Open enrollment 2018 started on November 1 and runs through December 15. For anyone without job-based healthcare coverage or a plan through a government program (like Medicare, Medicaid or TRICARE), this is the one time of year when you can shop for health insurance. There are exceptions, of course, for those who experience qualifying life events and need a special enrollment period. But for most people who need private health insurance, the next 45 days offer your only chance to get covered for next year. If that seems like a short window, it is. The Trump administration shortened the usual signup period for 2018 coverage, a move that drew considerable criticism from consumer advocates and plenty of others across the country.
Nevertheless, six weeks is enough time to find and pick a healthcare plan if you know how to get started, what to look for and what your options are for coverage in 2018. There are several ways to get health insurance on and off the Obamacare exchanges. The method you choose will depend on a few factors, including your health status, your income, how often you see a doctor and whether you’ve got dependents who need coverage as well. If you can’t or don’t want to get coverage through your job, and you’re not signed up for a government program like Medicaid, then here are your options for getting private health insurance next year.
Federal and State Marketplaces
The Affordable Care Act (also called the ACA or Obamacare) created health insurance exchanges (i.e., “marketplaces”) to make it easier for people to buy private health insurance because they let you compare different plans all at once. These marketplaces are hosted online. There’s a federal site and individual state sites for states that opted to create their own marketplaces. When people refer to “on-exchange” coverage, they mean the plans that you can buy directly or indirectly from these exchanges. You can sign up for a plan on your own, or health insurance agents or brokers can help you enroll.
The federal exchange located at HealthCare.gov is what most people with marketplace coverage use since 39 states chose not to set up their own exchange sites. HealthCare.gov enrolled about 9.2 million customers in 2017. Of those, 84 percent qualified for cost assistance. The major difference between exchange coverage and off-exchange coverage is that plans sold on federal or state marketplaces might cost less for certain people. That’s because the ACA provided for financial assistance for people who earn between 100 and 400 percent of the federal poverty limit; for those who earn up to 250 percent of the FPL, extra help is available.
We explore the cost of Obamacare in more detail in another article, but suffice it to say that if you earn up to 400 percent of the FPL, you’ll most likely benefit from an on-exchange plan because it’s the only way to get subsidies. And to reiterate, you don’t have to navigate HealthCare.gov on your own to get an on-exchange plan. An agent or broker can help you. It still counts as exchange coverage if you use an agent to enroll as long as you’re signed up for a plan offered on the marketplace.
As mentioned above, some states have created their own marketplaces. The ACA encouraged states to set up individual exchanges, but to date, just 11 states and the District of Columbia have done so. People who live in the following locations will use a state-based exchange to purchase health insurance if they want on-exchange coverage:
- District of Columbia
- New York
- Rhode Island
All exchange plans, whether they’re sold at the federal site or via a state-based marketplace, must be guaranteed issue, meaning you can enroll regardless of your medical history or any pre-existing conditions; cover 10 essential health benefits as outlined by Obamacare, including preventive care, hospitalization and prescription drugs, among others; put a cap on out-of-pocket expenses for the year; eliminate annual and lifetime payout limits; and adhere to all other ACA regulations.
Plans sold on the exchanges vary. There’s not just one option even among the four metal tiers. Where you live heavily influences the types of plans and insurers that you’ll see, especially for 2018. Several large insurance companies, UnitedHealthcare and Humana among them, pulled out of the exchanges nationwide for next year due to financial losses, leaving few options for much of the country. But some people will have several options for coverage. Exchange plans come in a variety of flavors and price points to suit your budget and medical needs. If you don’t like or can’t afford any of them, you’ve got choices outside of the marketplace for private health insurance.
Private Coverage Outside of the Exchange
You might feel overwhelmed if you wade into the waters of off-exchange health insurance. Buying private health insurance has long been a confusing undertaking, even before Obamacare added exchanges to the mix.
