ACA sign-ups hit all-time high – with a month of open enrollment remaining

Key takeaways

The Biden administration announced last week that enrollment in ACA marketplace plans had reached an all-time high of 13.6 million* as of December 15, with a month still to go in the open enrollment period (OEP) for 2022 in most states.

That’s an increase of about 2 million (17%) over enrollment as of the same date last year, according to Charles Gaba’s estimate, and well above the previous high of 12.7 million recorded as of the end of open enrollment for 2016, which lasted until January 31 in most states. When OEP ends this coming January, enrollment in marketplace plans will exceed 14 million.

92% of marketplace enrollees in HealthCare.gov states received health insurance subsidies

In the 33 states using the federal exchange, HealthCare.gov (for which the federal government provides more detailed statistics than in the 18 state-based exchanges), almost all enrollees (92%) received premium tax credits (subsidies) to help pay for coverage – including 400,000 who would not have qualified for subsidies prior to passage in March of this year of the American Rescue Plan (ARP). That bill not only increased premium subsidies at every income level through 2022, but also removed the previous income cap on subsidies, which was 400% of the federal poverty level (FPL) ($51,520 per year for an individual and $106,000 for a family of four). In 2022, no enrollee who lacks access to other affordable insurance pays more than 8.5% of income for a benchmark Silver plan (the second cheapest Silver plan in each area), and most pay far less.

The enrollment increase is tribute to the huge boost in affordability created by the ARP subsidies. A benchmark Silver plan with strong Cost Sharing Reduction (CSR, attached to Silver plans for low-income enrollees) is now free at incomes up to 150%FPL ($19,320 for an individual, $39,750 for a family of four in 2022) and costs no more than 2% of income ($43/month for an individual) at incomes up to 200% FPL. The percentage of income required for the benchmark Silver plan  was reduced at higher incomes as well.  The ARP also provided free high-CSR Silver coverage to anyone who received any unemployment insurance income in 2021.

The American Rescue Plan boosted enrollment throughout 2021 and into 2022

The enrollment gains during OEP build on the enrollment surge triggered by the emergency special enrollment period (SEP) opened by the Biden administration on February 15 of this year, which ran through August 15 in the 33 states using HealthCare.gov, and for varying periods in the 15 states that ran their own exchanges in 2021. (There are now 18 state-based exchanges, as Kentucky, Maine and New Mexico launched new ones for 2022.)

The ARP subsidies came online in April (or May in a few state marketplaces). From February to August, 2.8 million people enrolled during the SEP, and total enrollment increased by 900,000 on net from February to August (as people also disenrolled every month, and many enrollees doubtless regained employer-sponsored coverage during a period of rapid job growth).

In addition, once the ARP subsidy increases went into effect, 8 million existing enrollees saw their premiums reduced by an average of 50%, from $134 to $67 per month. Enrollees’ premiums in 2022 should be similar to those of the SEP.

Enrollment growth was concentrated in states that have not expanded Medicaid

Enrollment increases during open enrollment – as during the SEP and the OEP for 2021 – were heavily concentrated in states that have not enacted the ACA expansion of Medicaid eligibility. There were 14 such states during most of the SEP and 12 during the (still current) OEP, as Oklahoma belatedly enacted the Medicaid expansion starting in July of this year, and Missouri in October.

In non-expansion states, eligibility for ACA premium subsidies begins at 100% FPL, while in states that have enacted the expansion, marketplace subsidy eligibility begins at 138% FPL, and Medicaid is available below that threshold. In non-expansion states, the marketplace is the only route to coverage for most low-income adults, and those who report incomes below 100% FPL mostly get no help at all – they are in the notorious coverage gap. In those states, about 40% of marketplace enrollees have incomes below 138% FPL – that is, they would be enrolled in Medicaid if their states enacted the expansion.

During OEP, these 12 non-expansion states account for 81% of the enrollment gains in the 33 HealthCare.gov states, and about two-thirds of enrollment gains in all states. The table below also shows gains over a two-year period, encompassing the effects of the COVID-19 pandemic.

Total plan selections in non-expansion states**
Dec. 15 open enrollment snapshots 2020-2022
State 2020 2021 2022 Increase 2021-2022 % increase 2021-2022 Increase 2020-2022 % increase 2020-2022
Alabama 159,820 168,399 205,407 37,008 22.0% 45,587 28.5%
Florida 1,912,394 2,115,424 2,592,906 477,482 22.6% 680,512 35.6%
Georgia 464,041 541,641 653,999 139,358 27.1% 189,958 40.9%
Kansas 85,880 88,497 102,573 14,076 15.9% 16,693 19.4%
Mississippi 98,868 110,519 132,432 21,913 19.8% 33,564 33.9%
North Carolina 505,159 536,270 638,309 102,039 19.0% 133,150 26.4%
South Carolina 215,331 230,033 282,882 52,849 23.0% 67,551 31.4%
South Dakota 29,330 31,283 39,292 8,009 25.6% 9,962 34.0%
Tennessee 200,723 211,474 257,778 46,304 21.9% 57,055 28.4%
Texas 1,117,882 1,284,524 1,711,204 426,680 33.2% 593,322 53.1%
Wisconsin 196,594 192,183 205,991 13,808 7.2% 9,397 4.8%
Wyoming 24,665 26,684 33,035 6,351 23.8% 8,370 33.9%
Non-expansion states 5,010,687 5,509,931 6,855,808 1,345,877 24.4% 1,845,121 36.8%
All HC.gov states 7,533,936 8,053,842 9,724,251 1,670,409 20.7% 2,190,315 29.1%

In the 39 states that have enacted the ACA Medicaid expansion (21 on HealthCare.gov and 18 running their own exchanges), far fewer enrollees are eligible for free Silver coverage. In expansion states, eligibility for marketplace subsidies begins at an income of 138% FPL, as people below that threshold are eligible for Medicaid. Nevertheless, enrollment growth in non-expansion states during the current OEP is substantial, increasing by about 755,000 year-over-year, or 13%.

The marketplace has been a pandemic ‘safety net’

The marketplace has been a bulwark against uninsurance during the pandemic, among low-income people especially and in the non-expansion states in particular. As shown in the chart above, enrollment in these 11 states increased by 1.8 million from Dec. 15, 2019 to Dec. 15, 2021 – a 37% increase. For all states, the two-year increase is in the neighborhood of 25% and will approach 3 million (from 11.4 million in OEP for 2020 to above 14 million when OEP for 2022 ends in January). That’s in addition to an increase of more than 12 million in Medicaid enrollment during the pandemic.

While millions of Americans lost jobs when the pandemic struck, and millions fewer are employed today than in February 2020, the uninsured rate did not increase during 2020, according to government surveys, and may even prove to have downticked during 2021 or 2022 when the data comes in.

While the government has not yet published detailed statistics as to who has enrolled during the current OEP, they did do so in the final enrollment report for the emergency SEP. During the emergency SEP, out of 2.8 million new enrollees, 2.1 million were in the 33 HealthCare.gov states. In those states, 41% of enrollees obtained Silver plans with the highest level of CSR, which means that they had incomes under 150% FPL (or received unemployment income) and so received free coverage in plans with an actuarial value of 94% – far above the norm for employer-sponsored plans.

The median deductible obtained in HealthCare.gov states was $50, which makes sense, as 54% of enrollees obtained Silver plans with strong CSR, raising the plan’s actuarial value to either 94% (at incomes up to 150% FPL) or to 87% (at incomes between 150% and 200% FPL). Two-thirds of enrollees in HealthCare.gov states paid less than $50 per month for coverage, and 37% obtained coverage for free.

At higher incomes, as noted above, 400,000 enrollees who received subsidies in HealthCare.gov states would not have been subsidy-eligible before the ARP lifted the income cap on subsidies (previously 400% FPL). The same is also doubtless true for several hundred thousand enrollees in state-based marketplaces. The SBEs account for a bit less than a third of all enrollment, but in those states, all of which have expanded Medicaid, the percentage of enrollees with income over 400% FPL is almost twice that of the HealthCare.gov states (12% versus 7% during the emergency SEP).

ARP: a patch for the coverage gap?

The strong enrollment growth in non-expansion states – an increase of 37% in two years – indicates that during the pandemic, some low-income people in those states found their way out of the coverage gap (caused by the lack of government help available to most adults with incomes below 100% FPL).  In March 2020, the CARES Act (H.R.748) provided supplementary uninsurance income of $600 per week for up to four months to a wide range of people who had lost income during the pandemic, likely pushing many incomes over 100% FPL. In 2021, anyone who received any unemployment income qualified for free Silver coverage, and during the emergency SEP, 84,000 new enrollees took advantage of this provision (along with 124,000 existing enrollees). That emergency provision is not in effect in 2022, however.

Marketplace subsidies are based on an estimate of future income. For low-income people in particular, who are often paid by the hour, work uncertain schedules, depend on tips, or are self-employed, income can be difficult to project. The desire to be insured during the pandemic may have spurred some applicants to make sure their estimates cleared the 100% FPL threshold. (Enrollment assisters and brokers can help applicants deploy every resource to meet this goal.)

For OEP 2022, the Biden administration raised funding for nonprofit enrollment assistance in HealthCare.gov states to record levels, enough to train and certify more than 1,500 enrollment navigators. This past spring, in compliance with a court order, the exchanges stopped requiring low-income applicants who estimated income  over 100% FPL to provide documentation if the government’s “trusted sources” of information indicated an  income below the threshold.

Comparatively weak enrollment growth in Wisconsin may support the hypothesis that under pressure of the pandemic, some enrollees in other non-expansion states are climbing out of the coverage gap. Alone among non-expansion states, Wisconsin has no coverage gap, as the state provides Medicaid to adults with incomes up to 100% FPL (rather than up to the 138% FPL threshold required by the ACA Medicaid expansion, which offers enhanced federal funding to participating states). In Wisconsin, those whose income falls below the 100% FPL marketplace eligibility threshold have access to free coverage. Wisconsin is the only non-expansion state that did not experience double-digit enrollment growth in OEP 2022 or from 2020-2022.

