2018 Open Enrollment: 10 things you need to know about health insurance

Insulin pumpOpen enrollment is approaching! Individuals who do not have healthcare insurance through their employer can sign up for coverage between November 1 and December 15, 2017. Due to the high cost of medical care, health insurance is an important issue for the diabetes community. (Medical expenditures for people with diabetes are about 2.3 times higher, on average, than for people without diabetes). Healthcare continues to make headlines in the US, and it can be difficult to keep track of what’s new or what has changed.

Today’s guest blogger, Tony Steuer, has been an author, consultant, subject matter expert and consumer advocate in the insurance industry for 30 years. He is the author of A Health Insurance Roadmap and the Change.org petition Fair Health Insurance for All. In today’s blog post, Tony talks about significant changes in the healthcare landscape, and shares the 10 things you need to know about health insurance today:

Open enrollment for individual health insurance policies is coming up. It is important to be aware of significant changes that will impact those applying for new coverage or changing coverage. Being familiar with these changes, will help you successfully keep your health insurance and/or enroll. Since January, there have been multiple attempts to formally repeal the Affordable Care Act which all ultimately failed in the Senate. Unfortunately, there is a clear trend that steps are being taken to weaken the ACA. Here are 10 things you need to know:

1. The Affordable Care Act remains in place

Keep in mind that the ACA and Obamacare are the same thing. Any references that the ACA or Obamacare are failing or dead are not true. Due to the hard work of multiple state insurance commissioners, as 2018 Obamacare deadline nears, U.S. states believe every county covered.


2. The Affordable Care Act is in danger

There is no further pretense, it is Trump vs. the Affordable Care Act. Failing to work with Congress, Trump has through Executive actions and the announcement to terminate the payment of cost sharing subsidies, thrown the entire health insurance ecosystem into greater chaos. The termination of the cost-sharing subsidies is a short-term issue while the executive actions are slightly longer term.

These actions will cause further instability in the health insurance marketplace as it almost certain that less people will enroll in health insurance plans this year. The reduction will mostly come from younger, healthier people which will lead to a pool of people who have health issues and will have higher claims. Higher claims mean higher premiums. And higher premiums will lead to less enrollees leading to a tougher, but not failing market.

Micheal Che of Saturday Live summed it up accurately with the comparison of Trump tweeting: “The Democrats ObamaCare is imploding. Dems should call me to fix” to Godzilla tweeting: “Tokyo is totally imploding right now. I alone can solve!”.


3. Cost Sharing Reduction (CSR) payments are being terminated

Insurance companies must continue to offer policies with subsidized premiums to those who qualify (58% of the 11.1 million Americans enrolled in ACA plans). The ACA requires insurers to charge lower out-of-pocket costs low-income consumers and the CSR payments compensate insurance companies for doing so. So, CSR payments are not a bail-out for insurance companies.

Insurers have already filed their premiums rates for 2018. Insurance companies can still attempt to raise rates or even pull out of some markets. The loss of the CSR’s is a huge cost for any insurance company that didn’t price in the possibility of the CSR’s being eliminated into their premiums. However, given that Trump has consistently threatened to not make the CSR payments, insurance companies have for the most part taken this into account, in other words, they were not surprised.

Insurance companies can terminate their contact with the federal exchange if cost sharing reductions are terminated. However, they are still subject to state laws on withdrawing from the marketplace which limits their ability to withdraw as they can only terminate their exchange enrollees if they fail to pay their premiums which many people would likely do if an insurance company left the exchange and they no longer received the APTC.

A number of states allowed insurance companies to file dual rates with one set assuming CSR’s and the other set assuming no CSR’s and some states had already ordered insurance companies to add a surcharge to cover the potential loss of CSR’s, for example California required an additional 12.4% surcharge on silver plans. To find out how your state is allowing insurance companies to deal with the uncertainty over cost sharing reductions, check out this compilation of data.


4. Increased Tax Credits for those who qualify (84% of enrolled)

The ACA includes an additional subsidy that is designed to reduce the cost of premiums, ensuring that family budgets are largely unaffected. These tax credits are called the Advance Premium Tax Credit (APTC). CSR payments are applied only to silver plans. Insurance companies will add a premium surcharge then to the silver plans. Silver plans are the basis for the amount of the APTC that consumers receive. So an increase in the silver premium will be offset by an increase in the APTC for most consumers. Because of the application of the CSR linked premium surcharge to silver-tier plans, then nearly four out of five consumers will actually see their premiums remain the same or decrease as the amount of premium assistance they receive will rise.

To qualify for the APTC, your income must be between 133% and 400% of the federal poverty level. For those who do not qualify for Advanced Premium Tax Credits, they will be most heavily impacted by premium increases. Since more people qualify for APTC’s, the net cost to the federal government will actually rise. Find out if you qualify for the APTC here.

In fact, Trump’s action would lead to an increase in enrollments in ACA plans in many states, including California, where about 90% of enrollees pay subsidized premiums. Covered California, the state’s Obamacare exchange, calculated in January that the reduction in net, or after-subsidy, premiums in gold, platinum and bronze plans resulting from the higher subsidies would lead to an enrollment increase of 20,000 people, or 1.4% in subsidized plans. The flip side is that the change would batter the unsubsidized population — those with income higher than 400% of the poverty level. Covered California reckoned that 6,000 unsubsidized enrollees would drop their coverage.

