Compared to last year, the health insurance open enrollment period this year is:
- Has fewer plans available, in most areas
- Will be more expensive-much more expensive for many areas
With health care expenses rising, health insurance is more important than ever. But many factors make insurance premiums costlier, with consumers paying greater out-of-pocket expenses. And with fewer health insurance plans available and fewer insurance companies in many areas, it will be a more difficult decision this year.
If you are among the budget-minded families who are weighing whether to be insured vs. not being insured, you should take a look at Think You Can’t Afford Health Insurance? It’s Time to Think Again.
Short Term Health Insurance an Affordable Option for Many
Unaffordability of plans will lead to more Americans moving to alternatives like short term health insurance. If the lowest cost Marketplace plan available in 2018 is more than 8.05 percent of a family’s household income (it was 8.16 percent for 2017), according to the individual mandate in the Affordable Care Act (ACA), the family is most likely exempt from paying a tax penalty if they forgo buying health insurance on the federal or state exchange.
In 2018, it is expected that more consumers than ever will be in this “unaffordable” category. These people will be looking for affordable coverage to meet their family needs and their budgets.
One good choice is short term health insurance, also known as temporary health insurance, which costs about 50 percent less than ACA coverage. These affordable plans offer a range of deductibles. They are currently limited to 90 days of coverage, but some companies like Pivot Health offer four back-to-back coverage terms with one application, providing coverage for almost an entire year. That’s good news for healthy individuals with no pre-existing conditions since there are some health questions to answer in the insurance application for this coverage. Some short term plans have doctor copays and prescription drug coverage for a slightly higher cost. As always, it’s smart to read all of the plan details before selecting an insurance plan.
Changes to Obamacare in 2018
A lot remains the same for this year’s ACA open enrollment period.
As in the past, you can only sign up for health insurance on your state’s health insurance exchange or individual marketplace during the annual Open Enrollment period, unless you have a “qualifying life event,” such as getting married or having a baby. If you miss Open Enrollment, you must wait until the next year’s Open Enrollment period to sign up.
Consumers still have four levels of choices: Bronze (lowest premiums, highest out-of-pocket expenses), Silver, Gold, and Platinum (highest premiums, lowest out-of-pocket expenses.) Read on to find out about big changes to the Silver plan.
And a lot has changed this year. This is the shortest open enrollment period since the ACA-or Obamacare-first launched. There are fewer plans available, especially in rural counties, there are higher premium costs on Silver plans, and the White House slashed the marketing budget to let people know about the dates.
Last Minute Shopper Alert!
This year’s consumers looking at health insurance options will have only 45 days, from November 1 to December 15, for open enrollment on the federal exchange. This is the shortest enrollment period since Obamacare insurance plans took effect on January 1, 2014. Last year, consumers had a hefty three months to enroll. While some states/jurisdictions (California, Colorado, Connecticut, District of Columbia, Idaho, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New York, Rhode Island, Utah, Vermont and Washington) run their own exchanges and can extend the sign-up period, most will stick to this timeline.
Consumers also need to bear in mind that Healthcare.gov-the government website where they can find trained assisters, brokers, insurance agents, and nonprofits to help enroll in a marketplace plan is going to be shut down for 12 hours on most Sundays throughout this period.
With 20 million people shopping for health insurance during the Open Enrollment Period, the last-minute rush will be even busier than usual. New consumers need to enroll early. Returning consumers need to shop early if they want a different plan, or they will be enrolled automatically in the same plan or a similar one if that one is no longer available. Something else to keep in mind: this year’s participants won’t be able to switch to another policy after the enrollment period ends.
Fewer Insurers, Few Options
There are fewer plans available for the ACA’s healthcare buyers, especially in rural counties. The average is currently 4.3 insurers per state offering marketplace coverage. That number is expected to drop an average of 3.5 insurers per state in 2018.
As major insurers are leaving the marketplace, consumers are finding a smaller number of choices. Each plan may have several options, so you won’t be entirely limited. You can expect to find Bronze, Silver, and Gold plans with different premiums, deductibles, and cost-sharing. However, for about 19 percent of all enrollees throughout the United States, only one ACA health plan option will be available. And the premiums may be so costly they are prohibitive.
“This could lead to a very pricey exchange,” says Leemore Dafny, professor at Harvard Business School.
Higher Premiums on Silver Plans
The Trump Administration’s decision to stop financing cost-sharing reduction (CSR) subsidies to insurance companies on Silver Obamacare plans (the only plans for which these subsidies were available) means higher insurance premiums and out-of-pocket costs for some. In some areas of the country, Silver plans may cost the same as or even more than-higher level Gold and Platinum plans.
According to federal data, premiums for Silver plans are rising from 17% to 37% for the benchmark plans in 2018, depending on which policy is chosen.
These costs also vary on a state-by-state basis. Alaska is picking up some of the difference for its consumers with higher medical bills. Its benchmark Silver plan will drop by 22%, on average. But Iowa has only one remaining insurer on the exchange. Premiums for benchmark Silver plans there will jump to 88%.
Some consumers can take heart, though. Those for whom health insurance is considered “unaffordable” will be shielded from individual mandate penalties if the monthly cost for the lowest-cost marketplace plan is more than 8.05 percent of their household income.
Marketing Budget Slashed
The White House slashed the marketing budget for the federal exchange to let people know about the open enrollment period dates.
$100 million in last year’s advertising dollars have been reduced to a $10 million budget for 2018. In the same move, the Trump Administration cut in half the amount spent on the program of local navigators who help customers compare health insurance options.
Some argue that spending this advertising money is justified. More enrollees bring the costs down for all, making ACA insurance plans more affordable.
The Trump Administration would disagree. Why should the government double-bill the taxpayer by spending their dollars to market a product that is subsidized (again, with taxpayer dollars) 80% of the time?
And in terms of national marketing, how far could that budget stretch? 60 percent of Americans get their coverage through work. Most of the rest have Medicare or Medicaid. Some purchase it individually. Targeting the rest and reaching them is no sure bet.
Right or wrong, the end result is that fewer people are finding out about the shortened open enrollment period through the emails, text messages, and digital and radio ads purchased by the U.S. Department of Health and Human Services.
Where to Next?
One thing that’s clear from this year’s changes to the ACA this year, the future for this piece of legislation remains uncertain.
Short term health plans remain a viable option. Those who miss the Open Enrollment period, who are waiting for ACA, who are looking for coverage as a bridge to Medicare, who are 26 years old coming off their parent’s insurance, who are between jobs or waiting for benefits to begin at a new job, or are healthy and under 65 might be looking at temporary health insurance for 2018, in 2019, and beyond.