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 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.
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.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2021/08/income-changes.jpg2142171wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-08-13 14:00:372021-08-13 15:00:28Six strategies for avoiding the Affordable Care Act’s coverage gap
Each year, HHS issues a set of rules and guidelines that apply to the health insurance exchanges created by the Affordable Care Act, and to the health plans that are sold in the individual/family market. The rule-making process includes a proposed rule, a public comment period, and then a final rule. This is normally a fairly straightforward process, but it’s been more complicated for the upcoming 2022 plan year.
The Trump administration issued the proposed 2022 rules in late November last year, and finalized some of them in January, just before inauguration day. In May, the Biden administration finalized the rest of the proposed rule changes, but noted that they intended to propose a new set of rules, with a new public comment period, in order to revisit some of the changes that had been finalized by the outgoing administration.
Some of the new proposals are direct reversals of the rule changes that the Trump administration had made. Others are new ideas that are designed to help more people gain access to affordable health insurance. For various provisions, HHS notes that there are pros and cons to the proposals they’re making, and are seeking public feedback before any rules are finalized.
As is always the case, some of the proposed rules are more “behind the scenes” and wouldn’t be particularly noticeable to consumers. But there are some that would directly affect consumers, mostly by making it easier to enroll in health coverage.
How about an extra month of open enrollment?
For the last several years, the standard open enrollment period has been set at November 1 – December 15. This is the schedule that’s used by HealthCare.gov (the exchange/marketplace in 36 states), although Washington, DC and 14 states run their own exchange platforms and most of them tend to extend open enrollment.
HHS has now proposed adding an extra month to open enrollment, so that it would continue through January 15 instead of ending in mid-December. If finalized, this rule change would take effect for the upcoming open enrollment period that starts in November, for coverage effective in 2022.
HHS clarifies that the intent here is to give people more time to enroll, and give enrollment assisters more time to help everyone who needs it. They also point out that some people don’t realize how much their premiums might change from one year to the next, and are caught off guard when they get their invoice in January. By that point, however, it’s normally too late to change plans, and people might end up dropping their coverage altogether if it’s become too expensive. By giving people until January 15 to enroll, there’s time for a “do-over” if a policy was allowed to auto-renew and then ended up being more expensive than expected.
On the other hand, HHS notes that when enrollment ends in mid-December, everyone has full-year coverage, with policies that take effect in January. If enrollment is extended until mid-January, some enrollees will have coverage that takes effect in February instead. Most of the state-run exchanges already offer this, but it would take additional outreach and communication to ensure that consumers are aware that they would still need to enroll by mid-December in order to have coverage in effect as of January 1.
Year-round enrollment for people with income up to 150% FPL
HHS has proposed an ongoing enrollment opportunity for applicants with household income that doesn’t exceed 150% of the federal poverty level. If finalized, this would allow eligible applicants to enroll in coverage at any time of the year. (Under current rules, enrollment outside of the normal open enrollment period requires a special enrollment period, triggered by a qualifying life event).
This enrollment opportunity would be offered through the federally run exchange (HealthCare.gov), and state-run exchanges would have the option to offer it. HHS has clarified that it’s uncertain whether this could be added as an option for the 2022 plan year. It might need to be delayed until 2023 to give health plan actuaries adequate time to prepare for this change.
The American Rescue Plan, enacted earlier this year, has enhanced the ACA’s premium tax credits (premium subsidies) for 2021 and 2022, providing more financial help for people who buy their own health insurance. As a result, households with income up to 150% of the federal poverty level are eligible for subsidies that fully cover the cost of the benchmark plan.
That means they can select either of the two lowest-cost Silver plans and have no monthly premium. (They will also tend to have access to a variety of premium-free Bronze plans, and possibly some premium-free Gold plans. But Silver plans are generally the best option for people in this income range, due to the robust cost-sharing reductions that come with Silver plans.)
HHS notes that the enhanced premium subsidies would help to prevent adverse selection, since most applicants with household income up to 150% of FPL would be able to enroll in Silver plans — with strong cost-sharing reductions — without premiums. This means that they would be unlikely to drop their coverage after receiving medical care, as they would not have to pay anything to keep the coverage in force. (This would be applicable for 2022, assuming the year-round enrollment option could be added for 2022. For 2023 and future years, the availability of zero-premium Silver plans will depend on whether Congress extends the American Rescue Plan’s subsidy enhancements.)
However, HHS does note that some enrollees with income up to 150% of FPL do have to pay at least minimal premiums for the benchmark plan. This includes people in states where additional services beyond essential health benefits are required to be covered (and thus the premium subsidy doesn’t cover the entire cost of the benchmark plan) as well as applicants who are subject to a tobacco surcharge.
And it’s also possible for a person earning up to 150% of FPL to purchase a Silver plan that’s more expensive than the benchmark plan, and thus have a monthly premium even after the subsidy is applied.
It’s possible that there could be some adverse selection among these populations, with enrollees potentially dropping their coverage or shifting to a lower-cost plan after their medical needs are resolved. HHS is seeking public comments about how to best approach this.
It’s worth noting that Medicaid and CHIP enrollment is already available year-round, as is Basic Health Program enrollment in the two states where it’s available. In most states, Medicaid is available to adults under age 65 with household income up to 138% of the poverty level. The income caps are higher for children to qualify for Medicaid, and CHIP is available to children (and in some cases, pregnant women) in many middle-class households.
So a family with low or modest income can obtain coverage year-round in most states — for the children, and possibly the adults. This is true even though many CHIP programs — and some Medicaid programs — charge premiums. Extending open enrollment to run year-round for subsidy-eligible applicants with household income up to 150% of the poverty level would essentially just be an expansion of the enrollment eligibility rules that already exist for lower-income households.
Including the ACA’s expansion of Medicaid, health insurance exchanges, and Basic Health Programs, ACA enrollment now encompasses about 10% of all Americans. But there are still millions of Americans — most of whom have fairly low incomes — who are uninsured and possibly unaware of the financial assistance that’s available to them. HHS is working to make coverage as accessible as possible to this population, and the proposed year-round enrollment window is part of that approach.
Standardized plans return to HealthCare.gov for 2023
Five years ago, HealthCare.gov debuted standardized health plans, dubbed “Simple Choice” plans. The idea was to make it easier for consumers to compare apples to apples when looking at multiple health insurance policy options.
The Trump administration finalized a rule change in 2018 that eliminated Simple Choice plans starting with the 2019 plan year. So HHS did not create standardized plan designs for the last few years.
The 2018 rule change that eliminated standardized plan designs on HealthCare.gov was vacated by a court ruling earlier this year, as were three other provisions of the 2018 rule. So HHS is starting the process of once again creating standardized plans and gathering public feedback on how to best proceed.
And earlier this month, President Biden issued a wide-ranging executive order aimed at promoting competition in the U.S. economy. One of its provisions calls for HHS to “implement standardized options in the national Health Insurance Marketplace and any other appropriate mechanisms to improve competition and consumer choice.”
When standardized plans were previously available in the federally run exchange, it was optional for insurers to offer them and insurers were also free to offer a variety of non-standardized plans. The specifics of their reintroduction are unclear at this point, but the proposed rules seem to indicate that the plans, which are expected to be available for the 2023 plan year, will continue to be optional for insurers.
Consumer protection rules
Some of the other proposed rule changes are designed to protect consumers, although their implementation might not be obvious.
Over the last few years, HHS had implemented several regulatory changes that would have eroded various consumer protections or created confusion in the marketplace. But these rules have either been blocked by the courts or had little in the way of interest from states. And now HHS has proposed a reversal of some of them:
Insurers are required to collect at least $1/month in premiums to cover the cost of non-Hyde abortion coverage if it’s offered by a health plan. Premium subsidies can’t cover this amount, and insurers must keep the funds segregated from the rest of the premiums they collect. But a previous rule change required insurers to actually send separate invoices for this amount. A judge blocked that rule last year before it took effect, noting that it would lead to widespread consumer confusion. And now HHS is proposing that the rule simply be eliminated altogether. Insurers would still have to segregate the premiums for abortion services, and they still cannot be covered by premium subsidies. But no separate invoice would be required.
The consumer protection guardrails for 1332 waivers were significantly relaxed in 2018. Few states had expressed interest in utilizing the new rules (the vast majority of 1332 waiver proposals have continued to be for reinsurance programs), but HHS is now proposing that the more stringent 1332 waiver guardrails be restored.
In January, the outgoing Trump administration finalized a program known as “Exchange Direct Enrollment,” designed to allow states to abandon their ACA-created exchanges altogether and rely instead on broker and insurer websites. (Note that this is not the same thing as enhanced direct enrollment, which continues to be an option utilized by dozens of enrollment entities.) HHS has now proposed eliminating the Exchange Direct Enrollment option. The public feedback on the Exchange Direct Enrollment program was almost entirely negative, and no states had expressed an interest in pursuing this idea. (Georgia had already received approval for a 1332 waiver utilizing this concept. That approval is now under review by the Biden administration.)
The final version of the new rules is expected to be published within the next few weeks. We won’t know the status of these proposed rule changes until then, but the proposed changes we’ve discussed here are fairly likely to be finalized, albeit with possible modifications based on public comments that HHS received.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-08-06 19:59:422021-08-07 15:01:08Longer enrollment tops list of proposed marketplace improvements
This spring and summer, more than 2 million Americans have already flocked to the health insurance marketplaces in their states, enticed by larger health insurance subsidies during a one-time special enrollment period (SEP). This SEP was created to address the COVID-19 pandemic and allow people to take advantage of the extra subsidies created by the American Rescue Plan (ARP).
But this limited enrollment opportunity is about to end in most states.
There are a few state-run exchanges where the COVID-related SEP has already ended, and a few others where it extends past August 15. But in most of the country, August 15 is the last day to sign up for 2021 coverage without needing to show proof of a qualifying life event.
How many people bought individual health insurance during the SEP?
HHS reported that 2.1 million people had already enrolled in coverage under this SEP by the end of June. This is two to three times higher than typical enrollment volume during that time of year (when a qualifying event would normally be necessary).
Once the COVID/American Rescue Plan special enrollment period ends in your state, regular individual-market enrollment rules will apply. This means that you’ll need a qualifying event in order to enroll in coverage with a 2021 effective date.
The next open enrollment opportunity will start nationwide on November 1, but that enrollment period will be for coverage that takes effect January 1, 2022.
Why review your coverage before the SEP deadline?
Even if you’re already enrolled in a health plan through the marketplace in your state and you’re happy with your coverage, you should take a few minutes to double check everything before the SEP ends.
You can update your account to make sure that you’re receiving the enhanced subsidy amount available under the ARP. And if you need to switch plans to best take advantage of that subsidy, now’s your chance to do so.
This could be the case, for example, if you’re newly eligible for cost-sharing reductions because you’ve received unemployment benefits this year. (You need to be enrolled in a Silver plan to receive that benefit.)
It could also be the case if you’re currently enrolled in a plan that costs less than your new subsidy amount. You might find that you can upgrade your coverage and still have minimal premiums each month.
If you’re enrolled through HealthCare.gov and you don’t update your account to activate the new subsidies, you should still see your subsidy amounts updated as of September. HHS will be updating accounts in August to align the ARP’s subsidy structure with the income amounts that enrollees had previously projected for 2021.
This will be helpful in terms of giving people more affordable coverage for the final few months of the year, as opposed to having to wait until tax season to claim the extra subsidy. But there will be no opportunity to change your 2021 coverage at that point, unless you have a qualifying event.
Why should you enroll now if you haven’t already?
Millions of Americans are already enrolled in health coverage through the exchanges. But there are still millions more who are uninsured or enrolled in non-ACA-compliant coverage such as short-term health plans or health care sharing ministry plans.
If that’s you or someone you know, the current enrollment period is an excellent opportunity to make the switch to comprehensive major medical health insurance. And chances are, it’ll be less expensive than you’re expecting, especially if it’s been a while since you checked your coverage options.