The future of increased subsidies is unclear

The American Rescue Plan was conceived as emergency pandemic relief, and its increased subsidies run only through 2022. President Biden’s Build Back Better bill, which passed in the House of Representatives but is currently stalled in the Senate, would extend the ARP subsidies through 2025 or possibly further.

The large increase in enrollment this year should add pressure on Congress to extend the improved subsidies into future years. Consumer response to the increased subsidies has proved immediate and dramatic. The ARP subsidy boosts brought the Affordable Care Act much closer than previously to living up to the promise of “affordable” care expressed in its name. Going backwards on that promise should not be seen as a politically viable or ethical path.

* * *

* Another million people are enrolled in Basic Health Programs established under the ACA by Minnesota and New York – low-cost, Medicaid-like programs for state residents with incomes under 200% FPL. Enrollment in these programs is on track to increase by 13% this year, according to Charles Gaba’s estimate.

** HealthCare.gov all-state totals are for the 33 states using the federal exchange this year. Source: Charles Gaba, OE snapshots as of mid-December, 2021-22, 2020-2021; see also CMS end-of-OEP snapshots for 2020, 2021, 2022

 

 

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

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How the Build Back Better legislation might affect your coverage

Key takeaways

Just before Thanksgiving, the House of Representatives passed the Build Back Better Act (HR5376) and sent it to the Senate. The version that the House approved was scaled down from the initial proposal, but it’s still a robust bill that would create jobs, protect the environment, help families meet their needs, and improve access to health care.

Lawmakers had initially hoped that the bill would be enacted before Christmas. But the situation has changed in December, with West Virginia Senator Joe Manchin stating recently that he will not vote for the current Build Back Better legislation. The situation is still in flux, and it’s noteworthy that the nation’s largest coal miners union has asked Manchin to reconsider his position.

For the time being, we don’t know what might come of this. Manchin might reconsider, or the legislation might be changed to support his earlier requests, or it might be scrapped altogether and replaced with various piecemeal bills.

But for now, we wanted to explain how the House’s version of the Build Back Better Act would affect your health insurance in 2022 and future years. We’ll also clarify what you can already count on in 2022, even without the Build Back Better Act. And how should you handle the current open enrollment period, given that the legislation is still up in the air?

Let’s start with a summary of how the House’s version of the BBBA would affect people who buy their own health insurance (keeping in mind that we don’t know whether the Senate will pass any version of the BBBA, and if they do, what changes might be incorporated):

Law would extend larger and more widely available subsidies

The enhanced premium tax credit (subsidy) structure created by the American Rescue Plan (ARP) would remain in place through 2025, instead of ending after 2022. This would mean:

  • There would continue to be no “subsidy cliff” through 2025. Subsidies would be available to households earning more than 400% of the poverty level, as long as the cost of the benchmark plan would otherwise be more than 8.5% of household income.
  • Subsidies would continue to be larger than they were prior to the ARP. People with household income up to 150% of the poverty level would be able to enroll in the benchmark plan at no cost. And people with income above that level would continue to pay a smaller percentage of their income for the benchmark plan, relative to what they had to pay pre-ARP.

These enhanced subsidies have made coverage much more affordable in 2021, and the BBBA would extend them for another three years.

It’s also important to note that HHS finalized a new rule this year that allows year-round enrollment via HealthCare.gov for people whose income doesn’t exceed 150% of the poverty level. This rule remains in place for as long as people at that income level are eligible for $0 premium benchmark plans. Under the ARP, that would just be through 2022. But the BBBA would extend the availability of this special enrollment opportunity through 2025.

BBBA would include one-year extension of unemployment-related subsidies

The ARP’s subsidies related to unemployment compensation would be available in 2022, instead of ending after this year. The Congressional Budget Office (CBO) projects that about a million people will receive these enhanced subsidies, and that about half of them would otherwise be uninsured in 2022.

Under the ARP, if a person receives unemployment compensation at any point in 2021, any income above 133% of the poverty level is disregarded when they apply for a marketplace plan. That means they’re eligible for a $0 benchmark plan and full cost-sharing reductions (CSR).

The BBBA would set the income disregard threshold at 150% of FPL for a person who receives unemployment compensation in 2022. But the effect would be the same, as applicants at that income are eligible for $0 benchmark plans and full CSR. As noted above, there’s also a year-round enrollment opportunity for people whose income doesn’t exceed 150% of the poverty level (that’s available in all states that use HealthCare.gov; state-run marketplaces can choose whether or not to offer it).

As is the case under the ARP, the unemployment-related subsidies would be available for the whole year if the person receives unemployment compensation for at least one week of the year. But as is also the case under the ARP, the marketplace subsidies would not be available for any month that the person is eligible for Medicare or an employer-sponsored plan that’s considered affordable and provides minimum value.

Law would close Medicaid coverage gap for 2022-2025

In 11 states that have refused to expand Medicaid under the Affordable Care Act, there’s a coverage gap for people whose income is under the poverty level. As of 2019, there were more than 2.2 million people caught in this coverage gap (mostly in Texas, Florida, Georgia, and North Carolina). They are ineligible for Medicaid and also ineligible for premium subsidies in the marketplace.

The BBBA would close the coverage gap for 2022 through 2025. The current rules (which only allow marketplace premium subsidies if an applicant’s income is at least 100% of the poverty level) would be changed to allow premium subsidies regardless of how low a person’s income is.

This would be applicable nationwide, but subsidies would continue to be unavailable if a person is eligible for Medicaid. So in most states, subsidies would continue to be available only for applicants with income above 138% of the poverty level, as Medicaid is available below that level in the 38 states that have expanded Medicaid under the ACA.

In 2022, people who would otherwise be in the coverage gap would be eligible for $0 benchmark plans and full cost-sharing reductions (CSR). In 2023 through 2025, they would continue to be eligible for $0 benchmark plans, and their cost-sharing reductions would become more robust. Instead of covering 94% of costs for an average standard population (which is currently the most robust level of CSR), their plans would cover 99% of a standard population’s costs.

The CBO projects that the BBBA’s subsidy enhancements would increase the number of people with subsidized marketplace coverage by about 3.6 million. Many of those individuals would otherwise be in the coverage gap and uninsured.

Nothing would change about Medicaid eligibility or subsidy eligibility in the states that have expanded Medicaid. But the BBBA would provide additional federal funding for Medicaid expansion in those states for 2023 through 2025. Currently, the federal government pays 90% of the cost of Medicaid expansion, and that would grow to 93% for those three years.

Build Back Better Act would improve insulin coverage

The BBBA would require individual and group health plans to cover certain insulins before the deductible is met, starting in 2023. Enrollees would pay no more than $35 for a 30-day supply of insulin (or 25% of the cost of the insulin, if that’s a smaller amount).

This requirement would apply to catastrophic plans as well as metal-level plans. And although HSA-qualified high-deductible health plans are often excluded from new coverage mandates, that would not be the case here. In 2019, the IRS implemented new rules that allow HSA-qualified plans to cover, on a pre-deductible basis, some types of care aimed at controlling chronic conditions; insulin is among them.

Law would reset affordability rules for employer-sponsored coverage

Under ACA rules, a person cannot get premium subsidies in the marketplace if they have access to an employer-sponsored plan that provides minimum value and is considered affordable.

Under current rules, an employer-sponsored plan would be considered affordable in 2022 if the employee’s cost for employee-only coverage isn’t more than 9.61% of the employee’s household income. Under the BBBA, this threshold would be reset to 8.5% of household income for 2022 through 2025.

For some employees, this would make marketplace subsidies newly available. And for others, employers might opt to cover more of their premium costs, making their employer-sponsored coverage more affordable. But some employers might simply stop offering employer-sponsored coverage altogether, despite the fact that they would potentially be subject to the ACA’s employer mandate penalty if they have 50 or more employees (if an employer stops offering coverage, the employees can enroll in a marketplace plan with income-based subsidies).

It’s important to note that the BBBA would not address the family glitch. So the family members of employees who have an offer of affordable self-only coverage would continue to be ineligible for marketplace subsidies if they have access to the employer-sponsored plan, regardless of the cost. But prominent health law scholars have opined that the Biden administration could fix the family glitch administratively, without legislation. There is some cause to hope that the administration may do so.

BBA would make changes to MAGI calculation

The ACA has its own definition of modified adjusted gross income (MAGI), used to determine eligibility for premium tax credits and cost-sharing reductions (a very similar version of MAGI is used to determine eligibility for CHIP, Medicaid expansion, and Medicaid for children and pregnant women).

The BBBA would make a couple of changes to the way MAGI is calculated when a tax dependent has income or the household receives a lump sum payment from Social Security:

  • Through 2026, the first $3,500 in income earned by dependents would not have to be added to the family’s household income.
  • From 2022 onward, lump sum Social Security payments attributable to prior years would not have to be included in a person’s MAGI. The median processing time for a Social Security disability appeal is well over a year, so it’s common for people to wait a long time and then suddenly receive several months of Social Security payments all at one time. This can sometimes result in them having to repay premium tax credits for the year in which they receive the lump sum. The BBBA would prevent that in future years.

What does this mean for the current open enrollment period?

Given that the legislation is still up in the air, here’s what you need to keep in mind when enrolling in coverage for 2022:

General subsidies

  • There is no set income cap for marketplace subsidies in 2022. That provision is already in place, and doesn’t depend on the BBBA. (Your eligibility for a subsidy does depend on your income, but that eligibility now extends above 400% of the poverty level in most places, depending on your age.)
  • The more robust subsidy structure that the ARP introduced this year will continue to be in effect in 2022, regardless of whether the BBBA is enacted.
  • Subsidies are much larger and more widely available than they were last fall. And most of the ARP’s subsidy enhancements were already slated to continue through 2022. This means most enrollees can sign up now and rest assured that their 2022 coverage options and subsidy amounts will not change if and when the BBBA is enacted.

