the Insurance Consumer Bill of Rights.


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