People who have received even one week of unemployment compensation this year are eligible for full premium subsidies and cost-sharing reductions. That means they can get a free (or nearly free) Silver plan, but the benefits will be upgraded to platinum-level.
Will my premiums be higher if I wait until November?
The current SEP is for 2021 coverage, whereas the open enrollment period that starts in November will be for 2022 coverage. If you buy health coverage now, you’ll be locking in your premiums for the rest of this year.
In January 2022, your premium is likely to change, though we don’t yet have a clear picture of exactly how premiums will be changing. Across the states where rate filings have been made public, we’re seeing insurers proposing mostly single-digit rate increases, although there have also been some decreases and a handful of larger increases proposed.
But since most marketplace enrollees receive premium subsidies, changes in benchmark premium prices (and the related changes in subsidy amounts) will play a significant role in how much your net premiums change for 2022.
Should I enroll before the deadline if I’m uninsured?
If you’re uninsured, there’s no benefit to skipping coverage now and waiting for the start of open enrollment. That will just guarantee that you won’t have coverage in place until January, and your 2022 premium will be the same either way.
If a sudden and serious health condition were to arise while you’re uninsured, you would have no way to obtain coverage that starts before January 2022 unless you experience a qualifying event.
When will my coverage start if I enroll during the SEP?
As is always the case, your coverage won’t take effect immediately. If you enroll during the current SEP in most states, your plan will take effect the first of the following month.
How long will my coverage last if I enroll by the SEP deadline?
ACA-compliant individual/family health plans renew each year on January 1. This is true regardless of when you sign up for the plan. So if you’re enrolling during the current SEP, the specifics of your health plan – including the monthly premium – will remain the same through the end of December. (Note that your after-subsidy monthly premium could change if your income changes later in the year.)
At that point, your plan will likely be available for renewal for 2022, but the premiums and the coverage details might change. So for example, the deductible and out-of-pocket limit might change, and your premium will almost certainly change – due to both the change in your own plan’s premium, as well as changes to your subsidy amount caused by fluctuations in the benchmark premium amount in your area.
If I enroll now, do I need to enroll again in November?
Instead, you should plan to spend at least a few minutes this fall comparing your options for 2022. Even though the open enrollment window is just around the corner (it starts November 1) the options for 2022 might be very different from what you’re seeing right now for the rest of 2021. Insurers are joining the marketplaces in many states, and existing insurers are expanding their coverage areas.
That can affect plan availability as well as subsidy amounts, so you’ll want to plan to spend some time reconsidering your options for 2022.
Is there any way to enroll in 2021 coverage after August 15?
In California, DC, New Jersey, New York, and Vermont, the COVID-related special enrollment period is already scheduled to extend past August 15. (In Vermont, this applies to uninsured residents. Current enrollees who wish to switch plans must do so by August 15.) But even in those states, it’s in your best interest to enroll sooner rather than later, in order to take advantage of the enhanced subsidies that are available under the American Rescue Plan.
After August 15, in most states, you’ll need a qualifying event to be able to sign up for coverage that starts prior to January 2022. You’ll have access to open enrollment this fall, but that coverage won’t take effect until January, even if you enroll right away on November 1.
What do I need to do if I’m getting a COBRA subsidy?
The American Rescue Plan’s COBRA subsidy continues through the end of September. Assuming your COBRA or state continuation coverage is eligible to continue past that date, you’ll have the option to keep it by paying the full premiums yourself as of October, or switch to a self-purchased individual/family plan instead.
If you’re choosing to switch to a new plan when the COBRA subsidy ends, you’ll want to pay close attention to details regarding any deductible and out-of-pocket costs you’ve accumulated this year. As a general rule, you should assume that those will reset to $0 when you switch to an individual market plan. But it’s possible that your insurer might allow you to transfer them if you switch to an individual plan offered by the same insurer that provides your group coverage.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-08-01 02:31:252021-08-01 15:01:19Why you should care about the August 15 special enrollment deadline
The ARP ensures that Americans who receive unemployment compensation at any time in 2021 can enroll in a premium-free Silver plan with full cost-sharing reductions. (If you’re eligible for this benefit but enrolled in a non-Silver plan, you’ll need to switch to a Silver plan in order to take advantage of the cost-sharing reductions. In most states, you have until August 15, 2021 to make this change.) It also provides subsidies to cover the full cost of COBRA or state continuation coverage, through September 2021, for people who involuntarily lose their jobs or have their hours reduced.
To allow people an opportunity to access the enhanced premium subsidies in the marketplace, there’s a one-time special enrollment window that continues through August 15, 2021 in most states. Largely as a result of this enrollment opportunity and the ARP’s subsidy enhancements, effectuated enrollment in the marketplaces nationwide has almost certainly reached a record high, with an estimated 1.65 million people enrolling during the first three-and-a-half months of the special enrollment period.
ARP subsidies particularly valuable for older plan buyers
People of all ages, including the “young and invincible” population, are finding that coverage is more affordable now that the American Rescue Plan has been implemented. But because the full-price cost of health insurance is based on age — and is therefore higher for older enrollees — the ARP’s additional subsidies are particularly valuable for older Americans.
Some older consumers have been purchasing their own individual-market health insurance for years, and are now finding that their premiums are lower than they were before the ARP was enacted. (This is true only if these consumers update their marketplace application to activate the new subsidies or claim them later on their tax returns. People who have off-exchange coverage will need to transition to the exchange in order to take advantage of the new subsidies, either upfront or on a tax return.)
But the ARP is also making it easier for people to transition from employer-sponsored health insurance to a self-purchased health plan. This is especially true for older applicants, since their subsidies are larger (to offset the higher premiums they would otherwise have to pay).
So if you’re still a few years out from Medicare eligibility and facing the loss of your employer-sponsored health plan, rest assured that you’ll have options for health coverage. And thanks to the ACA and the ARP, it’s more likely you’ll be able to afford it.
A closer look: age 60 and transitioning to the individual market
You can use this spreadsheet to get a sense of how much the ARP has boosted premium subsidies, particularly for older Americans who didn’t previously qualify for a subsidy due to income. (See the second section, with examples for a 60-year-old.) But here’s an example to help illustrate the point:
Let’s consider Giuseppe, a 60-year-old who lives in Dallas and has chosen to retire despite having another five years before he’s eligible for Medicare. To show just how much the American Rescue Plan has improved the situation, we’ll assume that he’s already earned $55,000 in 2021 before leaving his job.
Because his income level is above 400% of the federal poverty level for a single person, Giuseppe would not have been eligible for a premium subsidy at all under the pre-ARP rules, even for the months after he ceased to earn an income. And since Texas has refused to expand Medicaid eligibility under the ACA, he would also be ineligible for Medicaid – even if his monthly income drops to $0 due to the job loss. (This is still the case, even with the American Rescue Plan in place.)
Thanks to the ARP, Giuseppe will qualify for a premium tax credit (premium subsidy) of nearly $500/month once he transitions from his employer-sponsored plan to a plan in the Texas marketplace. (That’s based on the assumption that he won’t have any additional income for the remainder of the year, and that his annual income for 2021 will end up being $55,000.)
Giuseppe will be able to choose from among 83 different plans, with after-subsidy premiums that start at just $84/month. That’s a plan with a high deductible; depending on his expected medical needs, it might make sense to pay more to get a more robust plan. But no matter what plan he chooses, out-of-pocket costs for in-network care won’t exceed $8,550 in 2021, essential health benefits will be covered on all of the available plans, and pre-existing conditions will also be covered.
Before the American Rescue Plan was implemented, Giuseppe would have had to pay a minimum of $584/month for individual health insurance in 2021 (the full-price cost for the cheapest Bronze-level plan available in the marketplace), because he would have been ineligible for premium subsidies due to the income he earned earlier in the year.
ACA + ARP subsidy is particularly valuable for older enrollees
If Giuseppe were 30 instead of 60, the full-price cost for the least expensive Bronze plan would only be $243/month. That disparity highlights the importance of the ACA/ARP subsidies: Without any subsidies, Giuseppe would be paying almost two and a half times as much as a 30-year-old.
But thanks to the subsidies, Giuseppe has access to plans that are significantly less expensive than the options he would have if he were 30 years old. If he were 30 and earning the same $55,000 in income this year, he would not qualify for a subsidy at all, even with the ARP in place.
That’s because the cost of the benchmark plan would already be less than 8.5% of his income, which is the cap imposed by the ARP. (For a 30-year-old in Dallas, the full-price cost of the benchmark plan is $371/month. It would have to be more than $390/month to trigger a subsidy.)
But as we saw above, 60-year-old Giuseppe’s subsidy is large enough that it brings down the cost of the least expensive plan to just $84/month. (It will make the benchmark plan equal to about $390/month, which is 8.5% of his income.)
Location matters
Subsidy amounts vary from one place to another, as do the number of available plans and the pricing for the lowest-cost plans. If 60-year-old Giuseppe lives in Orlando, for example, he’ll qualify for a subsidy of about $600/month, and will be able to choose from among 124 health plans. But the lowest-cost plan will be about $150/month. (Without the American Rescue Plan, it would have been about $750/month.)
But in both Dallas and Orlando — and anywhere else in the country — Giuseppe will pay no more than $390/month (8.5% of his income) for the benchmark Silver plan. Before the ARP was implemented, Giuseppe’s cost for the benchmark plan would simply have been the full-price cost for that plan — which varies from one place to another — as he wouldn’t have qualified for a subsidy since his income is more than 400% of the poverty level.
Even if Giuseppe had an income below 400% of the poverty level, and would have been eligible for a subsidy before the ARP, his subsidy is now larger than it would have been (as illustrated in the other income scenarios here), since he’s now expected to pay a smaller percentage of his income in premiums. For many enrollees, plans are available with no premiums at all. If you haven’t checked your subsidy eligibility lately, now’s a good time to do that!
Good subsidy news if you’re being laid off
For Americans who involuntarily lose (or recently lost) their job or involuntarily have their work hours reduced and no longer qualify for employer-sponsored health insurance, the American Rescue Plan provides a full subsidy for COBRA or state continuation (mini-COBRA) plans through the end of September 2021.
Assuming your coverage can be continued with COBRA or state continuation, you’ll have an option to do so regardless of whether you’re leaving your job voluntarily or involuntarily. But if you’re being laid off, you’ll be able to continue your coverage for free through September. (If you’re choosing to retire, you’ll still be able to elect COBRA or state continuation, but you’ll have to pay the premiums yourself.)
You’ll have 60 days to decide whether to extend your employer-sponsored coverage using the ARP’s COBRA subsidy (There is normally a 60-day window to elect COBRA in general, but that’s been extended during the COVID emergency period, which is expected to remain in place throughout 2021. But the ARP’s COBRA subsidy does have to be elected within 60 days of the person being notified of eligibility for COBRA and the subsidy.)
An option to take COBRA or state continuation coverage does not make a person ineligible for premium subsidies in the marketplace (as opposed to an offer of coverage from a current employer, which does generally make a person ineligible for marketplace subsidies). But it has to be one or the other: You can either enroll in a marketplace plan with ACA/ARP subsidies, or extend your employer-sponsored plan using COBRA or mini-COBRA with the federal subsidy through September 2021.
But if you choose to extend your employer-sponsored coverage and take the COBRA subsidy, HHS has confirmed that you’ll qualify for a special enrollment period to transition to a marketplace plan after the COBRA subsidy ends in the fall. The ARP’s additional premium subsidies for marketplace plans will be in effect throughout 2022 as well (and could be extended by Congress at a later date), so that’s an option that will remain affordable for the time being.
You’ll also have the option to keep the COBRA or state continuation coverage until it expires, but you’ll have to pay full price starting in October 2021. A marketplace plan may end up being much more affordable at that point, but it’s important to consider things like starting over with a new deductible when you transition from an employer-sponsored plan to an individual plan, as well as the different provider networks and drug formularies for the individual market plans.
The ARP’s COBRA subsidy and additional marketplace subsidies are available regardless of age. But because health insurance premiums are based on age — including, in most cases, premiums for employer-sponsored coverage — the ARP’s subsidies are particularly valuable for older Americans. Since the cost of coverage is higher, the subsidies are larger as well.