Unemployment-related subsidies

  • If you received unemployment compensation in 2021 and got the ARP’s unemployment-related subsidies, you may find that your after-subsidy premium is currently slated to increase significantly for 2022, due to the expiration of the unemployment-based subsidies.
  • If you’re still going to be receiving unemployment compensation after the start of 2022, you might end up qualifying for another round of robust subsidies in 2022. But that will depend on the BBBA. For the time being, the application will just ask for your projected income, which will need to include the total amount that you expect to earn in 2022. That might result in a substantial subsidy or not, depending on your household’s specific details.
  • The fact that open enrollment continues through at least January 15 in most states can be used to your advantage. For now, you can enroll in the plan that best fits your budget based on the existing subsidy rules for 2022. (In some states, you still have time to sign up for coverage that starts January 1, although most states are now enrolling people in plans with February effective dates.) If the BBBA is enacted in early January, you would then have a chance to pick a different plan prior to the end of the open enrollment period. It would have a February effective date (or March, depending on the state) and your out-of-pocket costs would reset to $0 on the new plan. But for some people, this will be the opportunity to upgrade from a Bronze plan to a Silver plan, so it’s worth considering as an option if you know that you’ll still be receiving unemployment compensation after the start of 2022.
  • If the BBBA isn’t enacted by mid-January, you should still keep an eye on this. A different version of the bill, or smaller piecemeal versions, might be enacted later in 2022. If that happens and unemployment-based subsidies are included in the final legislation, you might become eligible for new subsidies at that point. That may or may not come with a special enrollment period to allow people receiving unemployment compensation to switch plans. For now, it’s all up in the air, but the situation could change in 2022.

Learn how you might avoid the coverage gap

If you have a low income, are in a state that hasn’t expanded Medicaid, and the marketplace is showing that you’re not eligible for any premium tax credits, you’ll want to read this article about ways to avoid the coverage gap.

Assuming you can’t get out of the coverage gap for the time being, you’ll want to keep a close eye on the BBBA. If it’s enacted with the same coverage gap provisions that the House approved, you may be eligible for full premium tax credits as of early 2022. And you’d have a chance to enroll in coverage at that point.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Why your ACA premium might be going up for 2022

Key takeaways

As has been the case for the last few years, average individual and family health insurance rate changes for 2022 are mostly modest. The nationwide average increase is about 3.5%, and there are new insurers joining the marketplaces in the majority of the states.

That all sounds like great news, but the reality is a bit more complex. The modest average rate changes apply to full-price plans, but most marketplace enrollees do not pay full price. And although new insurers bring added competition, their entry could also mean a sharp reduction in premium subsidy amounts, depending on how the new insurer prices its plans.

So despite the headlines about small average rate changes, the rate change for your specific plan might be nowhere near that average. But that doesn’t necessarily mean you have to swallow a large increase.

What affects fluctuations in what you pay for insurance premiums?

The annual premium changes that grab headlines and that factor into state and federal averages are for full-price premiums. But very few marketplace/exchange enrollees pay full price. Most receive premium tax credits (subsidies), which means that their rate changes will also depend on how much their subsidy amount fluctuates from one year to the next.

ACA tax credits are set so that the enrollee pays a fixed percentage of income for the benchmark plan – the second-cheapest Silver plan in their area. When the unsubsidized benchmark plan premium changes from year-to-year, so does the size of the tax credit. If a discount insurer enters the market, your tax credit may shrink. That doesn’t matter if you choose the benchmark plan, but it may make other plans more expensive.

The averages also lump each insurer’s plans together, so although an insurer might have an average rate change of 5%, it could have a range of -10% to +20% across all of its plans.

And average rate changes also don’t account for the fact that rates increase with age. Even if your health plan has no annual rate changes at all for any of its plans, your pre-subsidy price will still be higher in the coming year simply because you’re a year older (if you receive subsidies, the subsidies will increase to keep pace with the age-related premium increases).

Anatomy of a drastic increase in premium payment

Let’s consider Monique, who is 36 years old, lives in Lincoln, Nebraska, and has an annual income of $35,000. This year, she’s enrolled in a Silver EPO plan from Medica (Medica with CHI Health Silver Copay) that has a $4,800 deductible, $45 copays for primary care visits, and an $8,150 cap on out-of-pocket costs. She pays no monthly premiums at all, because the full-price cost of the plan in 2021 is $504/month (based on her being 35 when she enrolled in that plan), and she’s eligible for a subsidy of $513/month.

Full-price premiums in Nebraska are increasing by more than the national average for 2022, with an average increase of a little less than 9%. But imagine Monique’s surprise when her renewal notice showed that her after-subsidy premium would be going from $0/month in 2021 to $226/month in 2022.

Why is her premium going up so much, when average full-price rate increases in Nebraska are in the single-digit range?

New health plan options can affect benchmark plans – and your subsidies

Nebraska is a good example of a place where there’s a lot more competition in 2022. Oscar and Ambetter have both joined the marketplace statewide, and the number of available plans has more than quadrupled. When Monique was shopping for plans last fall, she had a total of 22 options from which to choose. For 2022, however, she can pick from among 95 different plans.

In 2021, the benchmark plan (second-lowest-cost Silver plan) was offered by Medica and had a pre-subsidy price tag of $657/month. But for 2022, Ambetter offers the lowest-cost Silver plans in Lincoln, so they have taken over the benchmark spot. And the second-lowest-cost Silver plan for a 36-year-old now has a pre-subsidy premium of just $475.

So in Monique’s case, the cost of the benchmark plan has dropped by $182/month. And since subsidy amounts are based on the cost of the benchmark plan, Monique’s subsidy is also much smaller for 2022 – it doesn’t need to be as large in order to keep the cost of the benchmark plan at the level that’s considered affordable.

In addition, Medica has raised the base price of Monique’s plan from $504/month in 2021 to $560/month in 2022. That’s partially due to Monique’s increasing age, and partially due to the 10% overall average rate increase that Medica imposed for 2022.

The perfect storm for a large net rate increase?

That’s a perfect storm for a large net rate increase: The benchmark premium has dropped by $182/month while her health plan’s rate has increased by $56/month.

In 2021, Medica offered both the lowest-cost and second-lowest-cost Silver plan in Lincoln, and there was a significant difference in price between the two plans ($504/month for the lowest-cost, versus $657/month for the second-lowest-cost). Monique’s plan was the lowest-cost Silver option, and the large difference in premium between her plan and the benchmark plan explained why she was able to enroll in her plan with no premium at all. all. (A spread that big between the two cheapest Silver plans is unusual and creates a huge discount for the cheapest Silver plan when it happens.)

But that’s no longer the case for 2022. Ambetter has the four lowest-cost Silver plans in the area, and there’s only a $17 difference in price across all four of them. The two lowest-cost Silver plans are actually priced at exactly the same amount. As a result, the cheapest Silver plan that Monique can get for 2022 is going to be $141/month.

The two plans at that price both have lower out-of-pocket costs than her current plan. (They’re capped at $6,450 and $6,100, versus $8,550, which is the new out-of-pocket limit that her existing plan will have in 2022.) But non-preventive office visits are only covered after the deductible is met, whereas her current plan has copays for office visits right from the start. (Certain preventive care is covered in full on all plans, without a need to pay any deductible or copays.)

You may not be stuck with that higher 2022 premium.

The good news for Monique is that she’s not stuck with her new $226/month premium. There are 15 Silver plans that are less expensive than that for 2022, and there are also 43 Bronze plans that are less expensive, including several that are under $50/month. Bronze plans do tend to have fairly high out-of-pocket costs. But Monique can select from among three Bronze plans offered by Bright Health that include pre-deductible coverage for things like primary care visits, outpatient mental health care, and urgent care visits, with monthly premiums that range from $18 to $42.

Although those Bright Health Plans do have deductibles that are higher than her current Medica plan, she might find that she comes out ahead on out-of-pocket costs due to the more robust pre-deductible coverage that they provide. And that might be especially true when she factors in the premium savings: A plan that costs $18/month will save her more than $200/month in premiums, compared with renewing her current plan.

The takeaway point here is to not panic if your plan’s premium is increasing by a lot more than you might have expected. Even if your rate is increasing significantly, you might find that there are other options available that will be a better fit for your budget.

The fact that there are more plans available in most areas of the country for 2022 can be a plus or a minus, depending on the circumstances. In Monique’s case, a new plan has taken over the benchmark spot and reduced her subsidy amount. But there are also dozens of other new plans in her area, many of which might be a perfect fit for her medical needs.

How to find solid replacement coverage with a lower net premium

In order to pick a plan, Monique will need to consider the whole picture, including total premium costs, expected out-of-pocket medical costs, and provider networks. If she takes any medications, she’ll need to compare the various plan options to see whether her drugs are covered and how much she can expect to pay at the pharmacy.

Although this article focuses on plans available in Lincoln, Nebraska, people in other parts of the country can be facing varying degrees of surprising net rate increases, even when overall full-price rate changes in their area are fairly modest.

In states that use HealthCare.gov, the average enrollee can select from among almost 108 plans for 2022, up from just 61 in 2021. Even if the benchmark plan in your area has remained unchanged, the influx of new plans might mean that there’s a better option available for you in 2022, and now’s your chance to switch your coverage. It’s never in your best interest to just let your plan auto-renew without considering the other options, and that’s especially true when there are so many new plans available.

In every community, there are brokers and Navigators who can help you understand what’s happening with your current plan, and consider whether a plan change might be in your best interest. For more information about selecting a plan during open – and open enrollment deadlines in your state – read our 2022 Guide to ACA Open Enrollment.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

 

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Four reasons to not wait until January to enroll in an ACA health plan

Reasons to enroll in an ACA health plan by December 15?

  1. If you’re currently uninsured, delaying your enrollment will mean no coverage in January.
  2. If you’re uninsured or enrolled in a non-marketplace plan, delayed enrollment might mean missing out on free money.
  3. If you’re auto-renewing your 2021 plan, you could by surprised on January 1.
  4. Out-of-pocket expenses under your 2021 plans won’t transfer in February and March.

Open enrollment for 2022 individual/family health coverage began on November 1. The enrollment window is longer this year, continuing until at least January 15 in nearly every state. (For now, Idaho still plans to end the open enrollment period on December 15.)

