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Your checklist for buying a policy on a health insurance exchange

By Posted : October 26, 2017

Enrollment for the Affordable Care Act's health insurance exchanges' 2018 plans is open from Nov. 1, 2017 to Dec. 15, 2017. Coverage starts Jan. 1, 2018 for these plans.

Let Insurance.com help you find affordable health insurance now.

If you miss the Dec. 15, 2017 deadline, you won't be able to buy a health insurance plan for the rest of 2018 unless you have a life change, such as having a baby or getting married.

The status of the Affordable Care Act/Obamacare health plans and exchanges

President Donald Trump recently announced that he will no longer pay cost-sharing reduction (CSR) payments to insurers in the Affordable Care Act (ACA) exchanges.

The CSR payments total about $7.2 billion annually. They help keep down out-of-pocket costs for about 7.5 million Americans with incomes less than 250 percent of the federal poverty level.

Premiums on ACA plans were already averaging 20 percent in 2018, but insurance companies are increasing premiums even more without CSR payments. Without the payments, insurers may also abandon the ACA exchanges and leave some Americans without an ACA plan choice in either 2018 or 2019.

Trump's announcement comes as millions of people in ACA exchanges plans head into open enrollment on Nov. 1. The Trump Administration cut open enrollment in half this year. It usually runs through the end of January, but open enrollment for the ACA exchanges is only Nov. 1-Dec. 15 this year. Plus, the administration cut marketing for ACA plans by 90%. Insurers and ACA advocates worry that the Trump Administration’s moves will reduce enrollment and create unbalanced risk pools, which will mean higher premiums.

What does the CSR announcement mean for open enrollment?

Trump's announcement doesn't affect open enrollment. It still runs from Nov. 1-Dec. 15.

Losing CSR payments may also not change the plan offerings. Insurance companies already signed on and set their premium increases for 2018.

However, some insurers could argue that losing CSR payments allows them to get out of the 2018 contracts. In that case, they could try to leave, but states may still stop them from leaving.

Even if all insurers stay, members may see higher than expected premiums in 2018. Insurers need to comply with an ACA provision that requires them to keep down out-of-pocket costs for lower-income members. CSR payments helped insurers do just that. Insurance companies will now need to figure out a way to fill the funding gap. One way is to increase premiums.

A recent report by Avalere found that premiums for ACA “silver” plans will increase an average of 34% in 2018. Silver plans are the most popular plans in the ACA exchanges and insurance companies have proposed large premium increase for those plans. Insurers are implementing such huge premium increases on silver plans that people shopping for ACA plans may find more affordable “gold” plans once you take into account ACA tax credits. In other words, make sure to shop around for plans in different “metal” levels. 

Trump's announcement wasn't exactly a surprise. Many insurance companies included the possibility of the president stopping CSR payments in their proposed increases for 2018. However, insurers that set rates expecting CSR funding may request to revise premiums for 2018. One state, Oregon,  even suggested that payers increase their proposed rates on silver plans  by another 7.1 percentage points in 2018 to help offset the loss of CSR payments.

So, even if you have ACA plan options, you may see higher premiums than expected.

In one bit of good news, healthcare.gov now organizes plans based on your monthly premium after you account for tax credits and subsidies. This means shopping on heatlhcare.gov is more consumer-friendly than before and it’s easier to comparison shop. 

Tax credits may help buffer CSR payment loss

For most people in ACA plans, higher premiums will get swallowed up by tax credits. The ACA offers a premium tax credit for members in ACA plans. Those credits help members between 100 and 400 percent of the federal poverty level reduce premiums or out-of-pocket costs. More than 80 percent of ACA plan members are eligible for the tax credit.

What this means is that premium tax credits may offset premium increases for those who qualify. However, the tax credits won't help many middle class and upper-middle class members who don't qualify for the tax credit. They will face higher premiums and feel the brunt of the CSR payment cuts and subsequent premium increases.

What happens now?

The CSR payment issue is now in two different places -- Capitol Hill and the courts. Eighteen states and the District of Columbia sued because of Trump's CSR decision, but a federal judge ruled that Trump does not have to make the CSR payments. Insurance companies may also sue for the payments.

Congress is hoping to resolve the issue with legislation to continue CSR payments for two years. Senators were already talking about a possible bipartisan solution in September. Senators Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington) were working on a plan for Congress to appropriate the money for the CSR payments through 2019.

This would have taken the payment issue away from the president, guaranteed insurer payments and stabilized the market somewhat. However, Republican leaders set aside that proposal and instead decided on pushing a large healthcare reform bill that would have repealed the ACA. That proposal failed to gain enough support, and now we're back to a possible bipartisan solution.

The Congressional Budget Office estimated the bipartisan plan would reduce the deficit by $3.8 billion over 10 years and not affect coverage premiums.

In addition to the Alexander-Murray plan, Republicans are proposing more conservative CSR bills that could include expanding Health Savings Accounts and delaying the employer mandate to offer health insurance.

There are still questions as to whether the Republican-led Congress can garner enough support for CSR payments. Congress may not take up the issue until December and could include it among other bills in a final end-of-year spree.

If Congress doesn’t pass CSR legislation, states may forge lengthy legal battles to get the federal government to pay. Some states may even try to make the payments in the interim in hopes of getting repaid later. Until all of these issues are resolved, the ACA exchanges will remain teetering, and insurers will discuss internally whether the business is worth it. Stay tuned.