According to a report by the Congressional Budget Office released in August, “The Effects of Terminating Payments for Cost-Sharing Reductions” this will result in about 1 million less people covered in 2018. However, by 2020, the effect on coverage would stem primarily from the increases in premium tax credits, which would make purchasing non-group insurance more attractive for some people. As a result, a larger number of people would purchase insurance through the marketplaces, and a smaller number of people would purchase employment-based health insurance. The CBO report does not take into account the other changes made by Trump and his administration.


5. Increased premiums for those in Silver Plans in 2018

Silver plans are the only plans that qualify for cost sharing subsidies. Without the CSR’s, silver plans may no longer be the best choice for many people.


6. The individual mandate remains in place

The individual mandate remains in place, and there is a minimum penalty of $695 for adults and of $347.60 for children under age 18, for not having health insurance. The maximum tax penalty is $2,085 per household.  The IRS has announced that they will not accept a return that does not have the health coverage question completed.


7. Shorter open enrollment period

Open enrollment for 2017 will last for 6 weeks rather than 12 weeks in previous years. Open enrollment starts on November 2017 and ends on December 15, 2017 (6 weeks). It is important to act quickly and to be aware of this much earlier deadline. This the only time when you are able to change to a completely new plan on the public marketplace or switch cover tiers with changes taking effect on January 1st. There are special enrollment periods for those who meet certain criteria such as losing group health insurance coverage. Also, certain state exchanges have longer open enrollment periods. For example, California’s enrollment runs through January 15, 2018.

Note: Insurance companies were in favor of this as the hope is it would encourage healthier people to enter the risk pool. This was also a recommendation in my Health Insurance Roadmap in conjunction with limiting special enrollment periods as this encourages people to keep their policies throughout the year (and paying premiums) rather than hopping in and out of the risk pool.


8. Reduced access to healthcare.gov

The US Department of Health and Human services (HHS) has announced that it will shut down the federal exchange site for 12 hours for all but one Sunday during the open enrollment season (December 10th) as well as on the first day of open enrollment (November 1st). 36+ states use healthcare.gov for their marketplace.

HHS has reconfigured its website to make enrollment information harder to access.This limited access could have a secondary impact of additional website outages with greater numbers of people using the site at one time compounded by the shorter enrollment period. Website key point: More than 12 million people enrolled on the state and federal marketplaces for 2017 coverage with 9 million of those enrollments being on the federal exchange.


9. Reduced outreach funds

Marketplace outreach funds have been significantly reduced by 90 percent (from $100 million down to 10 million). Budgets have been restricted to mostly being online – so no television, radio or print ads. So, don’t wait for any advertising for HealthCare.gov.

The administration, earlier this year, pulled paid advertising for the sign-up website HealthCare.gov. The Department of Health and Human Services has instead produced videos designed to undermine public support for “Obamacare” with funds that were intended to help promote enrollment in the ACA. These “testimonial videos” feature individuals claiming to be harmed by the ACA. These actions have prompted an inquiry by a federal inspector general into these decisions and whether they have impacted sign-ups negatively.

(Note: California residents enroll through Covered California, not HealthCare.gov)


10. Less help with open enrollment

Consumers will receive less help with open enrollment, due to a number of factors:

Funding cuts to navigators

A navigator is an individual or organization that’s trained to help consumers, small businesses, and their employees look for health coverage options. Funding for navigators may be cut by 90%. This reduces the ability to get advice to review different plans. For the most recent open enrollment period at the end of 2016, Navigators received over $62.5 million in federal grants. They enrolled 81,426 individuals for an approximate cost per enrollee of $768. For this open enrollment period, CMS plans to spend $10 million on education activities. (Source: CMS Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period.)

Funding cuts for in-person outreach

Funding for in-person outreach has also been cut in half, from $62.5 million to $36 million. The Trump administration has ended contracts with firms who have provided in-person assistance to states using healthcare.gov.

Reduced participation in open enrollment events

Regional representatives from the DHS will not be participating in open enrollment events in states and with health advocacy groups as they have in the past. This means they will not longer be able to reach uninsured populations by helping with sign-ups in terms of explaining, enrolling and shopping.

Here’s what DHS press secretary Caitlin Oakley had to say last month: “Marketplace enrollment events are organized and implemented by outside groups with their own agendas, not HHS. These events may continue regardless of HHS participation.” She went on to say, “As Obamacare continues to collapse, HHS is carefully evaluating how we can best serve the American people who continue to be harmed by Obamacare’s failures.”
Navigators from multiple states are reporting issues with the online, training certification videos.

According to Sheila Quenga, director of the Palmetto Project, software programs are occurring more frequently than in the past and that it can take weeks before CMS resolves an issue. This is the Latest Snag In ACA Sign-Ups: Those Who Guide Consumers Are Hitting Roadblocks.


Now that you know about these significant changes in the healthcare landscape, what can you do? Stay tuned for part 2 of Tony’s guide to the 2018 Open Enrollment.

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