A couple of other points to keep in mind if you’re using the ARP’s COBRA subsidy:
You’ll want to check the cost of individual coverage through the marketplace during the open enrollment period that starts November 1, 2021. You’ll be seeing prices for 2022 coverage, so use your 2022 income projection to see what your after-subsidy premium will be. Even if you keep your COBRA coverage until the end of 2021, you might find that you’re better off switching to a marketplace plan as of January 2022.
Guaranteed-issue coverage makes a smooth transition to Medicare
Thanks to the Affordable Care Act, older Americans can rely on individual market coverage in the years prior to Medicare, without having to worry about pre-existing medical conditions.
“Job lock” — continuing to work just for the health insurance benefits — doesn’t exist with the same level of urgency that it once did. And the individual/family plans that are available to early retirees are comprehensive, without the sort of coverage holes that often existed in individual market plans prior to the ACA.
The ACA already provided premium subsidies to many individuals who needed coverage prior to aging into Medicare. And the ARP has made those subsidies more substantial and more widely available — particularly for older enrollees.
If you’re nearing Medicare eligibility but not quite there yet, health insurance may not be as much of a retirement obstacle as you thought it would be. You might be pleasantly surprised to see how affordable the coverage options are.
And if you’re already in need of coverage, time is of the essence. The COVID-related special enrollment period ends in most states on August 15, 2021. After that, unless you experience a qualifying event, you’ll have to wait until open enrollment to sign up for individual health insurance, with coverage effective January 1. But during the COVID-related special enrollment period, you can enroll in health coverage through the marketplace and take advantage of the ACA/ARP subsidies, even if you don’t have a qualifying life event.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-07-08 15:15:042021-07-09 15:21:54How the ARP makes marketplace health plans more affordable for older buyers
Most of the American Rescue Plan’s (ARP) additional premium subsidies have been available since April, and an estimated 1.65 million people have enrolled in health plans through the exchange (marketplace) during the COVID-related special enrollment period that’s been ongoing since February.
DC and 14 states run their own exchanges, and some of them had already activated the additional unemployment-based subsidies in May or June. But in the 36 states that use HealthCare.gov, as well as some of the state-based exchanges, the additional subsidies will become available this Thursday, July 1.
Here’s what you need to know about these additional unemployment-based subsidies:
The subsidies apply to both premiums and out-of-pocket costs
The unemployment-based subsidies are two-fold:
They provide full premium subsidies, which means they fully cover the cost of the benchmark plan (second-lowest-cost Silver plan) in your area.
The unemployment-based subsidies are available to anyone who has received or been approved to receive unemployment compensation at any time this year. (If you’re eligible to receive unemployment compensation but haven’t applied or haven’t been approved to receive it, you’re not eligible for the additional health insurance subsidies.)
Eligibility for the unemployment-based subsidies includes people whose income is under the federal poverty level, as long as they’re not eligible for Medicaid. (If a person is eligible for Medicaid or CHIP, they aren’t eligible for subsidies in the exchange; nothing has changed about that.) People with income under the poverty level are normally not eligible for subsidies, which means there’s a coverage gap in the states that have refused to accept federal funding to expand Medicaid. But a person who would otherwise be in the coverage gap can receive a full premium subsidy and full cost-sharing reductions in 2021, if they receive unemployment compensation at any time during the year.
CMS has confirmed that the full premium subsidies are only available if it’s a taxpayer who is receiving the unemployment compensation. If it’s a dependent who is receiving it, the household is eligible for the cost-sharing reductions (assuming the household is otherwise also eligible for premium tax credits), but not the full premium subsidies.
Even if you only received unemployment compensation for one week of 2021, you’re potentially eligible for the enhanced subsidies for the entire year. But subsidy eligibility would end if and when you become eligible for employer-sponsored health coverage (that’s considered affordable and provides minimum value), or premium-free Medicare Part A.
The ARP has not fixed the family glitch, so family members would also lose access to any subsidies in the exchange if they become eligible for employer-sponsored coverage that’s considered affordable for the employee.
Some of the state-run exchanges are automatically applying the additional subsidies to accounts where applicants indicated that they’re receiving unemployment compensation this year. But if you’re in a state that runs its own exchange, it’s in your best interest to log back into your account to confirm that you’re receiving all of the benefits for which you’re eligible.
If you enroll or update your account between July 1 and July 31, your new subsidies will take effect August 1. The COVID-related special enrollment period continues through August 15 in most states, but enrollments or updates completed in August won’t take effect until September.
If you’ve already got coverage through the exchange but you don’t update your application to start receiving the additional unemployment-based subsidies, you’ll be able to claim the premium subsidy on your 2021 tax return. However, there is no way to claim cost-sharing reductions after the fact. So it’s important to make sure you’re enrolled in a Silver plan as soon as possible, if you want to take advantage of that benefit.
You might need to switch plans to get the full benefit
You can get the additional premium subsidies applied to any metal-level plan, although your subsidy can never be more than the cost of your plan. So if you’re enrolled in a plan that’s less expensive than the benchmark plan, you might find that you’re able to upgrade to a better plan without paying any additional premium.
But you can only get the enhanced cost-sharing reductions if you’re enrolled in a Silver plan. So if you currently have a Bronze or Gold plan, you might choose to switch to a Silver plan to get the full benefits available under the ARP.
Although switching to a new plan mid-year usually means starting over with a new deductible and out-of-pocket maximum, many states and insurers are allowing enrollees to keep their accumulated out-of-pocket costs, as long as they switch to a new plan from the same insurer.
What you’ll pay each month
The unemployment-based subsidies will cover the full cost of the benchmark plan. So you’ll have access to two Silver plans that have no premium, and you’ll likely have access to a variety of Bronze plans — and possibly some Gold plans — that have no premium.
If you pick a plan that’s more expensive than the benchmark plan, including the higher-cost Silver plans, you’ll pay at least some premium each month.
If you’re in a state that has additional state-mandated benefits that aren’t covered by premium subsidies, you may find that you have to pay at least a dollar or two each month in premiums, regardless of which plan you select.
What you’ll pay when you need medical care
If you enroll in a Silver plan, you’ll get the full benefits of the unemployment-based subsidies, meaning that you’ll have fairly low out-of-pocket costs if you need medical care later this year. Any Silver plan you choose will have a maximum out-of-pocket of no more than $2,850 in 2021, and it’s common to see these plans with deductibles that range from $0 to $500. Copays for office visits and many prescriptions also tend to be fairly low.
If you choose a non-Silver plan, the normal cost-sharing will apply. No matter what plan you select, your out-of-pocket maximum for in-network care won’t exceed $8,550 this year, but the specifics of the coverage will vary considerably from one plan to another.
How big will your subsidy be?
You can use our subsidy calculator to see the subsidy amount that will be available to you. For people receiving unemployment compensation, the exchange will disregard any income above 139% of the poverty level for 2021.
The 2020 poverty level numbers are used to determine subsidy eligibility for 2021, so you can find the poverty level for your household size, multiply it by 1.39, and enter that number into the subsidy calculator. And if you need help finding a plan, our direct enrollment entity can provide assistance.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-30 17:14:312021-07-01 15:15:23How to get your health insurance subsidy if you’ve been unemployed
The Supreme Court upheld the Affordable Care Act today in a 7-2 ruling. The court dismissed a challenge to the law, noting that the states and individuals who were trying to overturn the ACA did not have standing.
This is the third time the ACA has survived challenges in the Supreme Court. In 2012, the ruling was 5-4, and in 2015, the ruling was 6-3. These cases have all had varying arguments and merits, but it’s noteworthy that although the court has become more conservative over the last decade, the justices have increasingly favored the ACA.
In this year’s case, some legal analysts had speculated that the court might overturn the ACA’s individual mandate but allow it to be severed from the rest of the ACA. That approach would have upheld the ACA as well, but the court simply dismissed the whole case. (This thread from Nicholas Bagley is a great summary, if you’re interested in the specifics.) So nothing has changed: The ACA remains intact, and the general consensus is that it’s here to stay.
Is this decision the end of legal challenges to the ACA?
That doesn’t mean the Affordable Care Act won’t continue to face legal challenges — a case that’s currently under consideration in Texas takes aim at the ACA’s requirement that health plans fully cover the cost of certain preventive care. But that case does not seek to overturn the ACA itself, and it appears unlikely that the Supreme Court would take up any other case that might aim to do so.
What does this decision mean for consumers?
There was a collective sigh of relief this morning among people who are enrolled in Medicaid under the ACA’s expanded eligibility guidelines, as well as those who purchase their own individual/family health insurance and rely on the ACA’s premium tax credits, cost-sharing reductions, guaranteed-issue rules and coverage for pre-existing conditions, and essential health benefits.
According to a recent analysis by Charles Gaba, more than 10% of all Americans are covered under Medicaid expansion, ACA-compliant individual/family health plans, and Basic Health Programs, all of which stem directly from the ACA.
As we’ve explained during prior legal and legislative challenges to the ACA, the law provides a vast array of additional consumer protections that extend to most Americans in one way or another. But the people who are most likely to feel a sense of relief today are those enrolled in coverage that either wouldn’t exist or wouldn’t be accessible to them without the ACA. The anxiety about losing health coverage is no longer hanging over these Americans.
Premium subsidies will continue to be available, and the subsidy enhancements provided by the American Rescue Plan will continue to be in effect throughout 2022 – and possibly longer, if Congress acts to extend them.
If you’ve been on the fence about enrolling in individual/family coverage during the special enrollment period that’s currently ongoing in nearly every state, you can now enroll with confidence. And the same is true about signing up for 2022 coverage when open enrollment starts in November.
Insurers that offer individual/family health insurance have been displaying increasing confidence in the ACA for the last few years. After fleeing the marketplaces/exchanges in 2017 and 2018, insurers started to join or rejoin the marketplaces in 2019. That trend continued in 2020 and 2021, and we’re already seeing more insurer participation in the initial 2022 rate proposals that have been submitted by insurers in several states.
The case that the Supreme Court dismissed today was initially filed in early 2018, so the legal threat to the ACA has been in the background throughout those three years of increasing insurer participation in the ACA-compliant insurance market.
Although insurance companies — and the actuaries who set premiums — tend to be quite averse to uncertainty, the individual market has proven to be profitable for insurers in recent years (after being unprofitable in the early years of ACA implementation). Insurers’ increasing willingness to offer plans in the marketplace is testament to that, despite the uncertainty that the lawsuit created over the last few years. Now that there’s no longer a pending legal threat to the ACA, we might see even more insurers opting to join the marketplaces or expand their existing coverage areas.
What does the decision mean for states?
Although many states have enacted laws designed to protect consumers in case the ACA had been overturned, there’s no getting around the fact that they rely heavily on federal funding that’s provided under the ACA. Without that funding, most states would not have been able to maintain the ACA’s Medicaid expansion or affordability provisions for self-purchased health insurance.
There’s no longer a threat to the funding, which might make states more likely to push forward with additional consumer protections tied to the ACA. Among the most obvious is Medicaid expansion in the 13 states that have not yet accepted federal funding to expand Medicaid eligibility under the ACA.
The American Rescue Plan provides two years of additional federal funding to states that newly expand Medicaid. So far, Oklahoma is the only state making use of that provision, and the state had already planned to expand Medicaid this year as a result of a ballot measure that Oklahoma voters passed last year.
To be fair, the other 13 states have rejected Medicaid expansion year after year, including during the 2020 and 2021 legislative sessions that took place during a global pandemic. Without a change to the makeup of their legislatures, most are likely to continue to do so. But now that the Supreme Court has upheld the ACA yet again, states that newly expand Medicaid can do so without a lingering worry that the federal funding might be eliminated.
It’s also possible that more states might consider reinsurance programs that make use of the ACA’s 1332 waiver provisions. But that would also depend on whether the American Rescue Plan’s subsidy enhancements are extended beyond 2022. Reinsurance programs make coverage more affordable for people who don’t receive premium subsidies. Before the ARP eliminated the “subsidy cliff” for 2021 and 2022, the lack of affordability for households earning a little more than 400% of the poverty level was a very real problem.
