Over the past few months as the current members of Congress attempted to topple the Affordable Care Act (ACA), Americans wondered what the future of healthcare would be. As it stands now, the ACA remains in place as the Senate was unable to pass legislation that would have completely overhauled the healthcare law. This has placed healthcare on the back burner in Congress, at least for the immediate future.
However, that does not mean that the upcoming open enrollment period will be the same as it was last year. For example, the current administration has proposed opening enrollment on November 1 this year as it has been over the past few years. However, instead of ending at the end of January, this year’s open enrollment will end abruptly on December 15. This means that open enrollment will only be available for 45 days. There are a few other changes that you should be aware of for this year’s enrollment period.
#1 – Streamlined Enrollment With Online Brokers
During the open enrollment period in 2017, many consumers attempted to use an online broker to sign up for health insurance. Unfortunately, a process known as double redirect made using an online broker much more difficult. When you accessed the broker’s website, you would begin the application process only to be directed to HealthCare.gov to verify your income. When the site was busy, the process slowed down considerably. You may not have been able to verify your income at all, but if you did, you were then redirected to the broker’s site to complete the original application. If something went wrong in the process, you may not have been able to complete the application at all. Although calling to verify income was slightly faster, there were still significant wait times. Many consumers simply chose not to enroll because of the cumbersome process.
In late spring this year, the Centers for Medicare & Medicaid Services (CMS) announced that the double redirect had been eliminated for 2018. You will now be able to complete an application and verify income through licensed agents using one website without interacting with HealthCare.gov. Online brokers will now be able to feed your information to the federal site on your behalf.
However, if your healthcare needs or the needs of your household is more complicated, or if you need to submit additional documentation, you will probably be required to engage with Healthcare.gov or a state exchange directly. In addition, the streamlined process is only available within the open enrollment period.
#2 – Higher Prices and Some Penalties
Uncertainty over healthcare reform as well as a lack of participation among the young and healthy customer base has led many insurance companies to raise premiums for the newest open enrollment period. These factors have also led many insurance companies to leave the marketplace altogether. In some areas, there are very few options available for healthcare coverage and many smaller insurance companies are stepping in so that there are more options.
Another factor affecting insurance company participation and premium rates is the possible elimination of cost-sharing reduction payments and the Trump Administration’s decision not to enforce the individual mandate, one of the most hotly contested features of the ACA. If you receive a tax subsidy, you’ll be insulated against high premium rates in 2018. But for those who do not receive such subsidies, increases could be significant.
If you are one of the many consumers who canceled your marketplace insurance policy last year, you could face a penalty from the insurance company if you try to re-enroll through the marketplace this year. This could occur even if you obtained insurance through an employer or other method but failed to notify the marketplace insurance company of your new coverage and simply let your policy lapse due to non-payment. As of this year, your former insurer can require you to pay any past-due premiums before you can enroll through the marketplace again (if you choose the same company). It’s not yet clear how many companies will enforce this allowance or to what extent.
#3 – New Special Enrollment Rules
In an effort to cut down on fraud, the government is requiring anyone enrolling outside of open enrollment to provide supporting documentation that indicates why they should be eligible for a Special Enrollment Period (SEP). Before this year, the government was not strict about documentation and many people used that to their advantage.
To qualify for an SEP, you must experience a qualifying life event, such as job loss or divorce, or if you move outside of an area where your existing coverage is not currently offered. Unlike prior years, you may be required to undergo a lengthy screening process to qualify for the special signup period. If you lost your insurance simply because you did not pay your premium, you do not qualify for an SEP and will have to wait until open enrollment to buy major medical insurance or an Obamacare plan.
Having a child or getting married outside open enrollment allows you to add the new family member to your plan, but you cannot pick a different plan or carrier until the open enrollment period starts for the year. If you have a qualifying life event, HelathCare.gov can hold your application until documentation is provided, and you only have 30 days from when you submit the application to submit the necessary paperwork.
#4 – Actuarial Value Flexibility
Under the ACA, health plans are available in four tiers with different actuarial values. An actuarial value is the average amount the plan covers for your healthcare. Under the ACA, the actuarial values are set at an average, but they hover around these percentages:
- Bronze (60%)
- Silver (70%)
- Gold (80%)
- Platinum (90%)
A new rule in 2018 allows insurance companies more flexibility in determining actuarial values. Silver, gold and platinum plans can have a variation of 4 percent below or 2 percent above their percentage standard, while bronze plans can have a variation of 4 percent below or 5 percent above 60 percent. This means that a silver plan could have an actuarial value of between 66 and 72 percent rather than a set actuarial value. The only exception is the benchmark plan used to determine subsidies for those who qualify. Currently, that is the second lowest-cost silver plan.
The benefit to allowing insurance companies flexibility is two-fold: Consumers will have more options and will be better able to find a plan within their budget. However, the wider range in actuarial values may make it harder for customers to compare plans. A gold plan with a 76 actuarial value may not seem much different than a silver plan with a value of 72, but the differences in coverage and out-of-pocket costs may be significant.
#5 – Fewer Choices on the Exchanges
In June, CMS released a map of plan availability by county indicating that 47 counties in the United States could have no options for healthcare in the marketplace due to major insurer withdrawal. These counties represented just over 35,000 people, and initially there was concern that these consumers would be unable to obtain health insurance at all. Recently, however, it was announced that each of those counties will now have at least one insurer option for 2018 with other areas of the country adding insurers as well to make the news less grim.
Although insurance companies have stepped up to provide coverage, it is true that there will be fewer options in 2018 than there were in 2017. In fact, about 23 percent of the population, or 2.5 million people, will only have one option in the ACA marketplace while 26 percent will have just two. Experts believe these numbers will continue to rise. Insurance companies have until September 27 to decide whether they will participate for 2018.
#6 – Questionable Penalty Enforcement
After Congress was unable to pass a healthcare reform bill, President Trump suggested that the ACA be allowed to collapse under its flaws. The administration has not assured insurance companies that cost-sharing reduction payments, which were part of the ACA, will be continued after this year. This uncertainty has already led to higher premiums for some Americans for 2018. However, one of the most hotly contested features of the ACA, the individual mandate, may not be enforced for the upcoming year as well.
The IRS, which is responsible for collecting penalty payments from those who don’t have health insurance per Obamacare law, has indicated that it will continue to enforce the individual mandate. This is despite an Executive Order signed by President Trump in January that allowed government agencies that administer portions of the ACA to waive fiscal burdens on individual taxpayers, including the individual mandate.
Many consumers are under the impression that the individual mandate has been eliminated, and some insurers are also acting under the assumption that the mandate is no longer in effect. Lack of direction has led many insurers to increase premiums in order to offset losses when young and healthy people do not sign up for coverage. Without the mandate, the target demographic – people who need less healthcare and are therefore less costly to insure – may not enroll, leading insurers to price their plans accordingly.
The IRS insists that it will be upholding the penalty for not having health insurance in 2018. Right now, that penalty is the greater of 2.5 percent of your household’s taxable income or a flat fee, but experts say that this penalty may not be pushed as hard as it would have been under a different administration regardless of what the IRS is claiming. It’s important to keep in mind, however, that the law still requires you to have health insurance, and you may face a penalty for not having it if you choose to skip this year.
Although other changes may be implemented before open enrollment begins November 1, these are the changes that will have the most impact on a large number of Americans. With enrollment right around the corner, it’s time to start thinking about your healthcare needs to make sure you’re covered for next year.