-- by Les Masterson

Note, however, that some states are extending the federal time-frame.

The federal government’s rule gives people shopping for 2018 coverage on the federal exchange 45 days to sign up, from Nov. 1 through Dec. 15. However, some states are extending the time that people have to buy health insurance for themselves. Currently, those states are:

California – Nov. 1 to Jan. 31

Colorado – Nov. 1 to Jan. 12

D.C. – Nov. 1 to Jan. 31

Massachusetts – Nov. 1 to Jan. 31

Minnesota – Nov. 1 to Jan. 14

Washington – Nov. 1 to Jan. 15

Individuals and families who qualify will receive subsidies in the form of tax credits to offset costs. You may also be able to keep your current health insurance policy.

You may also purchase individual or family health insurance plans from insurance companies or through agents; you won't qualify for any subsidy, but you may wind up with a broader set of options for hospital networks and doctors.

So, if you do not have access to health insurance through your employer, need coverage and are ready to enroll, but aren't sure how the process works, don't fret. We will outline the process, starting with the information you'll need to apply. Then we'll explain the application and enrollment process. Finally, we'll outline the four types of plans.

Gather necessary documents before shopping

Ever dealt with Uncle Sam, from filing your federal tax return to signing up for Social Security? Then you have a good idea of the details you'll need for the Health Insurance Marketplace -- the virtual "shopping center" where you'll choose and purchase your insurance coverage. Those details include:

• Name, contact information and Social Security number for you and every member of your household who needs health insurance or is listed on your federal tax return.

• Incarceration status for anyone for whom you're applying.

• Immigration status, document type and number for any member of your household who is an immigrant.

• Active military or veteran status for you or any member of your household.

• Job information about you and every member of your household, including each person's wages and his or her employer's contact information.

• Other income that you or any household members receive in the current month and how often it's paid out, excluding child support, veterans' payments or Supplemental Security Income (SSI).

• Any federal tax deductions you claim.

• Specifics about health insurance anyone in your household has, including coverage type, the name of the covered person, insurance company name, policy number and whether it's COBRA or a retirement plan.

• If anyone in your household has health insurance through a job, that person's employer must provide more information via the "Employer Coverage Tool" (many employers have already provided this information for employees). Transfer the information to your application.

• To choose wisely among the policies you'll be offered, you must know how health insurance works and you should get yourself familiar with terms, such as premiums, copayments, deductibles, out-of-pocket maximums and provider networks.

The application process for health insurance exchanges

The first step in enrolling for a health insurance policy in the marketplace is to determine where to apply. Online, you'll go to Healthcare.gov quick guide to find the website for residents of your state. You can also call 1-800-318-2596 seven days a week, 24 hours a day to learn where to apply in person or by phone. In any case, if you don't want to apply yourself, you can authorize someone else to do it.

When you go to your marketplace website, you'll create an account with a user name, password and security questions.

Next is the application. If you apply by phone or in person, your helper will choose the right form. Online, you'll see three options:

1) Health Coverage and Help Paying Costs

2) Short Form

3) No Financial Assistance

Use the first or second form option if you want health insurance and financial help to pay for it. For yourself and family members, use the first form. Singles can also use it, but the "Short Form" is designed for them and will take less time. The third form is for individuals or people with families who either don't want or don't qualify for financial assistance.

Next, use the information you gathered to fill out the application. You can always save your application and come back later to continue working on it. As you type in your information, the system will check your entries against Social Security, IRS and other federal databases. Mismatches with government information will be flagged, and you'll need to explain the discrepancy.

Once you enter all your information, the marketplace will show you health insurance options that fit your needs. Four "metal" plan levels are available: bronze, silver, gold and platinum. At each level, many plans will be available, and all offer the same 10 required services. You'll likely be offered plans in more than one level.

You don't have to figure out your costs, subsidies or credits. The marketplace does all of that for you, based on the information in your application. For a benchmark, though, know that you'll qualify for premium discounts in the form of tax credits if you earn up to 400 percent of the federal poverty level -- that's $97,000 for a family of four in 2015. If you earn up to 250 percent of the federal poverty level, you will be eligible for lower deductibles and copayments as well.

Bronze plans will typically offer the lowest premiums, but they will most likely also have the highest out-of-pocket costs. As you climb the levels, premium costs rise, but out-of-pocket costs drop.

  • Bronze - The insurer pays 60 percent; you pay 40 percent.
  • Silver - The insurer pays 70 percent; you pay 30 percent.
  • Gold - The insurer pays 80 percent; you pay 20 percent.
  • Platinum- The insurer pays 90 percent; you pay 10 percent.

A bronze plan's low premiums may seem tempting, but if you expect to visit medical providers frequently, you will pay more out-of-pocket. Therefore, a gold or platinum plan might save you money. If you don't expect frequent visits to medical providers, a bronze or silver plan might be best. Online calculators will help you compare these plan costs. After you evaluate your options and decide how you'll pay the premiums, you'll choose a plan and sign up.

Some of the less expensive plans come with very limited choices of doctors and hospitals you can use for care. So if you have a particular doctor or hospital in mind for your care, you should check the plan to be sure they are listed before you sign up.



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