But that’s not currently an issue, as those households qualify for subsidies if the benchmark plan would otherwise cost them more than 8.5% of their income. If Congress extends that provision, reinsurance programs would help very few enrollees (and they can also harm subsidized enrollees in some areas, since they reduce the size of premium subsidies). State legislatures will need to keep an eye on how this plays out at the federal level, but without an extension of the ARP’s subsidy structure, we can expect to see more states pursuing 1332 waivers for reinsurance programs in the next few years.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-17 14:56:362021-06-17 15:08:45What today’s Supreme Court ruling on ACA means for consumers, insurers and states
Recent California Department of Insurance Approval Enables Insurer New Opportunity to Evaluate Underwriting Eligibility of California Homes
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-14 05:00:002021-06-14 15:07:27Farmers Insurance® Adopts Innovative Technology by Zesty.ai to Increase Homes Eligible for Insurance in High Wildfire-Risk Areas in California
The American Rescue Plan Act (or American Rescue Plan), signed into law by President Biden on March 11, provided many types of relief to Americans from the economic ravages of the COVID-19 pandemic. Among them, the American Rescue Plan (ARP) put the “affordable” in “Affordable Care Act” for millions of Americans.
Did ARP make coverage more affordable at all income levels?
The American Rescue Plan increased premium subsidies at all income levels for health plans sold in the ACA marketplaces, reducing the percentage of income that enrollees have to pay for the “benchmark” plan in their area – that is, the second-cheapest Silver plan.
At incomes up to 150% of the Federal Poverty Level ($19,140 for an individual, $39,300 for a family of four), the benchmark plan is free, and from 150% up to 200% FPL ($25,520 for an individual, $52,440 for family of four), benchmark Silver costs no more than 2% of family income. Silver plans at these income levels come with strong cost-sharing reduction (CSR) that reduces deductibles and out-of-pocket costs. Weaker CSR is available up to 250% FPL.
At the other end of the income scale – 400% FPL or higher ($51,040 for an individual, $104,800 for a family of four) – no citizen or legally present noncitizen who lacks access to other affordable insurance (e.g., from an employer or Medicare) will pay more than 8.5% of income for benchmark Silver. The ARP removed the ACA’s notorious subsidy cliff, which denied subsidies to applicants with incomes over 400% FPL.
In the in-between income brackets, the percentage of income required for a benchmark Silver plan has also been sharply reduced. See this post for illustrations of how ARP will reduce premiums for people at various income levels.
The ARP subsidy boosts are temporary, running through 2022. But Democrats are widely expected to make them permanent in subsequent legislation. That’s the first and most basic item on their healthcare agenda, fulfilling a core promise President Biden made during the 2020 campaign.
ARP subsidies make it a great time to buy new health coverage
The ARP subsidy increases should induce millions of uninsured Americans who have been under the impression that health insurance is unaffordable to take a second look. According to estimates by the Kaiser Family Foundation (KFF), as of 2020, only about half of those who were eligible for marketplace subsidies and in need of insurance were enrolled. KFF estimates that 11 million uninsured Americans are eligible for premium subsidies in the marketplace – including 3.5 million with incomes over 400% FPL who were ineligible prior to the ARP.
How affordable is affordable? According to KFF, 6 million uninsured people are eligible for free plans. It’s true that for most of these (4.7 million), the free plan would be Bronze, with deductibles averaging in the $7,000 range. But for many of those eligible for free Bronze plans, Silver – and in some cases Gold plans – are available at very low cost or even no cost at all.
For solo enrollees in the 150-200% FPL income range (topping out at $25,520), benchmark Silver (with strong CSR) can’t cost more than $43 per month. In many cases, the cheapest Silver plan costs considerably less than the benchmark.
And in about 20% of all U.S. counties, the cheapest Gold plan is cheaper than the cheapest Silver. That’s a valuable discount at incomes above 200% FPL, where CSR, which attaches only to Silver plans, is weak (in the 200-250% FPL income range) or not available (at incomes above 250% FPL).
Biden administration opens the doors and sounds the horn
Prior to the American Rescue Plan’s passage – beginning on February 15 – the Biden administration opened an emergency special enrollment period (SEP), extending until August 15 in the 36 states that use the federal ACA exchange, HealthCare.gov.
The 15 state-run exchanges (including Washington, D.C.) followed suit, though the terms and length of the state SEPs vary somewhat. (See SEP deadlines for each exchange here.) The SEP offered by HealthCare.gov and in most states is akin to the annual open enrollment period: anyone who lacks insurance can enroll. Normally, a person seeking coverage outside of open enrollment has to apply for a personal SEP and document a qualifying “life change,” such as loss of employer-sponsored insurance.
After the ARP’s passage, HealthCare.gov further opened the SEP to enable current enrollees to switch plans – for example, to upgrade from Bronze to Silver in light of the enriched subsidies. The Center for Medicare and Medicaid Services (CMS) also earmarked $50 million to advertise the SEP.
The upgraded subsidies, retroactive to January 1, went live on HealthCare.gov on April 1, and on state-based marketplaces in subsequent weeks. All in all, doors to coverage for the uninsured were flung significantly wider this spring – and remain open.
Many consumers are capitalizing on the SEP and ARP
The emergency SEP and upgraded subsidies are having an impact. On May 6, CMS announced that new plan selections from February 15 through April 30 in 36 HealthCare.gov states was just shy of 940,000 – almost quadruple enrollment in the same period in 2019, the last “normal” year. (In 2020, the pandemic also stimulated increased enrollment, totaling 391,000 in the same time period.) A large percentage of new enrollees were apparently low-income and accessing free or near-free Silver plans with strong CSR, as the median deductible for new enrollees was just $50.
As of June 5, SEP enrollment in HealthCare.gov states had topped 1 million, and marketplace coverage is now at an all-time high. Including the 15 state-based marketplaces raises the SEP enrollment total this spring to 1.5 million, according to Charles Gaba’s estimate. The percentage of subsidy-eligible potential enrollees who actually do enroll may now be closer to 60% than the roughly 50% that KFF estimates indicate in 2020. How might enrollment be boosted further?
But millions still aren’t on board
Despite the substantial gains achieved in recent months, some 10 million of the still-uninsured are likely eligible for marketplace subsidies, and another 6 to 7 million eligible for Medicaid, according to KFF estimates.
Since the ACA’s programs were first implemented in 2014, many of the uninsured have claimed that they found coverage unaffordable, While some may have balked at subsidized premiums and available plans’ out-of-pocket costs, a lack of knowledge about what’s on offer has always been a major factor. In 2020, only 32% of people surveyed by KFF knew that the ACA was still law.
The Trump administration didn’t make it easier for consumers, cutting federal funding for enrollment assistance by nonprofit “navigators” by 84%, from a peak of $63 million in 2016 to $10 million by 2018, and cutting advertising by 90%. Navigator organizations, established by the ACA to be nerve centers in a constellation of nonprofit assistor groups, have operated on shoestrings since fall 2017, cutting back on outreach events, offices throughout their states, and in-person as opposed to phone or video assistance.
The Biden administration threw a quick $2.5 million to navigators this spring – which doesn’t go far – and has allocated $80 million for navigators in the 36 states using HealthCare.gov for 2022. (Navigator funding is drawn from user fees charged to participating insurers, so the 15 states that run their own exchanges have their own funding base for enrollment assistance). A KFF analysis suggests that the $80 million allocation for 2022 may be too modest: Trump administration underspending of the user fee revenue has left some $1.2 billion available to the Biden administration to boost enrollment efforts.
Promising strategies to boost enrollment
Going forward, further innovation might boost marketplace enrollment. Maryland, which has a state-based marketplace, has pioneered an enrollment jump-start tied to tax filing, whereby the uninsured whose reported income and insurance status indicate they are eligible for subsidized coverage can check a box on their tax return and receive information about their likely eligibility for “free or low cost coverage.” Colorado will debut a similar program next year.
On a national level, aligning the annual open enrollment period with tax filing season and porting information on the tax return to a marketplace application could streamline the enrollment process. Tax preparers could be a powerful resource to encourage enrollment and assist in the often complex application process. Integrating enrollment with tax preparation could also take some of the diceyness out of the income estimate that determines subsidy size.
Switching the OE period would entail a messy transition, as plans not resetting on January 1 as in the past would create problems with deductibles and out-of-pocket caps. An alternative would be to mirror Maryland and offer the uninsured an easy-to-obtain SEP at tax time.
The ARP hasn’t helped everyone
It should be acknowledged that the ARP did not ease the plight of poor and near-poor uninsured people in the 12 states that to date have refused to enact the ACA Medicaid expansion (or, in the case of Wisconsin, enact a more limited expansion). As first enacted, the ACA offered Medicaid to all citizens and most legally present non-citizens whose household income was below 138% FPL. In 2012, the Supreme Court made that expansion optional for states.
In states that refused to expand eligibility – including high-population states Texas and Florida – most adult residents with incomes below 100% FPL are eligible neither for Medicaid nor for marketplace subsidies. The ARP provided new financial enticements for the holdout states to implement the expansion, but offered no immediate relief to an estimate 2 million people in this “coverage gap.”
The ARP also did not fix the “family glitch,” which puts health coverage out of reach for several million Americans. If an employee has access to a comprehensive employer-sponsored health plan that meets the ACA affordability standard for single coverage, the other family members are not eligible for subsidies in the exchange — regardless of how much they have to pay to join the employer-sponsored plan.
Bottom line
While more remains to be done to make affordable coverage more universally available, comprehensive and easy to obtain, it’s fair to say that most Americans who lack coverage at present can find a health plan (marketplace or Medicaid) that’s worth having at a price they can afford. If you are uninsured, check out your options on HealthCare.gov or your state exchange or use this site’s free quote tool. You can also get a subsidy estimate by using this ACA subsidy calculator.
More likely than not, you will be pleasantly surprised.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-09 15:09:552021-06-10 15:08:37ARP puts more ‘affordable’ in the Affordable Care Act
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-08 11:07:002021-06-08 14:59:20Farmers Insurance® Donates $1 Million to Support Team Rubicon's Disaster Response and COVID-19 Vaccine Distribution Efforts
Farmers® names Giles Harrison to serve as Chief Financial Officer and Jim Hinchley as President of Business Insurance
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-06-07 13:55:002021-06-07 15:04:25Farmers Insurance® Announces New Finance and Business Insurance Executives
Insurer teams up with Kapi’olani Medical Center for Women & Children to help provide free educational resources to local community
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-05-19 12:00:002021-05-19 15:01:33Farmers Insurance® Hawaii Grants $5,000 to Car Seat Safety Program
If you’re currently uninsured or enrolled in something like a short-term plan or health care sharing ministry plan and you’ve become eligible for premium subsidies as a result of the ARP, it’s likely an obvious choice to enroll in a plan through the marketplace in your state as soon as possible. And there’s a COVID/ARP enrollment window that continues through August 15 in most states, making it easy to enroll in a new plan and take advantage of the new subsidies.
But if you’re already enrolled in an ACA-compliant plan, or even a grandmothered or grandfathered major medical plan, you’ll have to decide whether you want to make a plan change during the COVID/ARP enrollment window. And depending on the circumstances, it might not be an easy decision.
Are out-of-pocket costs you’ve paid making you think twice?
Unlike plan changes made during open enrollment, plan changes made during the COVID/ARP enrollment window will take effect mid-year. And for people who have already paid some or all of their deductible and out-of-pocket costs this year, that adds an extra layer of complication to the switch-or-not decision.
Normally, the general rule of thumb is that if you switch to a new plan mid-year, you’re going to be starting over at $0 on the new plan’s deductible and out-of-pocket expenses. (These are called accumulators, since it’s a running total of the expenses you’ve accumulated toward your out-of-pocket maximum). For someone whose accumulators have already amounted to a sizable sum of money this year, having to start over at $0 in the middle of the year could be a deal-breaker.
