For consumers who took advantage of the federal or state marketplaces to buy health insurance in 2014, new estimates suggest that switching plans during the open enrollment period this year will help decrease the cost of insurance in 2015. According to officials with the federal exchange, approximately 70 percent of enrollees who shop around for insurance will find cheaper plans, and about 80 percent of consumers who use the federal marketplace will pay less than $100 per month with subsidies. The Obama administration has also urged enrollees to take a closer look at their insurance for next year to avoid lower subsidies and higher premiums.
It's expected that approximately 9.1 million people will enroll in a health insurance plan by the time open enrollment ends in February 2015. According to the U.S. Department of Health & Human Services, enrollment numbers for the first two weeks of Obamacare appear promising:
- New consumers account for about 48 percent of the total enrollments from Nov. 15 through Nov. 28 while returning customers make up 52 percent.
- Just over 1.5 million applications have been submitted to the federal marketplace so far this season.
- The HealthCare.gov website has received about 5.4 million users in the first two weeks alone; consumers using the "window shopping" feature of the website number just under 2.2 million. The window-shopping feature allows consumers to browse plans and quotes before they buy.
These numbers suggest that more consumers are educating themselves on their rights and responsibilities under the Affordable Care Act while taking action to buy affordable health insurance. However, some experts are concerned that consumers aren't paying enough attention to rate increases for 2015. According to The New York Times, only 6 percent of people with health insurance plans in place when open enrollment began have made any effort to modify or review their coverage for next year.
For people who purchase a health insurance plan through the state or federal marketplace, the deadline for open enrollment is Feb. 15, 2015. However, the date for making changes before next year starts is Dec. 15. By this date, plans will be renewed automatically for people who take no action beforehand. Enrollees can always make changes up until open enrollment ends, but they may experience a delay in the start date of their coverage.
Better Options on the Marketplace
The upside to this year's enrollment for many consumers is that more options will be available. In fact, approximately 90 percent of consumers who use the federal marketplace will have at least three insurers to choose from this year. During open enrollment last year, only 74 percent enjoyed similar choices. Unfortunately, the downside is that subsidies have been reduced in part thanks to greater competition among insurers. While competition helps drive down costs, more diverse options decrease the amount that federal subsidies will cover based on the cost of a silver-level plan on the marketplace.
Silver plans serve as the benchmark for calculating subsidies on the marketplace. In 2014, approximately 67 percent of enrollees had silver plans, which cover 70 percent of eligible medical costs. Health insurance officials suggest that the average consumer will save almost $500 by switching to a new silver plan this year.
Increased Premiums for 2015
Not everyone will see premium increases in 2015, but it's not uncommon in the insurance industry for consumers to face hefty rate hikes on an annual basis. Prior to Obamacare, insurance companies announced premium increases well above 10 percent to the privately insured. Experts with organizations such as the Centers for Medicare & Medicaid Services indicate that people who keep their existing plans will see only low to moderate increases.
Price increases depend primarily on geography. As a whole, the United States has seen a shift toward lower growth when it comes to healthcare spending. In 2013, spending on healthcare services grew by just 3.6 percent. Individual states will see different premium increases, and some areas may even experience lower rates thanks to the competition introduced by a higher number of participating insurers on the marketplace.
Enrollment numbers have declined somewhat since the boom of the first week of open enrollment 2015, but experts suggest that enrollment will pick back up before the Dec. 15 deadline for coverage beginning Jan. 1. Already, the numbers are an encouraging indicator for many health insurance officials that the system is working and that more Americans have been taking advantage of affordable insurance.
Consumers who choose to keep their existing plans may see premium increases or reduced subsidy allotments, but these price adjustments could be much lower than traditionally seen. Federal officials and health insurance experts alike encourage people to review their existing policies for better and more affordable options before the deadline hits.