The longer open enrollment period does give people some extra wiggle room during the busy holiday season. But for most people, December 15 is still the soft deadline you’re going to want to keep in mind. In most states, that’s the last day you can enroll in coverage that will take effect January 1.

Which states have open enrollment dates past December 15 – but still have January 1 effective dates?

There are some exceptions, however. The following state-run exchanges are giving people extra time to sign up for a plan that takes effect January 1:

But in the rest of the country, you need to enroll by December 15 to have your plan start on January 1. And that’s important for several reasons.

1. Currently uninsured? Delaying your enrollment will mean no coverage in January.

If you’re not already enrolled in ACA-compliant coverage in 2021, the current open enrollment period is your chance to change that for 2022.

But if you wait until the last minute to enroll, you won’t have coverage in place when the new year begins. Instead, you’ll be waiting until February 1 — or March 1 – if you enroll at the last minute in a few states with longer enrollment windows.

2. Currently uninsured or enrolled in a non-marketplace plan? Delayed enrollment might mean missing out on free money.

If you considered marketplace coverage in the past and found it to be unaffordable, you might currently be uninsured or enrolled in a plan that isn’t regulated by the ACA. Or you might have opted to buy ACA-compliant coverage outside the exchange, if you weren’t eligible for premium tax credits (subsidies) the last time you looked.

But thanks to the American Rescue Plan, many people who weren’t eligible for subsidies in previous years will find that they are now. Those subsidies are only available if you’re enrolled in a marketplace/exchange plan, and the current open enrollment period is your chance to make the switch to a marketplace plan.

In addition to being more widely available, premium subsidies are also larger than they were last fall. People who didn’t enroll last year due to the cost may find that coverage now fits in their budget.

Four out of five people shopping for coverage in the 33 states that use the federally-run marketplace (HealthCare.gov) will find that they can get coverage for $10/month or less. And millions of uninsured Americans are eligible for premium-free coverage in the marketplace, but may not realize this.

Waiting until the last minute to enroll in coverage will mean that you leave all that money on the table for January. You can use our subsidy calculator to get an idea of how much your subsidy will be for 2022. Then, make sure you enroll by December 15 so that you’re eligible to claim the subsidy for all 12 months of the year.

3. Letting your plan auto-renew? You might be in for a surprise.

If you already have coverage through the marketplace in 2021 and are planning to just let it auto-renew for 2021, you might wake up on January 1 with coverage and a premium that aren’t what you expected.

Even if you’re 100% happy with the plan you have now, you owe it to yourself to spend at least a little time checking out the available options before December 15. The premium that your insurer charges is likely changing for 2022. And your subsidy amount might also be changing, especially if there are new insurers joining the marketplace in your area.

Your insurer might also be making changes to your benefits, provider network, or covered drug list — or even discontinuing the plan altogether and replacing it with a new one. In short, the plan and price you have on January 1 might be quite different from what you have now.

This is part of the reason HHS opted to extend the open enrollment period – in order to give people a chance for a “do-over” if their auto-renewed plan isn’t what they expected. In nearly every state, you’ll have until at least January 15 to pick a new plan. But that plan selection won’t be retroactive to January 1.

4. Out-of-pocket expenses won’t transfer in February or March.

What if you’re enrolled in a marketplace plan in 2021, let it auto-renew for 2022, and then decide after December 15 that you’d rather have a different plan? Thanks to the extended open enrollment period, you can do that, and your new plan will take effect in February (or potentially March, if you’re in one of the state-run exchanges with the latest enrollment deadlines).

But it’s important to understand that you’ll be starting over with a new plan in February or March. This means the out-of-pocket costs counted against your deductible and out-of-pocket maximum will reset to $0, even if you ended up with out-of-pocket expenses in January.

Out-of-pocket expenses reset to $0 on January 1 for all marketplace plans, so your auto-renewed policy will start over with a new deductible at that point. But if you need medical care in January (and have associated out-of-pocket costs) before your new plan takes effect in February, you’ll potentially have a higher out-of-pocket exposure for the whole year than you would have if you’d picked your new plan by December 15 and had it start January 1.

All of this is a reminder that while most enrollees have until at least mid-January to sign up for 2022 coverage, it’s in your best interest to get your plan selection sorted out by December 15.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Congress boosted ACA subsidies. An enrollment surge followed.

The American Rescue Plan, signed into law by President Biden on March 11 of this year, included major boosts to the affordability of health plans sold in the ACA marketplace for people of all incomes.

Effective through 2022 and likely to be made permanent by pending legislation, the ARP improvements to affordability were as follows:

  • A benchmark Silver plan (the second least expensive Silver plan) with strong cost sharing reduction (CSR) subsidies became free to enrollees with household income up to 150% of the Federal Poverty Level (FPL) and costs no more than 2% of income for enrollees with income up to 200% FPL. That’s a maximum of $43 per month for a single person with an income of $25,520.
  • The previous income cap on subsidy eligibility was removed, so that no one who lacks access to affordable coverage elsewhere (i.e., from an employer) has to pay more than 8.5% of income for a benchmark Silver plan (less at lower incomes). The eliminated cap was 400% FPL ($51,040 for an individual, $104,880 for a family of four), and some households with income well above that level now qualify for subsidies.
  • The percentage of income required to buy a benchmark Silver plan was reduced at all income levels.
  • Anyone who received any unemployment insurance income during 2021 was eligible for free high-CSR Silver coverage. (Note that the pending legislation calls for this subsidy enhancement to be extended by several years, but not necessarily made permanent.)
open enrollment 2021

Our 2022 Open Enrollment Guide: Everything you need to know to enroll in an affordable individual-market health plan.

Preceding and then coinciding with these major subsidy boosts, the Biden administration had opened an emergency Special Enrollment Period (SEP) running from February 15 through August 15 in the 36 states that use the federal ACA exchange, HealthCare.gov.

The SEP, implemented to help Americans get covered during the pandemic, functioned like a second open enrollment period: anyone who lacked access to affordable coverage from other sources (e.g., employers) could enroll in a marketplace plan. The 15 state-based exchanges also opened emergency SEPs, with somewhat different durations and conditions, summarized here.

ARP prompted an enrollment surge during the 2021 SEP

The enhanced subsidies were posted on HealthCare.gov on April 1, and in the state-run exchanges within a few weeks of that date. Existing enrollees were encouraged to update their information and get the new subsidies credited, and were allowed to switch plans if they chose.

Americans responded with a major surge in new enrollment and enrollment upgrades. From February 15 through August 15:

  • More than 2.8 million people enrolled in new health coverage. Of new enrollees, 91% qualified for premium subsidies.
  • Of new enrollees, 44% obtained coverage for less than $10 per month. Most of these enrollees (41% in HealthCare.gov states) received free coverage with the highest level of CSR. As a result, the median deductible fell from $750 in 2020 to $50 this year – meaning that half of enrollees obtained a plan with a deductible at or below that level (most of them in high-CSR Silver plans).
  • The average premium paid by new consumers during the SEP (Feb. 15 – Aug. 15) fell 30%, from $117 in 2020 to $81 in 2021.
  • Marketplace enrollment in August 2021, at 12.2 million, was 15% higher than in August 2020, the previous August high, and 22% above the pre-pandemic August high (see p. 14 here) recorded in 2016.
  • More than 200,000 new and existing enrollees qualified for free high-CSR Silver plans because they had received unemployment insurance income in 2021.

Savings were also dramatic for existing marketplace enrollees:

  • 8 million existing enrollees reduced the premiums on their existing plans or obtained new plans after ARP implementation.
  • Existing enrollees reduced their premiums by 50%, or by $67 per month, on average.

My premium went down how much?

To get a sense of the extent to which the ARP reduced enrollee costs (or encouraged people who might previously have considered coverage too expensive to enroll), consider these examples:

  • In November 2020, a 40-year-old in Miami with an income of $24,000 per year would have paid $115 per month for the least expensive available Silver plan, with a $1,500 deductible, and $119 per month for the second-cheapest Silver plan, with a $0 deductible. Thanks to the ARP, those plans would now cost this person $26 and $30 per month, respectively.
  • In November 2020, a pair of 60-year-olds in Dallas, Texas with an income of $70,000 – slightly over the income cap for premium subsidies, which the ARP eliminated – would have had to pay $1,669 per month for the lowest cost Gold plan, with a $2,300 deductible (Gold plans are cheaper than Silver Plans in Dallas), or $1,228 for the lowest cost Bronze plan, with an $8,550 deductible.
    Now, this couple can choose to pay $393 per month for the Gold plan (which includes free doctor visits and generic drug prescriptions, neither subject to the deductible), or consider two free Bronze plans with deductibles over $8,000, a $2/month Bronze plan with a $6,100 deductible, and other options. A BlueCross Silver plan available for $420 per month might also be in the mix, if, say, the provider network is preferable.

Which states saw the biggest gains in new enrollees?

The new enrollment surge – and the savings – was particularly strong in twelve states that had not enacted the ACA Medicaid expansion as of June 2021. Due to their failure to expand Medicaid, these states have a “coverage gap” for people who earn too little to qualify for marketplace coverage (less than 100% FPL, or $12,760 for an individual in 2021) but mostly also don’t qualify for Medicaid because of their states’ restrictive Medicaid eligibility. (That excludes Wisconsin, which has not enacted the ACA expansion but grants Medicaid eligibility to adults with income up to 100% FPL. Oklahoma, which expanded Medicaid beginning in July 2021, and Missouri, which will begin covering new Medicaid expansion enrollees in October, are included.)

These twelve states – Alabama, Florida, Georgia, Kansas, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas and Wyoming – accounted for 1.55 million new enrollees during the SEP, or 55% of all new enrollees nationally.

In the non-expansion states, eligibility for marketplace subsidies begins at 100% FPL, as opposed to 138% FPL in Medicaid expansion states, where adults below that threshold qualify for Medicaid. Accordingly, in these states, about half of enrollees qualified for free high-CSR coverage, reporting incomes between 100% and 150% FPL. In these states, enrollment as of August 2021 (6.0 million) was 44% above enrollment in August 2019, the last pre-pandemic year (4.2 million).