Are ARP’s higher subsidies worth it?
But 2021 is not a normal year. The ARP has made significant changes to subsidy amounts and eligibility, and a lot of people will find that switching plans enables them to best take advantage of the enhanced subsidies. For example:
A person who enrolled in a bronze plan during open enrollment but is now eligible for a $0 premium or low-premium Silver or Gold plan (depending on location) due to income or unemployment compensation.
A person who was eligible for cost-sharing reductions but selected a bronze or gold plan during open enrollment because the silver plans were too expensive, but who can now afford the silver plan due to the extra subsidies (cost-sharing reductions are only available on silver plans)
If you switch plans, will you have to start over at zero?
The good news is that many states, state-run marketplaces, and insurers have taken action to ensure that accumulators will transfer to a new plan. (In virtually all cases, this does have to be a new plan with the same insurer — if you switch to a different insurance company, you’ll almost certainly have to start over at $0 on your accumulators.)
HealthCare.gov is the exchange/marketplace that’s used in 36 states. Its official position is that “any consumer who selects a new plan may have their accumulators, such as deductibles, reset to zero.” But insurance commissioners in some of those states have stepped in to require insurers to transfer accumulators, and in other states, all of the insurers have voluntarily agreed to do so. Washington, DC, and 14 states have state-run marketplaces, and several of them have announced that insurers will transfer accumulators.
Which states are helping with accumulators?
We’ve combed through communications from state-run marketplaces and state insurance commissioners to see which ones have issued guidance on this. But regardless of where you live, your best bet is to reach out to your insurance company before you make a plan change. Find out exactly how they’re handling accumulators during this enrollment window, and if they are transferring accumulators to new plans, make sure that you adhere to whatever requirements they may have in place.
That said, here’s what we found in terms of how states and state-run marketplaces are addressing accumulators and mid-year plan changes in 2021.
States where all accumulators will transfer as long as your old and new plans are offered by the same insurance company
District of Columbia – The marketplace has confirmed that all accumulators will transfer.
Idaho – Idaho only allowed people to switch to a plan offered by their current insurer, unless they had a qualifying event. Note that Idaho’s COVID/ARP enrollment window ended April 30, which is much earlier than the rest of the country.
Maryland – Plan changes are limited to upgrades, but the marketplace confirmed that accumulators will transfer.
Michigan – Deductibles will transfer, although some insurers will only allow this if you’re upgrading your plan. (Two insurers are allowing deductible transfers even if you’re switching from a different insurer’s plan.)
Minnesota – Minnesota is currently not allowing marketplace enrollees to switch plans during the COVID/ARP enrollment window, although this may change within the next several weeks. So for now, the accumulator transfers only apply to people switching from an off-exchange plan to an on-exchange plan. All four of the insurers that offer both on-exchange and off-exchange plans have agreed to transfer accumulators to the on-exchange plans.
Vermont – Like Minnesota, Vermont is currently only allowing people to switch from off-exchange (full-cost individual direct enrollment) to on-exchange plans. Accumulators will transfer for those plan changes.
West Virginia — The WV Office of the Insurance Commissioner confirmed that both insurers are transferring accumulators, with the exception of a transfer between an HSA-qualified plan and a non-HSA-qualified plan (mainly due to IRS regulations for how HSA-qualified plans must handle out-of-pocket costs).
Wisconsin – Covering Wisconsin, a nonprofit enrollment assistance organization, notes that accumulators will not transfer if people select a plan from a different insurer, which is to be expected.
In some states, rules are slightly more complicated
Alaska – Deductibles willreset to $0 if a policyholder is switching from off-exchange to on-exchange (or vice-versa), but will notreset if the move is from one exchange plan to another, with the same insurer.
California – The marketplace has confirmed that insurers will transfer accumulators for plan holders switching from an off-exchange plan to an on-exchange plan or from one exchange plan to another, as long as they stay with the same insurance company and the same type of managed care plan (ie, HMO to HMO, or PPO to PPO).
New Jersey – Deductibles will transfer, possibly even to a new insurer (which is fairly unique; we aren’t aware of this elsewhere, other than the two Michigan insurers that are offering it). But additional out-of-pocket spending will not transfer to the new plan.
States where the official word is that ‘it depends’
Several states have addressed accumulator transfers so that consumers know to be aware of them, but are leaving the decision up to the insurers. In these states (listed below), some or all of the insurers may be offering accumulator transfers, but consumers should definitely ask their insurer how this will work before making the decision to switch plans.
North Dakota — the ND Insurance Department is recommending that consumers reach out to their insurance company to see how this is being handled.
Pennsylvania
Rhode Island – There are two insurers that offer plans in Rhode Island’s marketplace; one has agreed to transfer accumulators and one has not, but the marketplace is still working to address this and it’s possible both insurers could end up allowing accumulators to transfer.
States where the official word is that accumulators will not transfer
Some states have fairly clearly indicated that insurers will not transfer accumulators if policyholders make a plan change. But even in these states, it’s still worth checking with a specific insurer to see what approach they’re taking, as some are still developing their approach during this unique time.
Insurance departments in the rest of the states haven’t put out any official guidance or bulletins regarding accumulator transfers, although these may still be forthcoming as the COVID/ARP window progresses. Keep in mind that it will be July in most states before the ARP’s benefits are available for people receiving unemployment compensation in 2021, so this is still very much a work in progress and likely to evolve over time.
States that have not yet issued specific guidance or clarified insurers positions on accumulator transfers include:
Alabama
Arizona
Arkansas
Delaware
Florida
Georgia
Hawaii
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Mississippi
Missouri
Nebraska
North Carolina
Oklahoma
Oregon
South Carolina
South Dakota
Texas
Utah
Wyoming
If you’re in one of these states, your insurer may or may not be transferring accumulators when enrollees switch to a new plan in 2021. If you’ve had significant out-of-pocket medical spending so far this year, be sure to reach out to your insurer to see how they’re handling this. And if a representative tells you that accumulators will transfer, it’s a good idea to get confirmation in writing.
And if your insurer initially says no, keep asking over the coming days and weeks. We’ve seen some insurers start to offer accumulator transfers after initially stating that they didn’t plan to do so, and it’s possible that other insurers might follow suit.
To switch or not to switch?
So what should you do if you’ve already spent some money out-of-pocket this year, and you’re going to have to start over at $0 on a new plan?
Maybe you’re enrolled in a grandmothered or grandfathered plan and your insurer simply doesn’t offer plans for sale in the marketplace. Depending on where you live, this might also be the case if you have an ACA-compliant off-exchange plan, as not all off-exchange insurers sell plans in the exchange. And as noted above, it might also be the case even if you want to transfer from one ACA-compliant plan to another. (But check with both the insurer and the insurance department in your state before giving up on accumulator transfers in that situation.)
Really, it just comes down to the math: Will the amount you’re going to save due to premium tax credit (and possibly cost-sharing reductions, if you’re eligible for them and switching to a Silver plan) offset the loss you’ll take by having to start over at $0 on your deductible and out-of-pocket exposure? If you haven’t spent much this year, the answer is probably Yes. If you’ve already met your maximum out-of-pocket for the year, it’s probably going to be a tougher decision.
But don’t assume that it’s not worth your while. Depending on the circumstances (especially if you were previously impacted by the “subsidy cliff” and are newly eligible for subsidies), your new subsidies might be worth more than you’d be giving up by having to start over with new out-of-pocket costs.
And if you’re part of the way toward meeting your deductible on a Bronze plan and are newly eligible for a free or very low-cost Silver plan that includes cost-sharing reductions, you might find that the new plan ultimately saves you money in out-of-pocket costs for the rest of the year, even if your accumulators don’t transfer.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-05-14 13:06:082021-05-14 15:03:31Are accumulators making you think twice about switching health plans?
The organization accepted the distinction during the VALOR Awards ceremony at Dodger Stadium
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-05-06 12:00:002021-05-11 19:38:42Farmers Insurance® Honored With Corporate Impact Award From the Los Angeles Fire Department Foundation
It’s been a widely held conclusion in the health insurance industry and among health policy types that one of our biggest hurdles lies with the challenge of getting coverage for “young invincibles” – Americans old enough to vote but under 30. That label itself is tied to a widely held perception that – because of their youth – “twenty-somethings” believe they’re healthy enough that they simply won’t need all of the bells and whistles of comprehensive health insurance (any time soon, at least).
As an agent and an avid observer of health insurance trends, I know it’s not that simple: young adults, in many cases, are keenly aware of their need for comprehensive coverage. But – despite various federal and state efforts to make coverage more affordable and accessible (including provisions of the American Rescue Plan) – there are definitely barriers making it difficult for young adults to enter the individual health insurance market.
Last week, I spoke with Carolyn Kettig, a young woman who’s determined to get coverage but facing barriers that many young Americans face. Carolyn Kettig is a professional actor in New York, and has thus far maintained health coverage under her mother’s policy. But that will end this summer, when Carolyn turns 26. She shares her story with me here, and I’ve added my own commentary wherever it might help readers in similar situations understand their coverage options.
Before we begin, it’s worth noting that because Carolyn lives in New York, she has access to a Basic Health Program. New York and Minnesota are the only states that offer these programs, and they’re an excellent coverage option for people who are eligible to enroll. But if you’re not in New York or Minnesota, you’ve still got plenty of options.
That’s particularly true now that the American Rescue Plan has been enacted, making premium subsidies larger and more widely available. For many young people, the American Rescue Plan makes robust coverage much more affordable than it used to be. (Previously, it was common for young people to feel like their only truly affordable health coverage option was a plan with a deductible that may have felt impossibly high).
Louise: What’s your current insurance situation and how is it changing this year? What are your options for coverage?
Carolyn: I’m lucky enough to currently be covered by my mother’s health insurance. She has a very generous insurance plan and I’ve been privileged to, thus far, be fully covered. Unfortunately, because I’m turning 26, I’ll be losing coverage this spring.
As a professional actor, my early twenties were filled with countless side jobs that supported me as I sought acting work in New York City. None of these jobs ever came with healthcare benefits, which at the time was okay as I was covered by my mother’s plan. Three years ago, when I landed my first big theater job, I had the opportunity to join the actor’s union, which among many other wonderful things, provides working actors with comprehensive, affordable health insurance.
The only catch, and it’s a fairly large one, is that an actor must work a certain number of weeks in order to qualify. Even without a pandemic, finding steady work in the theater is difficult. Factor in a pandemic that shutters theaters for over a year and causes the union to hemorrhage money … needless to say, healthcare coverage in my industry has become a near impossibility.
I’m hopeful that live entertainment will return in a vaccinated world, but until then, I’m doing my best to make enough money to pay my bills. I’m grateful to be employed part-time as a program director for a teen program. My job has kept me afloat during this devastating time, but, unfortunately, does not come with healthcare benefits. I make very little money and live paycheck to paycheck, which leaves me relatively few options when it comes to insurance. I will most likely go with New York State’s Essential Plan, which is the best option for low-income people who make too much money to qualify for Medicaid.
Louise: The Essential Plan is New York’s Basic Health Program (BHP), which is available to people earning up to 200% of the poverty level. (For a single person in 2021, that amounts to $25,760.) The Affordable Care Act allowed for the creation of BHPs, but New York and Minnesota are the only states that have opted to establish them.
The Essential Plan provides robust health coverage with no monthly premium, and it has much lower cost-sharing than we typically see in the individual/family health insurance market. The Essential Plan is also being enhanced as of June 2021. Previously, some enrollees had to pay $20/month, and there was an extra premium for dental and vision coverage; dental and vision are now included at no cost.
Louise: How much is the need for coverage weighing on you and other people your age?
Carolyn: I’ve lost sleep over this! It weighs on me heavily. Having grown up in New York, I have a long history with some of my doctors, most of whom will not accept my new insurance plan. This means that I will either be forced to find new doctors or pay hundreds of dollars out of pocket for routine check-ups.