First, it’s important to note that “off exchange” isn’t a dirty phrase that refers to questionable coverage. While you may stumble across dubious websites in your quest for health insurance, “off exchange” simply refers to any private plan sold outside of the official government marketplace (state or federal). They’re 100 percent legal as long as you’re buying from a reputable agency, broker or insurance company that’s licensed to sell plans where you live. You’ve got two options for buying health insurance outside the marketplace:
Directly through an insurer
You can visit the website or call the customer service (or sales) line of each health insurer that sells products in your area and shop for health insurance. You might think that’s a tedious, time-consuming approach, and you’re right. For people who live in areas with a bounty of insurers, it’s even more daunting. But some people prefer to go straight to the source, and that’s an option you have if you want to buy off-exchange coverage.
Through a health insurance agent or broker
A less tedious approach would be to work with a health insurance agent or broker, both of whom would be licensed to sell you plans in your state. What’s the difference between an agent and a broker? In a nutshell, agents typically only represent one or two insurance carriers while brokers represent at least two, often many more. Both entities, whether they’re individuals or a company, are licensed to sell you insurance products, and there are benefits to working with one as you try to find coverage for 2018.
The primary benefit is that it’s free help since agents and brokers are paid via the companies they represent. That might also be a downside if you’re working with an agent who’s paid to sell a specific company’s plans. In general, though, it’s worth talking to someone who understands this system and can help you find a plan that fits your needs and budget. You can work with agents and brokers in person, over the phone or through websites (legitimate ones, of course).
If you’ve got questions about an agent or broker’s legitimacy, verify their license using your state’s insurance commissioner website. Here’s a map of where to start from the National Association of Insurance Commissioners.
Similar to agents and brokers but different in specific and important ways are navigators. These are people and organizations created by the ACA to help people sign up for health insurance on the marketplace. They are not usually licensed agents, and they can’t help you find personalized plans, especially if those plans are outside of the exchange. We mention them here just so you know the difference.
There are pros and cons to buying health insurance on the exchange vs. off, a topic that we explore in a more detailed article elsewhere. But it is worth mentioning here that off-exchange products might be better or even cheaper than plans sold on HealthCare.gov or a state marketplace. That’s because while all major medical policies, even ones sold outside of the government marketplaces, must adhere to ACA guidelines, insurers have a bit more flexibility in creating benefits and adjusting pricing outside of the exchange. And in some areas, insurers that have pulled out of the marketplaces for 2018, such as UnitedHealthcare, might still offer off-exchange options for private customers.
Major Medical vs. Other Stuff
We’ve focused our discussion here on options for major medical health insurance. This is “regular” insurance or what most people think of when they think about buying a health plan. Under the Affordable Care Act, most Americans must have qualifying health insurance (a major medical policy) or face a penalty when they file their taxes for the year. In 2017, that penalty was $695 per adult ($347.50 per child) per family or 2.5 percent of a family’s total taxable income, whichever was higher. The penalty for 2018 hasn’t been finalized yet.
Your coverage must be “ACA compliant,” meaning it adheres to the rules of current law (which is Obamacare). If you buy a major medical plan on or off the exchange, and that plan was created after the ACA went into law, then you’ve met the requirement and won’t pay the fee.
But we want to note that major medical coverage isn’t your only option for health insurance. For some, buying a robust and comprehensive healthcare plan is just too expensive. Maybe you think you won’t need it, or you won’t use your coverage enough to justify high premiums and even higher deductibles. There are lots of reasons you might choose to forgo major medical insurance, even with the penalty for not complying with the law. If that’s the case for you but you still want some kind of health insurance to cover unexpected accidents or medical problems, then there are options available, including short-term health insurance as well as:
- Accident and critical illness insurance
- Fixed indemnity or hospital indemnity plans
- Gap insurance
- Health benefit insurance
Collectively, these kinds of products are known as “ancillary” or voluntary benefits because they’re optional add-ons to major medical policies. But you can also buy standalone policies for different things, effectively building the kind of coverage that you want and can afford without having to buy major medical. While none of these policies – separate or bundled – meets the requirement under Obamacare for having qualifying coverage, you may benefit from taking a piecemeal approach to your health insurance.
If you want major medical coverage, you have until December 15 this year to sign up on or off the exchange unless you live in a state that has its own marketplace. For these customers, deadlines vary. You may also qualify for a special enrollment period after the official signup period if you have a baby, lose your job, get married or experience some other major life event. Don’t go through enrollment alone. Learn more about your options and find the right one before the deadline so you can breathe a little easier in 2018.