More than 2 million people in non-expansion states are estimated to be stuck in the coverage gap – ineligible both for Medicaid and for ACA premium subsidies. For people in these states, reporting an income just below or just above 100% FPL ($12,760 for an individual, $26,200 for a family of four) is the difference between receiving no help at all and having access to free Silver coverage with high CSR and low out-of-pocket costs.

It’s important to keep in mind that the application for marketplace coverage requires an income estimate – and many people, unaware of the minimum income requirement, underestimate their potential income. For tips on how to make sure you leave no stone unturned in seeking help paying for coverage, see this post.

What do these numbers mean for 2022 open enrollment?

As open enrollment for 2022 approaches (it begins on November 1), the subsidies enhanced by the ARP remain in place for 2022. As Congress hashes out new investments for coming years in a pending budget bill, the pressure is intense to keep this good thing going in future years.

As of now, with the sad exception of those stuck in the coverage gap in states that still refuse to enact the ACA Medicaid expansion, any citizen or legally present noncitizen who lacks access to other forms of affordable coverage should be able to find it in the marketplace. If you need coverage, make sure to check out your options on HealthCare.gov or your state exchange.

The word that ACA marketplace plans are more affordable than ever has not yet reached many of the people who need coverage and qualify for premium subsidies. The Kaiser Family Foundation estimated in May that nearly 11 million uninsured people were subsidy-eligible. ACA enrollment assisters consistently report that many people who are eligible for coverage have no idea what’s on offer.

The Biden administration is trying to change that: after years of radical cuts in federal funds for enrollment assistance, the administration this year has allocated a record $80 million to fund nonprofit enrollment “navigator” groups charged with outreach as well as enrollment assistance. The Urban Institute forecast that if the ARP subsidies are made permanent – solidifying the perception that truly affordable coverage is here to stay — enrollment would increase by more than 5 million in 2022.

The emergency SEP provided a jump start, boosting coverage as of August more than 1.5 million above the August 2020 level. In a fraught and complex legislative session, Congress will most likely – though not certainly – do its part and extend the subsidies beyond 2022. There is certainly room for enrollment to run higher in the open enrollment season that begins on November 1.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

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Subsidy availability drives consumers to shop for health insurance

A major premise of the Affordable Care Act (ACA) was that Americans who need to buy their own health coverage in the individual market should be able to obtain coverage – regardless of their medical history – and that the monthly premiums should be affordable.

The rules to facilitate those goals have been in place for several years now. And although they have worked quite well for some Americans, there have been others for whom ACA-compliant health coverage was still unaffordable.

But the American Rescue Plan, enacted earlier this year, has boosted the ACA’s subsidies, making truly affordable coverage much more available than it used to be.

The numbers speak for themselves: Exchange enrollment has likely reached a record high of nearly 13 million people in 2021, after more than 2.5 million people enrolled during the COVID/American Rescue Plan enrollment window, which ended this month in most states.

How much are consumers saving on health insurance premiums?

And the amount that people are paying for their coverage and care is quite a bit lower than it was before the APR’s subsidy enhancements. We can see this across the states that use the federally run exchange (HealthCare.gov), as well as the states that run their own exchanges:

  • Among the people who enrolled during the recent special enrollment period in the 36 states that use HealthCare.gov, average after-subsidy premiums were 27% lower than the amounts people were paying pre-ARP.
  • Among HealthCare.gov enrollees who signed up during the special enrollment period or who updated their enrollments to claim the enhanced subsidies, 35% are now paying less than $10/month for their coverage.
  • Average deductibles for new HealthCare.gov enrollees were 90% lower than pre-ARP deductibles, likely driven in large part by the number of people who were able to enroll in free or low-cost Silver plans with built-in cost-sharing reductions. (This includes people receiving unemployment compensation in 2021, as well as people who aren’t eligible for Medicaid and whose household income is between 100% and 150% of the federal poverty level.)
  • The state-run exchange in Washington reported that 78% of their enrollees are now receiving premium subsidies, versus 61% before the ARP was implemented. And consumers with income above 400% of the poverty level, who were not eligible for subsidies pre-ARP, are now paying an average of $200 less in premiums each month. Washington’s exchange also noted that 15% of their enrollees are now paying $1/month or less for their coverage, versus only 5% whose premiums were that low pre-ARP.
  • The state-run exchange in California reported that consumers with household incomes between 400% and 600% of the poverty level are saving an average of almost $800/month on their premiums. (That’s an individual with income up to about $76,000, or a household of four with an income up to about $157,000.)
  • The state-run exchange in Nevada reported that people who enrolled or updated their account since the ARP was implemented are paying an average of $154/month in after-subsidy premiums, whereas the after after-subsidy premium at the end of last winter’s open enrollment period (pre-ARP) was $232/month.
  • Maryland’s state-run exchange reported a 12% increase in the number of enrollees receiving subsidies; more than 80% of Maryland’s current exchange enrollees are subsidy-eligible.

These examples highlight the improved affordability that the ARP has brought to the health insurance marketplaces. People who were already eligible for subsidies are now eligible for larger subsidies. And many of the people who were previously ineligible for subsidies — but potentially facing very unaffordable health insurance premiums — are benefiting from the ARP’s elimination of the income cap for subsidy eligibility.

How long will the ARP’s subsidy boost last?

Although the ARP’s subsidies for people receiving unemployment compensation in 2021 are only available until the end of this year, the rest of the ARP’s premium subsidy enhancements will continue to be available throughout 2022 — and perhaps longer, if Congress extends them.

This means that the affordability gains we’ve seen this year will be available during the upcoming open enrollment period, when people are comparing their plan options for 2022.

Robust ACA-compliant coverage will continue to be a more realistic option for more people, reducing the need for alternative coverage options such as short-term plans, fixed indemnity plans, and health care sharing ministry plans.

Even catastrophic plans – which are ACA-compliant but not compatible with premium subsidies – are likely to see reduced enrollment over the next year, since more people are eligible for enhanced subsidies that make metal-level plans more affordable.

Can everyone find affordable health insurance now?

Unfortunately, not yet. There are still affordability challenges facing some Americans who need to obtain their own health coverage. That includes more than two million people caught in the “coverage gap” in 11 states that have refused to expand eligibility for Medicaid, as well as about 5 million people affected by the ACA’s “family glitch.”

There are strategies for avoiding the coverage gap if you’re in a state that hasn’t expanded Medicaid, and Congressional lawmakers are also considering the possibility of a federally-run health program to cover people in the coverage gap.

Families affected by the family glitch have access to an employer-sponsored plan that’s affordable for the employee but not for the whole family – and yet the family is also ineligible for subsidies in the marketplace/exchange. (It’s possible that the Biden administration could tackle this issue administratively in future rulemaking.)

Have ARP’s subsidy boosts been successful?

With the exception of those two obstacles, the ARP has succeeded in making affordable health coverage a more realistic option for most Americans who need to obtain their own health coverage. We can see success in the record-high exchange enrollment, the increased percentage of enrollees who are subsidy-eligible, and the reduction in after-subsidy premiums that people are paying.

If you’re currently uninsured or covered by a non-ACA-compliant plan (including a grandfathered or grandmothered plan), it’s in your best interest to take a moment to see what your options are in the ACA-compliant market. Open enrollment for 2022 coverage starts in just two months, but you may also find that you can still enroll in a plan for the rest of 2021 if you live in a state where a COVID/American Rescue Plan enrollment window is ongoing, or if you’ve experienced a qualifying event recently (examples include loss of employer-sponsored insurance, marriage, or the birth or adoption of a child).

Even if you shopped just last winter, during open enrollment for 2021 plans, you might be surprised at the difference between the premiums you would have paid then and now. The ARP wasn’t yet in effect during the last open enrollment period, so if you weren’t eligible for a subsidy last time you looked, or if the plans still seemed too expensive even with a subsidy, you’ll want to check again this fall.

The subsidies for 2022 will continue to be larger and more widely available than they’ve been in the past, and you owe it to yourself to see what’s available in your area.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Lost your job? Here’s how to keep your health insurance or find new coverage now.

Most Americans under the age of 65 get their health insurance from an employer. This makes life fairly simple as long as you have a job that provides solid health benefits: All you need to do is enroll when you’re eligible, and if your employer offers a few options from which to choose, pick the one that best fits your needs each year during your employer’s annual enrollment period.

But the downside to having health insurance linked to employment is that losing your job will also mean losing your health insurance, adding stress to an already stressful situation.

The good news is that you’ve got options — probably several, depending on the circumstances. Let’s take a look at what you need to know about health insurance if you’ve lost your job and are facing the loss of your employer-sponsored health coverage.

Can I enroll in self-purchased insurance as soon as I’ve lost my job?

If you’re losing your job-based health insurance, you do not have to wait for the fall open enrollment period to sign up for a new ACA-compliant plan.

Although the COVID-related special enrollment window for individual/family health plans has already ended in most states, you’ll qualify for your own special enrollment period due to the loss of your employer-sponsored health plan.

This will allow you to enroll in a plan through the marketplace/exchange and take advantage of the subsidies that are available (and bigger than ever, thanks to the American Rescue Plan), without having to wait until 2022 to get coverage.

If you enroll prior to your coverage loss, your new plan will take effect the first of the month after your old plan ends, which means you’ll have seamless coverage if your old plan is ending on the last day of the month.

Your special enrollment period also continues for 60 days after your coverage loss, although you’d have a gap in coverage if you wait and enroll after your old plan ends, since your new plan wouldn’t take effect retroactively.

If you’re in that situation, you might find that a short-term health plan is a good option for bridging the gap until your new plan takes effect. Short-term plans won’t cover pre-existing conditions and are not regulated by the Affordable Care Act (ACA). But they can provide fairly good coverage for unexpected medical needs during a temporary window when you’d otherwise be uninsured.