I’m also aware that, even with insurance coverage, an unexpected hospital stay could cost me thousands of dollars. It makes me enraged to know that, in an emergency situation, I would avoid going to the hospital because of the cost.
Louise: The Essential Plan provides much more robust coverage than people may be used to seeing elsewhere. There is no deductible, emergency room visits cost $75, and inpatient hospital stays are only $150 per admission – and these fees are waived altogether for enrollees with income up to 150% of the poverty level, or a little more than $19,000 for a single person. This is better coverage than most people have even with higher-end employer-sponsored plans.
Carolyn: I know that I’m not alone in this. Especially since my generation is now living through a global health crisis, I think my peers are more aware than ever before of how broken our healthcare system really is. Moreover, as a white, cisgendered woman from a middle-class background, I’m cognizant of the privilege my identities afford me and deeply disturbed by the ways in which our healthcare system disregards and harms BIPOC, low-income families, LGBTQIA+ youth, and undocumented workers (many of whom are essential workers and yet have little access to healthcare coverage) among many others. Alongside the climate crisis and the fight for racial equality, I believe that healthcare reform will dominate the American political landscape for the next few decades.
Louise: I agree that our healthcare system is in need of extensive reform. The American Rescue Plan, enacted just last month, is the first major change we’ve seen since the Affordable Care Act was signed into law 11 years ago. It includes some substantial improvements designed to make health coverage more affordable and accessible.
Louise: What do you see as challenges in this situation?
Carolyn: I’ve mentioned many challenges already, but I think chief among them is simply how confusing and difficult it is to make informed choices. Reading about insurance options requires learning an entirely new language and navigating nearly impenetrable websites.
Louise: For folks who are confused by the terminology and concepts that go along with health insurance, our glossary is a great resource. We’ve incorporated plenty of details, since that’s where the nuances always are. And we’ve focused on explaining things using plain language that’s easy to understand.
Help from the American Rescue Plan
Louise: Are you aware of the changes that the American Rescue Plan has made? Do you think it will make it easier for you to access coverage?
Carolyn: I’ve read a bit about the changes made by the American Rescue Plan and am thrilled that this administration is attempting to expand access to healthcare (even though I’d love to see more substantial reform). I don’t think that I will be impacted directly by the bill because I already live in a state that offers an affordable plan for people in my income bracket.
Louise: If you lived in another state, the American Rescue Plan would make your coverage more affordable. But you’re correct: Assuming your 2021 income doesn’t exceed 200% of the poverty level (about $25,760), you’ll be eligible for either The Essential Plan or Medicaid in New York, both of which are already robust coverage with no monthly premiums.
But for others in a similar situation who live elsewhere, the American Rescue Plan implements a variety of improvements that make it easier for young people to transition to their own coverage. Among other provisions, the American Rescue Plan:
Louise: What do you expect to happen with your coverage this summer? Do you have a good idea of the plan you’ll be on after you transition away from your mom’s coverage, or is it still up in the air?
Carolyn: Fortunately, through The Actors Fund, I have access to a professional who will guide me through the process of finding a plan, although I’m fairly certain I will end up on the Essential Plan.
I’ve been told to begin the process a couple months before I lose coverage, so that’s coming up very soon! I also have many friends who are in a similar situation or have already gone through the process, so I expect I’ll be texting them a whole lot. Even though I’m anxious about navigating the system on my own for the first time, I feel well supported as I approach this transition.
Louise: As you’re going through this insurance transition, what do you feel are the most important things for other people your age to keep in mind?
Carolyn: I think it’s important to do your research, seek out trusted professionals or peers to guide you, and ask a lot of questions. The system is designed to be confusing and ultimately benefit insurance companies, so I believe the more questions you ask, the better positioned you’ll be to advocate for yourself. Get acquainted with the vocabulary and make sure you know the basic terms (i.e. premium, deductible, out of pocket maximum, in-network, enrollment period). And if you’re uninsured for a period of time, know that you can find sliding scale clinics, sliding scale hospital services, and assistance paying for prescription drugs. Your health, both physical and mental, is of utmost importance!
Louise: The advice to seek out assistance and ask lots of questions is spot-on. There are no silly questions, and any question you might have about health insurance is certainly shared by plenty of other people.
Thanks to the American Rescue Plan, there has never been a better time to be transitioning to your own health insurance policy. And even if you’re not experiencing a qualifying event (such as aging off of a parent’s health insurance policy), there’s a COVID-related enrollment window that runs through August 15 in most states, giving people an opportunity to enroll and take advantage of the newly enhanced premium subsidies.
And in every community, there are navigators, enrollment counselors, and health insurance brokers who can help you pick a plan and answer any questions you might have. We also have an extensive collection of FAQs, including several that are specific to young adults.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-04-27 12:24:082021-04-27 15:20:58Twenty-something, out of work, and losing sleep worrying about health insurance
But receiving those premium tax credits isn’t necessarily automatic: when and how you get them depends on where you live and other factors, including whether you’re already enrolled in a marketplace plan and whether you’re receiving unemployment compensation at any point in 2021.
Although the current COVID/ARP enrollment window extends through August 15 in most states, it’s in your best interest to enroll as soon as possible in order to maximize the number of months you get the extra subsidies.
If you’re receiving unemployment compensation at any point in 2021, the American Rescue Plan gives you access to substantial premium subsidies and full cost-sharing reductions. That means you’ll be eligible for a Silver plan that’s upgraded to better-than-platinum benefits, and you won’t have to pay any monthly premiums. But in most states, this benefit isn’t yet available. (Note that in some states, you may still have to pay a dollar or two, even for the lowest-cost Silver plans. And it’s worth noting that even if you’re eligible for a premium-free Silver plan, you might find that you prefer to upgrade to a Silver plan that has at least a nominal premium in trade for a more extensive provider network.)
Regardless, you’ll still want to enroll – or change your plan – as soon as possible so that when subsidies are available, you’ll receive credit for them.
Your state’s marketplace affects how and when you receive your subsidies
For starters, you should be aware that when it comes to how the ARP’s extra subsidies are being handled, there’s one process in the states that use HealthCare.gov, and 15 slightly different approaches in the other states. Thirty-six states use HealthCare.gov as their marketplace, while Washington, DC and the other 14 states operate their own state-run marketplaces (Covered California, New York State of Health, Your Health Idaho, etc.).
How and when will you receive your premium subsidy in a HealthCare.gov state?
If you’re in a state that uses HealthCare.gov, your additional subsidies will not be automatically added to your account, even if you already have financial information on file with the marketplace. You’ll need to log back into your account and follow the instructions to get your subsidy amount updated. (You can do this directly through HealthCare.gov or through an enhanced direct enrollment entity if you use one – or your broker or agent can help you sort it out). Once the new subsidy is determined, you can choose to either apply it to your current plan or pick a different plan.
If you’re uninsured or enrolled in an off-exchange plan, you can switch to the marketplace anytime between now and August 15. But the sooner you enroll, the sooner you’ll start receiving subsidies.
It’s important to understand that regardless of the reason for the additional premium subsidy (including unemployment compensation), the subsidy itself is retroactive to January 1, 2021 in every state, as long as you’ve had coverage through the marketplace for the whole year. So even if your enhanced subsidy due to unemployment compensation doesn’t take effect until August, you’ll be able to claim the rest of it when you file your 2021 tax return. However, the full cost-sharing reductions for people who receive unemployment compensation in 2021 can only be provided in real-time, and won’t take effect until the marketplace can process them, starting this summer.
How will premium subsidies be treated in states that run their own marketplaces?
In the District of Columbia and the other 14 states, the deadlines, subsidy availability dates, and even eligibility rules differ from state to state. In most of these states, the current special enrollment window is functioning like an open enrollment period, with people allowed to newly enroll or switch plans – though there are some exceptions, detailed below. And in contrast to HealthCare.gov, nearly all of the state-run exchanges will be automatically updating subsidy amounts for current enrollees over the next several weeks, as long as the enrollee has financial information on file with the exchange.
Here’s a summary of what each state with a state-run marketplace is doing:
Residents can enroll in an ACA-compliant plan through August 15.
Subsidies will not be automatically updated, but are currently available for both new and existing enrollees. The process will be more streamlined by mid-May.
Residents can enroll in an ACA-compliant plan any time through the end of the pandemic emergency period.
Extra subsidies are currently available to anyone eligible, including people who are eligible due to unemployment compensation in 2021.
Subsidies will be automatically updated in May, for current enrollees who don’t manually update their accounts before then.
For people who have been enrolled through the marketplace since January, the full amount of the additional premium subsidy will be spread across the remaining months of 2021 (as opposed to having to wait to claim the subsidy for the first few months of 2021 on their tax returns).
Residents can enroll in an ACA-compliant plan through April 30.
Updated subsidies are currently available, and have been automatically updated for existing enrollees who had already provided financial information to the exchange.
Current enrollees can change plans, but only to another plan offered by the same insurance company (unless they have a qualifying event).
Residents can enroll in an ACA-compliant plan through August 15.
Updated subsidies are currently available, and will be automatically added to existing accounts as of May, for enrollees who have opted to receive the maximum available subsidy.
Current enrollees with bronze or catastrophic plans can upgrade their coverage; current enrollees with Silver plans can switch to a more expensive Silver plan.
Residents can enroll in an ACA-compliant plan through July 23.
Updated subsidies are currently available, and will be automatically updated for existing subsidized enrollees as of May. Enrollees who are newly eligible for subsidies will be able to access them in May, for June coverage.
As soon as possible, enrollees who have received any unemployment compensation in 2021 will become eligible for ConnectorCare Plan Type 2A, which has no monthly premiums and low out-of-pocket costs.
Residents can enroll in an ACA-compliant plan through July 16.
Updated subsidies are currently available, and MNsure will automatically update existing enrollees’ subsidy amounts if they have financial information on file.
MNsure’s current enrollment window is only available to people who are uninsured or enrolled in a plan outside the exchange (it’s necessary to transition to the exchange in order to get premium subsidies). Current MNsure enrollees cannot use this window to switch plans unless they have a qualifying event. Minnesota and Vermont are currently the only states in the country with this restriction (Vermont plans to allow people to change plans in July).
Residents can enroll in an ACA-compliant plan through December 31.
As of May, New Jersey is expanding its state-funded subsidies to include enrollees with household income up to 600% of the poverty level (this was previously capped at 400% of the poverty level)
Updated subsidies are currently available. Existing enrollees can follow these steps to update their account, and new enrollees can follow these steps.
The exchange will automatically update subsidy amounts this summer, for existing enrollees who haven’t yet taken action to update their subsidies.
Residents can enroll in an ACA-compliant plan through December 31.
Updated subsidies are currently available. This video shows how existing enrollees can update their subsidy amounts. New subsidy amounts will automatically be applied to eligible enrollees’ accounts as of June, if they haven’t taken action by then.
Residents can enroll in an ACA-compliant plan through August 15.
Updated subsidies are currently available. Pennie will apply them automatically by June, for existing enrollees who haven’t taken action to update their accounts by then.
Residents can enroll in an ACA-compliant plan through August 15.
HealthSourceRI has already automatically updated subsidy amounts for current enrollees with income up to 400% of the poverty level (ie, people who were already receiving subsidies are now receiving larger subsidies).
For people with income above 400% of the poverty level, as well as people who are receiving unemployment compensation in 2021, the new subsidy amounts will be updated in June.
Residents can enroll in an ACA-compliant plan through May 14.
For now, Vermont’s marketplace is encouraging people who are uninsured or enrolled off-exchange to sign up for coverage through the marketplace as soon as possible.
People who are receiving unemployment compensation are encouraged to call Vermont’s marketplace in order to begin the process of receiving additional subsidies.
This summer, people will be able to log back into their accounts and update their subsidy amounts.
Vermont, like Minnesota, is currently limiting the COVID/ARP-related enrollment window to people who are uninsured and people who have off-exchange coverage and need to transition to the exchange. A plan change for current on-exchange enrollees requires a qualifying event. But Vermont Health Connect confirmed that they plan to allow existing enrollees to make plan changes in July.
