When it comes to the Affordable Care Act, uncertainty reigns supreme. With the Republican-led House and Senate vowing to repeal the law and insurers raising rates and pulling out of the exchanges, millions of Americans are left in the lurch.
It doesn’t help that open enrollment only lasts until Dec. 15 this year, and with the number of navigators on hand to help guide Americans dwindling, consumers who lost coverage for next year are left wondering what to do. Unfortunately for those looking to purchase individual insurance, it means returning to the time-consuming health exchanges – not to mention sticker shock if they don’t qualify for subsidiaries. “Every year the prices have gone up by double digits, with the average being 10 to 15 percent,” says Nate Purpura, vice president of marketing for individual and family products at eHealth Inc., the Mountain View, California, health insurance marketplace provider. “This year, it’s 36 percent. There will be real sticker shock and real pricing problems.”
White House Aims to Dismantle ACA
Ever since President Donald Trump won the U.S. election, Republicans in the House and Senate have been vowing to roll back former President Barack Obama’s Affordable Care Act. Unsuccessful in doing so legislatively, the White House has taken to dismantling it via executive orders and other moves. It has slashed funding for navigators, or those professionals who helped consumers through the process. They’ve also passed on spreading the word about the exchanges and have shortened the open enrollment period.
In October, the White House decided to stop payments to insurers that helped cover the cost of health insurance for millions of lower-income Americans, spurring legal challenges from close to 20 state attorney generals. All of this has only served to confuse consumers who aren’t sure where to go for health insurance. “Most people don’t understand open enrollment at work, let alone trying to figure out the marketplace,” says Dr. Angelo Giardino, senior vice president/chief quality officer at Texas Children’s Hospital in Houston. “It’s a very complex process, and if you erect barriers, it’s harder to sign up – so you won’t get as many people signing up.”
Exemptions Exclude Some From the Insurance Fine
One of the big knocks on the Affordable Care Act is the penalty individuals have to pay if they go without health insurance. But an exemption in the law makes foregoing insurance without being fined a possibility. That’s because under the law, if the cheapest Obamacare plan is not affordable, you don’t have to pay the fine. In order to qualify, the lowest-cost option has to be more than 8.05 percent of the household income in 2018. If you can’t afford insurance by that standard, you don’t have to pay the individual mandate tax.
“For a family of three, the gap is $47,000 in household income. This means the average family of three earning between $81,884 per year and $128,795 in household income will not be able to afford the average lowest-priced health insurance plan in 2018,” Purpura says. “For an individual, the gap is $20,000 in household income. That means the average person making between $48,240 and $69,457 can’t afford the average lowest-priced health insurance plan in 2018.” But just because you won’t get fined doesn’t mean you should skip it.
As Giardino adds: “We know that having insurance opens up the door for preventive care. If you identify things earlier, there are more successful treatments. It makes a world of difference to your health.”
Shop the Exchange First
Consumers who have been notified they’re losing their health insurance for 2018 have a few options, depending on their financial situation. Those who make under $48,240 as an individual or $98,400 for a family of four should shop the government exchanges, since they’ll qualify for a subsidiary despite what they may be hearing. “The cost-sharing reduction executive order does not impact the subsidiary eligible consumer,” Purpura says. “If you qualify for the tax credit under Obamacare, there’s very little impact from that news.”
Checking if you’re eligible for a subsidy should be your first step in getting new coverage, even if you don’t think you’ll qualify. According to Hector De La Torre, the executive director of the Transamerica Center for Health Studies, a nonprofit focused on health care, more than 80 percent of people in the exchange qualify for some kind of break. Those who shop the exchanges have to prepare for some changes. With uncertainty around the survival of Obamacare and costs for insurance providers to participate increasing, shoppers should expect to see higher premiums, less choice and different types of plans and insurers. Consumers who lost health insurance coverage because of a change in their job or another life event, such as a divorce or a new addition to the family, have and continue to be allowed to shop the health care exchange outside of open enrollment.
Gap Insurance Can Defray Expenses
Consumers who don’t qualify for a government subsidy can either purchase their insurance directly from an insurance provider or buy health insurance products that don’t qualify as major medical health insurance but can be cheaper and effective.
Take gap insurance plans, for starters. These plans provide consumers with a safety net for unexpected medical costs. Gap insurance plans come in different flavors. There’s critical illness insurance, which provides a cash payment if a person is diagnosed with cancer, has a heart attack or suffers from a stroke or another serious and costly illness. Accident insurance is another type of gap insurance that gives you a cash payout if you’re in an accident, while a fixed-benefit indemnity plan has daily payouts for specific events, like a cash payment for every day you spend in the hospital.
Short-term health insurance plans also don’t comply with the Obamacare law, but they can provide consumers with health insurance if they miss the open enrollment period. They typically work like a PPO plan, but with limited coverage, including a lack of prescription drug benefits and maternity care. But they can protect you and your finances if you have a serious illness or get into an accident.
None of these plans cover preexisting conditions, and most can decline your application based on past health history. Many include preventive care, like wellness treatments. “If you don’t qualify for subsidiary and insurance is not affordable, know the limitations” of these plans before purchasing, Purpura says. “You have to be a good consumer of insurance. Make sure you understand what you are buying, what your options are and how it works.”