Be sure to check your options again during open enrollment

If you sign up for coverage now in your special enrollment period, keep in mind that you’ll still need to re-evaluate your coverage during the upcoming open enrollment period, which begins November 1. Even though you’re enrolling fairly late in 2021, your new plan will reset on January 1, with new pricing and possibly some coverage changes. There also might be new plans available in your area for 2022.

So your special enrollment period (tied to your coverage loss) will be your opportunity to find the best plan to fit your needs for the rest of this year. And if you’re still going to need self-purchased coverage in 2022, the upcoming open enrollment period will give you a chance to make sure you optimize your coverage for next year as well.

COBRA (or state continuation) versus self-purchased coverage

Depending on the size of your employer, COBRA might be offered to you. And even if your employer is too small for COBRA, you might have access to state continuation (“mini-COBRA”), depending on where you live. Either of these options will allow you to temporarily continue the coverage you already have, instead of switching to a new individual-market plan right away.

If COBRA or state continuation is available, your employer will notify you and give you information about what you’ll need to do to activate the coverage continuation and how long you can keep it.

Normally, you have to pay the full cost of COBRA or state continuation coverage, including the portion that your employer previously paid on your behalf — which was likely the bulk of the premiums. But until the end of September 2021 (so for just one more month), as part of the American Rescue Plan (ARP), the federal government will pay the full cost of COBRA or state continuation coverage for people who involuntarily lost their jobs.

For much of this year, the soon-to-end COBRA subsidy has changed the calculus that normally goes into the decision of whether to continue an employer-sponsored plan or switch to a self-purchased individual/family plan. But after the end of September, the normal decision-making process will again apply. And you’ll have a special enrollment period when the COBRA subsidy ends, which will allow you to transition to an individual/family plan at that point if you want to.

COBRA coverage vs individual-market health insurance

Here’s what to keep in mind when you’re deciding between COBRA and an individual-market health plan – either initially, or after the COBRA subsidy ends on September 30:

  • ACA marketplace subsidies are now available at all income levels, depending on the cost of coverage in your area (the American Rescue Plan eliminated the income cap for subsidy eligibility for 2021 and 2022). And the subsidies are substantial, covering the majority of the premium cost for the majority of marketplace enrollees. Unless your employer is continuing to subsidize your COBRA coverage after the federal subsidy expires, you’ll probably find that the monthly premiums are lower if you enroll in a plan through the marketplace, as opposed to continuing your employer-sponsored plan.
  • Have you already spent a significant amount of money on out-of-pocket costs under your employer-sponsored plan this year? You’ll almost certainly be starting over at $0 if you switch to an individual/family plan, even if it’s offered by the same insurer that provides your employer-sponsored coverage. Depending on the specifics of your situation, the money you’ve already paid for out-of-pocket medical expenses this year could offset the lower premiums you’re likely to see in the marketplace.
  • Do you have certain doctors or medical facilities you need to continue to use? You’ll want to carefully check the provider networks of the available individual/family plans to see if they’re in-network. And if there are specific medications that you need, you’ll want to be sure they’re on the formularies of the plans you’re considering.
  • Will you qualify for a premium subsidy if you switch to an individual/family plan? If you do qualify, you’ll need to shop in your exchange/marketplace, as subsidies are not available if you buy your plan directly from an insurance company. (You can call the number at the top of this page to be connected with a broker who can help you enroll in a plan through the exchange.) And again, as a result of the ARP, subsidies are larger and more widely available than usual; that will continue to be the case throughout 2022 as well.

Free health insurance if you collected unemployment in 2021

If you’re approved for even one week of unemployment compensation in 2021, you qualify for a premium subsidy that will fully cover the cost of the two lowest-cost Silver plans in the marketplace/exchange in your area, through the end of the year.

The subsidy will also likely cover the full cost of many of the Bronze plans, and possibly some of the Gold plans, depending on the pricing of plans where you live. This is a special subsidy rule created by the ARP, for 2021 only.

In addition to the subsidy that will allow you to get a free Silver plan, it will also ensure that any of the available Silver plans have full cost-sharing reductions.

What if my income is too low for subsidies?

In order to qualify for premium subsidies for a plan purchased in the marketplace, you must not be eligible for Medicaid, Medicare, or an employer-sponsored plan, and your income has to be at least 100% of the federal poverty level. (As noted above, for 2021 only, you’re eligible for subsidies if you receive unemployment compensation, regardless of your actual total income for the year, as long as you’re not eligible for Medicaid, Medicare, or an employer’s plan.)

In most states, the ACA’s expansion of Medicaid eligibility provides coverage to adults with household income up to 138% of the poverty level, with eligibility determined based on current monthly income. So if your income has suddenly dropped to $0, you’ll likely be eligible for Medicaid and could transition to Medicaid when your job-based coverage ends.

Unfortunately, there are still 11 states where most adults face a coverage gap if their household income is below the federal poverty level. They aren’t eligible for premium subsidies in the marketplace (unless they’ve received unemployment compensation in 2021 and can thus qualify for 2021 subsidies).

This is an unfortunate situation that those 11 states have created for their low-income residents. But there are strategies for avoiding the coverage gap if you’re in one of those states.

And keep in mind that subsidy eligibility in the marketplace is based on your household income for the whole year, even if your current monthly income is below the poverty level. So if you earned enough earlier in the year to be subsidy-eligible for 2021, you can enroll in a plan with subsidies based on that income, despite the fact that you might not earn anything else for the rest of the year.

When open enrollment begins in November, you’ll need to project your 2022 income as accurately as possible, if you’re still needing to purchase your own coverage for 2022. But for the rest of 2021, you can use the income you already earned this year to qualify for subsidies.

What if I’ll soon be eligible for Medicare?

There has been an increase recently in the number of people retiring in their late 50s or early 60s, before they’re eligible for Medicare. The ACA made this a more realistic option starting in 2014, thanks to premium subsidies and the elimination of medical underwriting.

And the ARP has boosted subsidies and made them more widely available for 2021 and 2022, making affordable coverage more accessible for early retirees. That’s especially true for those whose pre-retirement income might have made them ineligible for subsidies in the year they retired, due to the “subsidy cliff” (which has been eliminated by the ARP through the end of 2022).

So if you’re losing your job or choosing to leave it and you still have a few months or a few years before you’ll be 65 and eligible for Medicare, rest assured that you won’t have to go uninsured.

You’ll be able to sign up for a marketplace plan during your special enrollment period triggered by the loss of your employer-sponsored plan. And even if you earned a fairly robust income in the earlier part of the year, you might still qualify for premium subsidies to offset some of the cost of your new plan for the rest of 2021.

You’ll then be able to update your projected income for 2022 during the upcoming open enrollment period; your subsidies will adjust in January to reflect your 2022 income.

And marketplace plans are always purchased on a month-to-month basis, so you’ll be able to cancel your coverage when you eventually transition to Medicare, regardless of when that happens.

Don’t worry, get covered

The short story on all of this? Coverage is available, and obtaining your own health plan isn’t as complicated as it might seem at first glance, even if you’ve had employer-sponsored coverage all your life.

You can sign up outside of open enrollment if you’re losing your job-based insurance, and there’s a good chance you’ll qualify for financial assistance that will make your new plan affordable.

You can learn more about the marketplace in your state and the available plan options by selecting your state on this map. And there are zero-cost enrollment assisters – Navigators and brokers – available throughout the country to help you make sense of it all.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Lost your job? Here’s how to keep your health insurance or find new coverage now. appeared first on healthinsurance.org.

The COVID SEP ended in most states. The ARP is still making premiums more affordable.

Although August 15 marked the end of a one-time COVID-related special enrollment period (SEP) for marketplace health insurance in most states, the enhanced subsidies that enticed millions of consumers are still available for many individual-market buyers (as noted below, the SEP is ongoing in some states).

The American Rescue Plan’s enhancements to the Affordable Care Act’s health insurance subsidies will continue long after the end of the COVID SEP. That means that when you do have an opportunity to buy coverage again – either through open enrollment or due to a personal qualifying life event – you’ll likely find individual health insurance much less expensive than you might have expected.

The ARP’s affordability provisions are still helping with premiums

As we’ve noted over the past few months, the American Rescue Plan included numerous provisions that make ACA-compliant plans more affordable than ever. The additional health insurance subsidy enhancements delivered by the ARP include:

All of those benefits continue to be available. The additional subsidies based on unemployment compensation continue through the end of 2021, while the other subsidy enhancements will be available through the end of 2022 (and possibly longer, if Congress extends them).

How popular are the ARP’s subsidy enhancements?

HHS reported last week that more than 2.5 million people had already enrolled in coverage during the COVID-related special enrollment period, and that another 2.6 million existing marketplace enrollees had activated their ARP subsidies.

Among all of the new enrollees, average after-subsidy premiums were just $85/month, as opposed to $117/month before the ARP’s subsidies became available. And across all of the new and renewing enrollees, about 35% had obtained coverage with after-subsidy premiums of less than $10/month.

That illustrates how substantial premium subsidies have become under the ARP. And again, nothing has changed about those subsidies: the special enrollment window has ended in most states, but the subsidies are still available if you’re eligible to enroll for the remainder of 2021 — and again during open enrollment for 2022, which starts November 1.

So if you’re in a state where enrollment is still open, or if you’re eligible for an individual special enrollment period in any state, it’s certainly in your best interest to see what plan options are available to you.

Enrolling as soon as you’re eligible will mean that you’re able to start taking advantage of the ARP’s subsidies right away, rather than having to wait for open enrollment and coverage that starts in 2022.

States where enrollment continues

Although the COVID SEP ended on August 15 in the states that use HealthCare.gov – and some of the states that run their own exchanges – enrollment is still actually ongoing in several states:

Enrollment if you have a qualifying life event

Not in one of those states? Special enrollment periods are available to individuals who experience a wide range of “life changes.” The most common trigger for a personal SEP is a loss of other coverage — usually job-based coverage.

(Note that there’s usually only a 60-day window to enroll in a new plan after losing other coverage. But HealthCare.gov is making an exception for people who lost their coverage as long ago as January 2020, if they missed their enrollment deadline because they were “impacted by the COVID-19 emergency.” People who need to utilize this flexibility have to call the marketplace directly to qualify for a special enrollment period on a case-by-case basis.)