Residents can enroll in an ACA-compliant plan through August 15.
The additional subsidy amounts will be available by early May. Washington’s marketplace will automatically update existing enrollees’ accounts so that the new premium amounts take effect in June.
People who enroll before May will not see the new subsidy amounts when they enroll, but their subsidies will be updated in May as long as they provide financial information to the marketplace when they enroll.
Enrollees who do not currently receive tax credits may want to switch plans once they start receiving tax credits. They can log back into their account after May 15 to pick a different plan, as long as it’s offered by their current insurance company.
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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2021/04/fb_image-79.jpeg580499wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-04-26 18:22:072021-04-27 15:20:59What to expect when you’re expecting health insurance premium subsidies
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-04-08 14:22:002021-05-11 19:38:42Farmers Insurance® Launches FairMileSM, New Usage-Based Commercial Auto Insurance Program in Washington State
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-04-07 16:18:002021-05-11 19:38:42The Farmers Exchanges and Farmers Group, Inc. (FGI) Close Acquisition of MetLife Auto & Home Property and Casualty Business
Consumer survey data reveals significant disconnect between safe driving beliefs and practices
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-04-01 17:15:002021-05-11 19:38:43Farmers Insurance® Finds More Than Half of Drivers Admit to Using Cell Phones While Behind The Wheel; Shares Focused Driving Tips
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-03-26 19:29:002021-05-11 19:38:43Farmers Insurance® Responds to Severe Storm System and Tornadoes in the Southeast
For generations, one of the transition points for young adults has been the process of leaving their parents’ health insurance and enrolling in their own coverage (assuming they were fortunate enough to be covered under a parent’s health plan in the first place).
By the time they need to secure their own coverage, some young adults already have access to their own employer’s health plan. But what if you don’t? Maybe you’re working for a small business that doesn’t offer coverage, or striving to fulfill your entrepreneurial dreams, or working multiple part-time jobs. Let’s take a look at your options for obtaining your own health coverage, and the points you should consider when you’re working through this process:
Individual-market plans more affordable than ever
Purchasing an individual plan in the marketplace has always been an option for young adults, and the ACA ensures that coverage is guaranteed-issue, regardless of a person’s medical history (that is, you can’t be denied coverage or charged a higher premium due to a pre-existing medical condition). The ACA also created premium subsidies that make coverage more affordable than it would otherwise be. But the ARP has increased the size of those subsidies for 2021 and 2022.
Previously, healthy young people with limited income sometimes found themselves having to make a tough choice between a plan with a very low (or free) premium and very high out-of-pocket costs, versus a plan with more manageable out-of-pocket costs but a not-insignificant monthly premium. In some circumstances, the new subsidy structure under the ARP helps to eliminate this tough decision by reducing premiums for the more robust coverage.
How much can ‘young invincibles’ save on coverage?
The exact amount of a buyer’s subsidy will depend on how old they are and where they live. But some examples will help to illustrate how the ARP’s subsidy enhancements make coverage more affordable and allow young people to enroll in more robust health plans:
Let’s say you’re about to turn 26, you live in Chicago, and you expect to earn $18,000 this year working at two part-time jobs – neither of which offer health insurance benefits. You’re losing coverage under your parents’ health plan at the end of June, and need to get your own plan in place for July.
According to HealthCare.gov’s plan comparison tool, the benchmark plan in that area has a full-price cost of about $277/month for a 26-year-old.
Under the normal rules (ie, before the American Rescue Plan), the after-subsidy amount for the benchmark plan would be about $54/month. (That’s 3.59% of the person’s $18,000 income. Here’s the math on how that’s all determined.)
Under the American Rescue Plan, that policy is free at this income level. Zero premium. It’s got a $200 deductible, $5 copays for primary care visits and generic drugs, and an $800 out-of-pocket maximum. These robust benefits are thanks to the built-in cost-sharing reductions. (Note that this option –a $0 premium plan with robust cost-sharing reductions – is also available if you’re receiving unemployment compensation in 2021, regardless of your total income.)
Those cost-sharing reductions are always available. But without the American Rescue Plan, a healthy 26-year-old might have been tempted to get one of the less-expensive Bronze plans. (In this particular case, one plan was available for under $2/month, and others were available for under $30/month.) But those come with deductibles of at least $7,400, and out-of-pocket maximums of $8,550. (Cost-sharing reductions are only available on Silver plans. The benchmark plan is always a Silver plan, and its price is used to determine the amount of a person’s subsidy.)
A young, healthy person with a limited income might have enrolled in that $2/month plan because the premiums fit their budget. But they would likely have struggled to pay the out-of-pocket costs if they experienced a significant medical event during the year. Thanks to the expanded premium subsidies created by the ARP, there’s no longer a tough decision to make, since the benchmark plan, with robust cost-sharing reductions, has a $0 premium for people with income up to 150% of the federal poverty level (for a single person, that’s $19,140 in 2021).
Although the dollar amounts of the ARP’s subsidy increases are larger for older people (because their pre-subsidy premiums are so much higher), it’s really significant that the new law helps to make it easier for “young invincibles” with limited incomes to enroll in plans with cost-sharing reductions. The Bronze plans that come with much higher out-of-pocket costs won’t be such an appealing alternative when Silver plans are made much more affordable – or free, as in the case we just looked at.
What about young people with higher incomes?
But what if you’re a young person with an income that’s too high for cost-sharing reductions? The American Rescue Plan still makes coverage more affordable, and makes it easier to afford a better-quality plan. Let’s say our 26-year-old in Chicago is earning $40,000 in 2021 – about 313% of the federal poverty level.
The benchmark plan is still $277/month without any premium subsidies.
Without the American Rescue Plan, no subsidies are available for this person at this income level (despite the fact that their income is under 400% of the poverty level). The benchmark plan is $277/month and the cheapest available plan is $215/month (it’s a Bronze plan with a $7,400 deductible, $60 primary care copays, and an out-of-pocket cap of $8,550).
Under the American Rescue Plan, this person would be eligible for a premium subsidy that would reduce the cost of the benchmark (Silver) plan to $211/month (because the percentage of income that people are expected to spend on the benchmark plan has been reduced). The lowest-cost plan would drop to about $149/month.
The take-away here? Buying your own health insurance is much more affordable in 2021 and 2022 than it would normally be. Depending on your income, you might be eligible for robust health coverage with $0 premiums, or you might be eligible for premium subsidies even if you weren’t prior to the American Rescue Plan.
Switching to your own plan: Things to keep in mind
If you’re switching to your own self-purchased health insurance plan after having coverage under a parent’s health plan, there are several things to be aware of as you make this change, particularly if your previous health coverage was offered by an employer:
You may have far more plan options than you and your family are used to having. If your parents’ plan is offered by an employer, it’s likely one of only a few options from which they can choose each year. But when you’re shopping for your own coverage in the individual market, you might see dozens of available plans. If the plan selection process feels overwhelming, here are some considerations to keep in mind as you go about picking a plan.
There might not be any PPO options. PPOs, which provide some coverage for out-of-network services and also tend to have broader provider networks, are widely available in the employer-sponsored market. But they tend to be much less available in the individual market. When you’re shopping for your own coverage, you’re more likely to encounter plans that only cover care received in-network. This makes it particularly important to understand what doctors and facilities are in-network before you enroll.
The provider network might be very different, even if the health insurance company is the same one you had before. For example, your parents’ plan might be provided or administered by Anthem Blue Cross Blue Shield, and you might decide to enroll in a marketplace plan offered by the same insurer. But most insurers have different provider networks for their individual and group health plans, so you’ll want to double-check to see if your medical providers are in-network with the plans you’re considering.
Low income? Medicaid may be an option
If you’re in Washington, DC or one of the 36 states (soon to be 38) where Medicaid eligibility was expanded as a result of the ACA, you might find that you’re eligible for Medicaid. For a single person in the continental U.S., Medicaid eligibility extends to an annual income of $17,774 in 2021. (It’s higher in Alaska and Hawaii, and DC also has a higher eligibility limit, allowing people to enroll in Medicaid with an income as high as $25,760.)
Medicaid eligibility is also based on current monthly income, meaning you won’t need to project your total annual income the way you do for premium subsidy eligibility. In a state that has expanded Medicaid eligibility under the ACA, a single individual can qualify for Medicaid with a monthly income of up to $1,482 in 2021. So if you’re going through a time period when your income is lower than normal, Medicaid can be a great safety net.
In most cases, Medicaid has no monthly premiums, and out-of-pocket costs are generally much lower than they would be with a private insurance plan.
In Minnesota and New York, Basic Health Program coverage is also available. These plans have modest premiums and provide robust health coverage. They’re available to people who earn too much for Medicaid but no more than 200% of the poverty level (which amounts to $25,520 for a single person in 2021).
COBRA: Access remains unchanged, but might be expensive
If you’re aging off your parents’ health plan, COBRA or mini-COBRA (state continuation coverage) might be available. This can be a good option if you’re able to afford it, as it allows you to keep the same coverage you already have for up to 18 additional months. You won’t have to start over with a new plan’s deductible and out-of-pocket maximum, nor will you need to worry about switching to a different provider network or selecting a plan with a different covered drug list.
The American Rescue Plan provides a one-time six-month federal subsidy that pays 100% of COBRA premiums, but this is only available to people who are eligible for COBRA due to an involuntary job loss of involuntary reduction in hours, and it’s only available through September 2020.
Aging off a parent’s health plan is a qualifying event that will allow you to continue your coverage via COBRA (assuming it’s available), but it’s not an event that will trigger the COBRA subsidy. (The details for in ARP Section 9501(a)(1)(B)(i), which references other existing statutes, all of which pertain to people who lose their jobs or have their hours reduced; the legislation notes that this must be involuntary in order to trigger the subsidies).
So depending on the circumstances, it may make more sense to switch to an individual plan in the marketplace.
Student health plans: Most are compliant with the ACA
If you’re in school and eligible for a student health plan, this might be an affordable and convenient option. Thanks to the ACA, nearly all student health plans are much more robust than they used to be, and provide coverage that follows all of the same rules that apply to individual market plans.
Check with your school to see if coverage is offered, and if so, whether it’s compliant with the ACA (some self-insured student health plans have opted to avoid ACA-compliance; if your school offers one of these plans, make sure you understand what types of medical care might not be covered under the plan).
If you do have an option to enroll in a high-quality student health plan, you’ll want to compare that with the other available options, including self-purchased individual market coverage, or remaining on a parent’s plan if you’re under 26 and that option is 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.
https://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsurememphis.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-03-25 15:37:392021-03-26 15:00:52American Rescue Plan drives health insurance costs down for ‘young invincibles’
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.)
family/household
(minimum to qualify for coverage)
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.
Considerations for individuals earning an hourly wage
If your income estimate is based on an hourly wage, consider the following questions:
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.
The post Six strategies for avoiding the Affordable Care Act’s coverage gap appeared first on healthinsurance.org.
Longer enrollment tops list of proposed marketplace improvements
Each year, HHS issues a set of rules and guidelines that apply to the health insurance exchanges created by the Affordable Care Act, and to the health plans that are sold in the individual/family market. The rule-making process includes a proposed rule, a public comment period, and then a final rule. This is normally a fairly straightforward process, but it’s been more complicated for the upcoming 2022 plan year.
The Trump administration issued the proposed 2022 rules in late November last year, and finalized some of them in January, just before inauguration day. In May, the Biden administration finalized the rest of the proposed rule changes, but noted that they intended to propose a new set of rules, with a new public comment period, in order to revisit some of the changes that had been finalized by the outgoing administration.
In late June, the Biden administration published the new proposed rules, and opened a new public comment period that continued through July 28. A total of 341 comments were submitted, and are under review by HHS.
Some of the new proposals are direct reversals of the rule changes that the Trump administration had made. Others are new ideas that are designed to help more people gain access to affordable health insurance. For various provisions, HHS notes that there are pros and cons to the proposals they’re making, and are seeking public feedback before any rules are finalized.