In addition to a loss of coverage, there are also other situations in which you’ll qualify for a SEP. They include events such as the birth or adoption of a child, marriage (as long as at least one spouse already had minimum essential coverage), or even your grandmothered or grandfathered plan coming up for renewal.

More opportunities to enroll in ACA-compliant coverage

In addition to the states with ongoing COVID-related enrollment periods and the individual SEPs triggered by qualifying life events, there are other circumstances under which you might still be eligible to enroll in affordable health coverage:

Mark your calendar for 2022 open enrollment

If you don’t have an enrollment period now, be sure to mark your calendar for the start of open enrollment on November 1. That’s when you’ll be able to sign up for health coverage that will take effect in January, with coverage for essential health benefits and pre-existing conditions. During open enrollment, your medical history won’t matter, and neither will your coverage history.

And if you’re already enrolled in an ACA-compliant plan – or soon will be – you’ll still want to pay attention to open enrollment this fall. There are new insurers joining the marketplaces in many areas, which might have an unexpected effect on your premium subsidy. And even if you’re happy with the plan you have now, you might find that a different plan works better for the coming year.

Fortunately, the ARP’s subsidy enhancements will continue to be available for 2022. So if you’re eligible for subsidies – and most people are – your coverage for next year is likely to be quite affordable.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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How new carriers in your marketplace could affect your coverage options

Recent news about individual-market health insurance has been largely centered around the American Rescue Plan and how it’s made coverage in 2021 much more affordable than it used to be. Now, as we approach ACA’s annual open enrollment period, it’s a good time to look ahead to what we can expect to happen with 2022 coverage.

Fortunately, the ARP’s enhanced subsidies will still be in effect in 2022 – and possibly longer, if Congress can agree on an extension. That means subsidies will continue to be larger than they used to be, and more widely available, including to households earning more than 400% of the poverty level.

For 2022 individual/family coverage, we’re seeing some wide variation in proposed and finalized rate changes across the country. Average rates will decrease in some areas and increase in others, with modest single-digit rate changes in most places.

(Since the ARP has eliminated the income cap for subsidy eligibility for 2021 and 2022, few enrollees will see these rate changes reflected in their actual premiums, since most enrollees get premium subsidies. But rate changes do affect the size of the subsidy amount, and that can result in changes for after-subsidy premiums, as explained below.)

Increased insurer participation in marketplaces continues

But we’re also seeing widespread continuation of the increasing insurer participation trend that’s been ongoing since 2019. In 2017 and 2018, insurers fled the ACA’s exchanges – or even the entire individual/family market. But that started to turn around in 2019, and insurer participation increased again in 2020 and 2021.

For 2022, that trend is continuing. Some big-name insurers that previously scaled back their marketplace participation are rejoining various marketplaces, and some smaller regional insurers are joining marketplaces or expanding their existing footprints.

Where are new carriers entering ACA’s marketplace for 2022?

Here’s a summary of some of the major individual/family insurers that are entering new markets for 2022:

More carriers = more plan options …

That’s in addition to numerous coverage area expansions by existing marketplace insurers in many states. Based on the rate filings that we’ve analyzed thus far, we anticipate that many  – if not most – marketplace enrollees will have more plan options available for 2022 than they had this year.

One of the goals of the ACA was to increase competition in the individual health insurance market. The exchanges are set up to facilitate that, with enrollees able to compare options from all of the participating insurers and select the plan that best fits their needs.

From that perspective, increasing insurer participation and competition in the exchange is good. And it does give people more plans from which to choose, which can also be a good thing. But too many choices can overwhelm applicants and result in poor decision making.

… and a new carrier could also affect premium subsidies

In addition to delivering more plan options, carriers expanding into an area might also affect premium subsidies in that area. How much effect will depend on how the new plans are priced in comparison with the existing plans – keeping in mind that rates change each year on January 1 regardless of whether any new insurers are entering the market.

Premium subsidy amounts are based on the cost of the benchmark plan in each area. But since that just refers to the second-lowest-cost Silver plan, it’s not necessarily the same plan from one year to the next. If a new insurer enters the market with low-priced plans, the insurer may undercut the current benchmark and take over the second-lowest-cost spot. If the premium is lower than the benchmark plan’s price would otherwise have been, the result is smaller premium subsidies for everyone in that area.

For people in that area who prefer to keep their existing plan (as opposed to switching to the new lower-cost options), this can result in an increase in after-subsidy premiums, since the subsidies are smaller than they would otherwise have been. We can see an example of this in the Phoenix area in 2019 and 2020, when new insurers entered the market with lower-priced plans that reduced the size of premium subsidies in the area.

To clarify, anything that reduces the cost of the benchmark premium will result in smaller subsidies. This can be a new lower-cost insurer entering the market, or existing insurers reducing their rates. An example of this can be seen in how after-subsidy premiums increased for many of Colorado’s exchange enrollees in 2020, when the state’s new reinsurance program reduced average pre-subsidy premiums by about 20%. The reduction helped unsubsidized enrollees (mostly those with incomes over the limit for subsidy eligibility, which has been removed at least through 2022) but resulted in higher net premiums for many enrollees who qualified for subsidies.

Although the vast majority of exchange enrollees do qualify for premium subsidies (especially now that the American Rescue Plan has eliminated the “subsidy cliff” for 2021 and 2022) some enrollees do not. For these enrollees, the introduction of a new insurer simply broadens their plan options, and does not affect their premiums unless they choose to switch to the new plan.

And of course, if the new insurer has plans that are priced higher than the existing benchmark plan, the carrier’s entry will not affect net premiums paid by subsidized enrollees.

Plan to compare your coverage options during open enrollment

It will be several weeks before all the details are clear in terms of rate changes and plan availability for 2022 coverage. But it appears that the trend of increasing competition in the exchanges will continue.

And although the American Rescue Plan’s enhanced subsidy structure will still be in place in 2022 – making subsidies larger and more widely available than they would otherwise have been – it’s still possible for a new insurer to disrupt the market and end up adjusting the size of premium subsidies in a given area.

Open enrollment for 2022 coverage will begin November 1. Actively comparing your options during open enrollment is always the best approach, and that’s especially true if a new insurer will be offering plans in your area. Letting your current plan auto-renew without comparison shopping is never in your best interest.

If a new insurer is joining the marketplace, you may find that its plans are a perfect fit for your needs. Or you might find that your best option is to switch to a different plan because your after-subsidy premiums are increasing due to the new insurer undercutting the price of the current benchmark plan. Switching plans might be a non-starter due to your provider network or drug formulary needs, but you won’t know for sure until you consider the various options that are available to you.

Ask a professional how a new carrier could impact your coverage

We have an overview of factors to keep in mind when you’re choosing a health plan, but it’s also worthwhile to seek out professional advice. Enrollment assistance is available from brokers, enrollment counselors, and Navigators.

Brokers are licensed and regulated by state insurance departments, and must also have certification from the exchange in order to help people enroll in health plans offered through the exchange. Training and testing are necessary in order to obtain the license and certification, and brokers must also complete ongoing continuing education in order to maintain their credentials.

Broker training encompasses a wide range of topics, including ethics, fraud prevention, evolving insurance laws and regulations, and health plan details. The training and regulatory oversight make brokers a reliable source of information and assistance with initial plan selections and enrollments as well as future issues that might arise as the health plan is utilized.

Navigators should be much more widely available this fall, as the Biden administration has allocated $80 million for this year’s Navigator grants in the states that use HealthCare.gov. (The previous high was $63 million in 2016; the Trump administration subsequently reduced it to $36 million in 2017 and to $10 million each year from 2018 through 2020.) The Biden administration has also proposed a return to expanded duties for Navigators, which would provide consumers with increased access to post-enrollment assistance with their coverage.

In short, enrollment assistance should be widely available this fall, and it’s in your best interest to use it. A recent report from Young Invincibles highlights the myriad ways that enrollment assisters help consumers – it’s more than just picking a plan.

Regardless of where you seek assistance, it won’t cost you anything – and a broker, Navigator, or enrollment counselor will be able to help you determine the impact of any new insurers that will be offering plans in your area for 2022, and help you make sense of the options available to you.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Six strategies for avoiding the Affordable Care Act’s coverage gap

In eleven of the twelve states that have so far refused to enact the Affordable Care Act’s expansion of Medicaid eligibility (which the Supreme Court made optional for states in 2012), there’s good news and bad news for people who are seeking health insurance for 2022 and don’t earn a lot of income.

The good news is that COVID-19 relief legislation signed by President Biden in March of this year, the American Rescue Plan Act, vastly improved subsidies in the ACA private plan marketplace. Comprehensive coverage – a Silver plan with strong cost-sharing reductions –  is now free to many low-income Americans, and heavily subsidized for people who earn a bit more.

The bad news is that in states that have refused to enact the Medicaid expansion, the government still offers no help to people who report household incomes below the poverty line.

ACA’s coverage gap

The ACA’s creators intended for people in this income category to get Medicaid, but governors and legislators in the twelve “nonexpansion” states said no – even though the federal government foots 90% of the cost. More than 2 million low-income adults in these states are in the ACA’s coverage gap – eligible neither for Medicaid nor for help paying for coverage in the ACA private plan marketplace.

The remaining non-expansion states (excluding Wisconsin, which has no coverage gap,* and Missouri, where expansion is imminent) are as follows:

The minimum income to qualify for subsidized marketplace coverage in “nonexpansion” states is 100% of the federal poverty level (FPL). For enrollment in 2022, the cutoffs are as follows. (They are slightly lower for those still seeking coverage for the remainder of 2021.)

Persons in
family/household		 100% FPL
(minimum to qualify for coverage)
1 $12,880
2 $17,420
3  $21,960
4  $26,500

A Silver plan with strong cost-sharing reduction is free to enrollees with incomes between 100% FPL and 150% FPL. (In 2022, that’s $19,230 for an individual, $39,750 for a family of four.) At 150-200% FPL, Silver coverage costs no more than 2% of income.

At incomes above 200% FPL, the percentage of income required for a benchmark Silver plan rises with income to a maximum of 8.5% of income.  But again, in non-expansion states, subsidies are not available to people in households with incomes below 100% FPL.

Stumbling blind into the coverage gap

The application for coverage on HealthCare.gov – the federal marketplace for health coverage used by all of the non-expansion states (and 24 other states) – does not highlight the minimum income required for coverage. As a result, many low-income applicants who might expect to get federal aid find themselves confronted with a choice of plans quoted at full, unsubsidized cost – an average of $452 per month per adult for benchmark Silver coverage, unaffordable for almost all low-income enrollees.

Very few low-income enrollees know about the minimum income requirement, or know that their state legislatures and governors have denied them the Medicaid coverage that the ACA’s creators intended for them.

Many who work uncertain hours, or are self-employed, or do seasonal work, may not recognize how many variables go into their estimate of annual household income, which determines the size of subsidy – or whether a subsidy is available at all.

For applicants with incomes near the federal poverty line, knowing the stakes – that good coverage is free just above the 100% FPL threshold, and unaffordable just below that threshold – can make the difference between coverage and no coverage. For anyone not on a fixed salary, a good-faith estimate of next year’s income allows for some wiggle room. Many applicants may miss including allowable income sources, or fail to take fluctuations in their income into account, or otherwise miss the opportunity to claim a qualifying income.

A budget resolution introduced last week by Sen. Bernie Sanders proposes to create a new federal program that would offer insurance to people in this “coverage gap.” But with Democrats holding narrow majorities in both houses of Congress, their ability to create such a program is at best uncertain. Even if they do, it likely won’t go into effect in 2022.

Open enrollment for 2022 in non-expansion states begins on November 1 and HHS has proposed an end date of January 15. For those still seeking coverage in 2021, an emergency special enrollment period open to all who lack coverage ends soon – on August 15. After that date, you need a qualifying “life change” to get coverage for the remainder of 2021.

Six tactics for avoiding the coverage gap

Here is a checklist of strategies that may help you achieve eligibility for subsidized ACA coverage.

1. Know the eligibility cutoff.  As noted above, to qualify for subsidized coverage, an applicant must estimate an annual income for the coming year that’s above 100% of the Federal Poverty Level ($12,880 for an individual, $17,420 for a couple, etc. in 2022. See the list above.) This point can’t be emphasized enough, according to Shelli Quenga, Director of Programs at the Palmetto Project, a nonprofit health insurance brokerage in South Carolina.  “You need to know what amount you’re shooting for,” Quenga says. “You need to know where that line is. HealthCare.gov does not tell you.”

2. Use gross income, not net.  Many applicants don’t recognize these terms, which denote income before and after taxes. Gross income, which the application requires, is basically the largest number on the pay stub or tax form.

3. Consider earning more income if necessary.  When clients’ estimates fall short, Quenga will ask them what they can do to hit the target. “I’ll say, ‘Can you think of something you can do that’s going to earn you another $150 a month? Bake cakes? Clean houses? Mow grass? Do some babysitting? Provide some care to a nearby elderly person?’” Extra income of this sort can be entered on the application as self-employment, with wage income entered elsewhere.

4. Recognize uncertainty. The marketplace application for coverage provides a box to check “if you think your income will be difficult to predict.” That’s the case for many people – especially at low wages. If it’s hard to forecast how many hours you’ll work per week, how much you’ll make per hour (tips or overtime may make this variable), or how much work you’ll get if you’re self-employed, keep the eligibility threshold in mind as you estimate these factors.

5. Count everyone’s income. Household income includes income earned by everyone included in your tax return, including those who are not seeking coverage. Jennifer Chumbley Hogue, CEO of KG Health Insurance in Murphy Texas, cites the case of a woman in her early 60s whose husband is on Medicare and Social Security. “If your spouse is getting Social Security income, don’t forget to include it,” she says. That also holds for pensions, retirement accounts, and alimony (if awarded before 2019).

6. Consider how to count. The application allows you to estimate income on an hourly, weekly, twice-monthly, monthly or annual basis – and, if your income changes during the year, it invites you to estimate a different income for next year than for the current year. This flexibility allows you to take account of factors described below.

You can view the application on the HealthCare.gov site here. The income questions are on page 3. Note that the form recognizes the uncertainty involved in forecasting future income.

income changes on marketplace application

Considerations for individuals earning an hourly wage

If your income estimate is based on an hourly wage, consider the following questions:

  • Is the amount you and other workers in your household earned in the current month (or on the pay stubs you’re looking at) representative of what you are likely to earn throughout the year?
  • If you or a household member are a seasonal worker, have you fully accounted for that person’s likely full-year income?
  • Do you work more hours or earn more tips during the holiday season (or at other times of the year?) Have you fully accounted for that? Does anyone in the household take on a second job or temp job during the holiday season (or other season)? Have you included that income?
  • Do you sometimes get paid overtime?  Do the pay stubs you’re using to estimate income reflect that?
  • Do you have reason to anticipate a raise in the coming year? (For example, Florida will raise the state minimum wage to $10 per hour in September 2021, and to $11 per hour in September 2022).  If so, estimate your income on the basis of future pay rates.

Many who report income on an hourly wage basis work uneven and uncertain schedules. If a single person is unsure how many hours per week they’re likely to work, “I often tell them to put down 30 hours,” says Hogue – an amount that generally will qualify a solo applicant for coverage at an hourly wage of $8.50 or higher.

Strategies for the self-employed

Many of the low-income clients served by the Palmetto Project are self-employed, Quenga says. “Charleston is a huge destination wedding site. We have a lot of wedding planners, DJs, photographers, videographers.” Estimating next-year income is especially difficult if you’re self-employed, Quenga notes.

And for the self-employed, “Your projected income is your best guess of what you hope to earn.”  She notes that the self-employed are generally oriented toward minimizing their income for tax purposes. For the health insurance application, they have to reverse that mindset.

Considerations when estimating your income for 2022

When you apply for coverage for 2022 (or the remainder of 2021), you may have your 2020 tax return to refer to, as well as well  as pay stubs for at least 10 months’ income in 2021.  If the totals for 2020 or 2021 are below the eligibility cutoff, that’s not necessarily going to be true in the year following. When estimating income in this case, consider these questions:

Were your hours cut because of the pandemic? Regardless, can you realistically expect to work more hours in 2022 (or the remainder of 2021)? These questions apply to everyone in your household – that is, all who file taxes together and earn any income. If so, you can estimate a higher income for the coming year in good faith.

Should you check off allowable tax deductions?  The health insurance application asks about tax deductions that, if taken, reduce your gross income. The application points out that reporting these deductions “could make the cost of health coverage a little lower.” That’s true – if your income is above 150% FPL (Coverage is free up to that threshold.)

But if your income hovers near 100% FPL, these deductions could put your income below that threshold and disqualify you from subsidized coverage.  The deductions listed on the application are those taken for interest paid on student loans,  tuition and fees, retirement plan contributions, and alimony paid. If your income is near the cutoff, “do not check off a deduction that will put you under 100% FPL,” says Hogue.

If you were unemployed in any part of 2021 The American Rescue Plan provides free marketplace coverage in 2021 for any applicant who received any unemployment insurance income at any point in the year. After the emergency special enrollment period (SEP) ends on August 15, you will need to apply for a personal SEP to access this benefit – and do so within 60 days of having lost employer-sponsored coverage or experienced another qualifying life event. This particular benefit is not available in 2022.

What if your income estimate turns out to be higher than what you actually earn?

Low-income applicants may worry that they will owe large sums of money if their income estimate proves inaccurate. While those who underestimate their income do have to pay back a portion of their subsidy at tax time, that is not the case for those who overestimate income (in fact, if over-estimators pay any premium at all, they will get a partial refund).

If income for the year in question ultimately proves to fall below the 100% FPL threshold, there is no clawback of subsidies granted, unless the applicant’s income estimate is made with “intentional or reckless disregard for the facts.”

Your income estimate has to be good faith. You can’t make stuff up. But within the range of the realistically probable, you have leeway. “Suppose you mow grass for a living, and there was a drought,” Quenga posits. “You can’t control that. There is no penalty if you don’t end up hitting your target.”

Who’s checking your income anyway?

The ACA exchanges do check applicants’ income estimates against data sources such as employer records. In 2019, the Trump administration implemented a rule requiring the ACA exchanges to demand income documentation from applicants who claimed an income above 100% FPL if “trusted data sources” indicated an income below the threshold. If the enrollee failed to provide the documentation, the federal subsidy would be cut off, and the enrollee would likely lose coverage due to the unaffordability of the unsubsidized premiums.

But that rule was challenged in court, and in March 2021 a federal court ordered the Department of Health and Human Services (HHS) to rescind it. HHS responded promptly, rescinding the documentation requirement this past May. HHS did warn that its computer systems could not be retooled instantly, so that for some time, a request for income documentation would be sent in this situation. But HHS added that it would send a follow-up communication to the enrollee, saying that documentation was not required.

The ACA’s creators did not intend to shut poor Americans out of its benefits. But governors and state legislatures that refuse to enact the ACA Medicaid expansion do willfully perpetuate the coverage gap. Low-income people in non-expansion states should use every tool available to produce a good faith income estimate that will give them access to quality government-subsidized health insurance.

* * *

* States that enact the ACA Medicaid expansion offer Medicaid to all legally present adults with household incomes up to 138% FPL. Wisconsin, uniquely, offers Medicaid to adults with incomes up to 100% FPL – which is also the bottom threshold for subsidy eligibility in the private plan marketplace. No one, therefore, is excluded from aid on the basis of income.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

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Maddox Insurance Agency

Insurance Agency in Memphis, Tennessee

Main Office

2151 Courtland Place | Memphis, TN 38104

Licensed in Tennessee, Mississippi & Arkansas

Contact

Phone: (901) 335-0154
Fax: (901) 255-9141

Lee.Maddox@maddoxinsured.com

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