As is always the case, some of the proposed rules are more “behind the scenes” and wouldn’t be particularly noticeable to consumers. But there are some that would directly affect consumers, mostly by making it easier to enroll in health coverage.
How about an extra month of open enrollment?
For the last several years, the standard open enrollment period has been set at November 1 – December 15. This is the schedule that’s used by HealthCare.gov (the exchange/marketplace in 36 states), although Washington, DC and 14 states run their own exchange platforms and most of them tend to extend open enrollment.
HHS has now proposed adding an extra month to open enrollment, so that it would continue through January 15 instead of ending in mid-December. If finalized, this rule change would take effect for the upcoming open enrollment period that starts in November, for coverage effective in 2022.
HHS clarifies that the intent here is to give people more time to enroll, and give enrollment assisters more time to help everyone who needs it. They also point out that some people don’t realize how much their premiums might change from one year to the next, and are caught off guard when they get their invoice in January. By that point, however, it’s normally too late to change plans, and people might end up dropping their coverage altogether if it’s become too expensive. By giving people until January 15 to enroll, there’s time for a “do-over” if a policy was allowed to auto-renew and then ended up being more expensive than expected.
On the other hand, HHS notes that when enrollment ends in mid-December, everyone has full-year coverage, with policies that take effect in January. If enrollment is extended until mid-January, some enrollees will have coverage that takes effect in February instead. Most of the state-run exchanges already offer this, but it would take additional outreach and communication to ensure that consumers are aware that they would still need to enroll by mid-December in order to have coverage in effect as of January 1.
Year-round enrollment for people with income up to 150% FPL
HHS has proposed an ongoing enrollment opportunity for applicants with household income that doesn’t exceed 150% of the federal poverty level. If finalized, this would allow eligible applicants to enroll in coverage at any time of the year. (Under current rules, enrollment outside of the normal open enrollment period requires a special enrollment period, triggered by a qualifying life event).
This enrollment opportunity would be offered through the federally run exchange (HealthCare.gov), and state-run exchanges would have the option to offer it. HHS has clarified that it’s uncertain whether this could be added as an option for the 2022 plan year. It might need to be delayed until 2023 to give health plan actuaries adequate time to prepare for this change.
The American Rescue Plan, enacted earlier this year, has enhanced the ACA’s premium tax credits (premium subsidies) for 2021 and 2022, providing more financial help for people who buy their own health insurance. As a result, households with income up to 150% of the federal poverty level are eligible for subsidies that fully cover the cost of the benchmark plan.
That means they can select either of the two lowest-cost Silver plans and have no monthly premium. (They will also tend to have access to a variety of premium-free Bronze plans, and possibly some premium-free Gold plans. But Silver plans are generally the best option for people in this income range, due to the robust cost-sharing reductions that come with Silver plans.)
HHS notes that the enhanced premium subsidies would help to prevent adverse selection, since most applicants with household income up to 150% of FPL would be able to enroll in Silver plans — with strong cost-sharing reductions — without premiums. This means that they would be unlikely to drop their coverage after receiving medical care, as they would not have to pay anything to keep the coverage in force. (This would be applicable for 2022, assuming the year-round enrollment option could be added for 2022. For 2023 and future years, the availability of zero-premium Silver plans will depend on whether Congress extends the American Rescue Plan’s subsidy enhancements.)
However, HHS does note that some enrollees with income up to 150% of FPL do have to pay at least minimal premiums for the benchmark plan. This includes people in states where additional services beyond essential health benefits are required to be covered (and thus the premium subsidy doesn’t cover the entire cost of the benchmark plan) as well as applicants who are subject to a tobacco surcharge.
And it’s also possible for a person earning up to 150% of FPL to purchase a Silver plan that’s more expensive than the benchmark plan, and thus have a monthly premium even after the subsidy is applied.
It’s possible that there could be some adverse selection among these populations, with enrollees potentially dropping their coverage or shifting to a lower-cost plan after their medical needs are resolved. HHS is seeking public comments about how to best approach this.
It’s worth noting that Medicaid and CHIP enrollment is already available year-round, as is Basic Health Program enrollment in the two states where it’s available. In most states, Medicaid is available to adults under age 65 with household income up to 138% of the poverty level. The income caps are higher for children to qualify for Medicaid, and CHIP is available to children (and in some cases, pregnant women) in many middle-class households.
So a family with low or modest income can obtain coverage year-round in most states — for the children, and possibly the adults. This is true even though many CHIP programs — and some Medicaid programs — charge premiums. Extending open enrollment to run year-round for subsidy-eligible applicants with household income up to 150% of the poverty level would essentially just be an expansion of the enrollment eligibility rules that already exist for lower-income households.
Including the ACA’s expansion of Medicaid, health insurance exchanges, and Basic Health Programs, ACA enrollment now encompasses about 10% of all Americans. But there are still millions of Americans — most of whom have fairly low incomes — who are uninsured and possibly unaware of the financial assistance that’s available to them. HHS is working to make coverage as accessible as possible to this population, and the proposed year-round enrollment window is part of that approach.
Standardized plans return to HealthCare.gov for 2023
Five years ago, HealthCare.gov debuted standardized health plans, dubbed “Simple Choice” plans. The idea was to make it easier for consumers to compare apples to apples when looking at multiple health insurance policy options.
The Trump administration finalized a rule change in 2018 that eliminated Simple Choice plans starting with the 2019 plan year. So HHS did not create standardized plan designs for the last few years.
The 2018 rule change that eliminated standardized plan designs on HealthCare.gov was vacated by a court ruling earlier this year, as were three other provisions of the 2018 rule. So HHS is starting the process of once again creating standardized plans and gathering public feedback on how to best proceed.
And earlier this month, President Biden issued a wide-ranging executive order aimed at promoting competition in the U.S. economy. One of its provisions calls for HHS to “implement standardized options in the national Health Insurance Marketplace and any other appropriate mechanisms to improve competition and consumer choice.”
When standardized plans were previously available in the federally run exchange, it was optional for insurers to offer them and insurers were also free to offer a variety of non-standardized plans. The specifics of their reintroduction are unclear at this point, but the proposed rules seem to indicate that the plans, which are expected to be available for the 2023 plan year, will continue to be optional for insurers.
Consumer protection rules
Some of the other proposed rule changes are designed to protect consumers, although their implementation might not be obvious.
Over the last few years, HHS had implemented several regulatory changes that would have eroded various consumer protections or created confusion in the marketplace. But these rules have either been blocked by the courts or had little in the way of interest from states. And now HHS has proposed a reversal of some of them:
The final version of the new rules is expected to be published within the next few weeks. We won’t know the status of these proposed rule changes until then, but the proposed changes we’ve discussed here are fairly likely to be finalized, albeit with possible modifications based on public comments that HHS received.
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 Longer enrollment tops list of proposed marketplace improvements appeared first on healthinsurance.org.
Why you should care about the August 15 special enrollment deadline
This spring and summer, more than 2 million Americans have already flocked to the health insurance marketplaces in their states, enticed by larger health insurance subsidies during a one-time special enrollment period (SEP). This SEP was created to address the COVID-19 pandemic and allow people to take advantage of the extra subsidies created by the American Rescue Plan (ARP).
But this limited enrollment opportunity is about to end in most states.
There are a few state-run exchanges where the COVID-related SEP has already ended, and a few others where it extends past August 15. But in most of the country, August 15 is the last day to sign up for 2021 coverage without needing to show proof of a qualifying life event.
How many people bought individual health insurance during the SEP?
HHS reported that 2.1 million people had already enrolled in coverage under this SEP by the end of June. This is two to three times higher than typical enrollment volume during that time of year (when a qualifying event would normally be necessary).
And enrollment likely increased even more in July, when the additional subsidies were made available for people who had received unemployment compensation in 2021.
What happens when the SEP ends on August 15?
Once the COVID/American Rescue Plan special enrollment period ends in your state, regular individual-market enrollment rules will apply. This means that you’ll need a qualifying event in order to enroll in coverage with a 2021 effective date.
The next open enrollment opportunity will start nationwide on November 1, but that enrollment period will be for coverage that takes effect January 1, 2022.
Why review your coverage before the SEP deadline?
Even if you’re already enrolled in a health plan through the marketplace in your state and you’re happy with your coverage, you should take a few minutes to double check everything before the SEP ends.
You can update your account to make sure that you’re receiving the enhanced subsidy amount available under the ARP. And if you need to switch plans to best take advantage of that subsidy, now’s your chance to do so.
This could be the case, for example, if you’re newly eligible for cost-sharing reductions because you’ve received unemployment benefits this year. (You need to be enrolled in a Silver plan to receive that benefit.)
It could also be the case if you’re currently enrolled in a plan that costs less than your new subsidy amount. You might find that you can upgrade your coverage and still have minimal premiums each month.
One thing to note: Before you make a plan change, make sure you understand whether deductible and out-of-pocket amounts will transfer to the new plan. They probably will, as long as you stick with the same insurer.
If you’re enrolled through HealthCare.gov and you don’t update your account to activate the new subsidies, you should still see your subsidy amounts updated as of September. HHS will be updating accounts in August to align the ARP’s subsidy structure with the income amounts that enrollees had previously projected for 2021.
This will be helpful in terms of giving people more affordable coverage for the final few months of the year, as opposed to having to wait until tax season to claim the extra subsidy. But there will be no opportunity to change your 2021 coverage at that point, unless you have a qualifying event.
Why should you enroll now if you haven’t already?
Millions of Americans are already enrolled in health coverage through the exchanges. But there are still millions more who are uninsured or enrolled in non-ACA-compliant coverage such as short-term health plans or health care sharing ministry plans.
If that’s you or someone you know, the current enrollment period is an excellent opportunity to make the switch to comprehensive major medical health insurance. And chances are, it’ll be less expensive than you’re expecting, especially if it’s been a while since you checked your coverage options.
There are several reasons for this:
Will my premiums be higher if I wait until November?
The current SEP is for 2021 coverage, whereas the open enrollment period that starts in November will be for 2022 coverage. If you buy health coverage now, you’ll be locking in your premiums for the rest of this year.
In January 2022, your premium is likely to change, though we don’t yet have a clear picture of exactly how premiums will be changing. Across the states where rate filings have been made public, we’re seeing insurers proposing mostly single-digit rate increases, although there have also been some decreases and a handful of larger increases proposed.
But since most marketplace enrollees receive premium subsidies, changes in benchmark premium prices (and the related changes in subsidy amounts) will play a significant role in how much your net premiums change for 2022.
Should I enroll before the deadline if I’m uninsured?
If you’re uninsured, there’s no benefit to skipping coverage now and waiting for the start of open enrollment. That will just guarantee that you won’t have coverage in place until January, and your 2022 premium will be the same either way.
If a sudden and serious health condition were to arise while you’re uninsured, you would have no way to obtain coverage that starts before January 2022 unless you experience a qualifying event.
When will my coverage start if I enroll during the SEP?
As is always the case, your coverage won’t take effect immediately. If you enroll during the current SEP in most states, your plan will take effect the first of the following month.
How long will my coverage last if I enroll by the SEP deadline?
ACA-compliant individual/family health plans renew each year on January 1. This is true regardless of when you sign up for the plan. So if you’re enrolling during the current SEP, the specifics of your health plan – including the monthly premium – will remain the same through the end of December. (Note that your after-subsidy monthly premium could change if your income changes later in the year.)
At that point, your plan will likely be available for renewal for 2022, but the premiums and the coverage details might change. So for example, the deductible and out-of-pocket limit might change, and your premium will almost certainly change – due to both the change in your own plan’s premium, as well as changes to your subsidy amount caused by fluctuations in the benchmark premium amount in your area.
If I enroll now, do I need to enroll again in November?
In most cases, coverage will auto-renew if you don’t log back into your account during the fall open enrollment to manually pick your coverage for 2022. But for a variety of reasons, auto-renewal is not in your best interest.
Instead, you should plan to spend at least a few minutes this fall comparing your options for 2022. Even though the open enrollment window is just around the corner (it starts November 1) the options for 2022 might be very different from what you’re seeing right now for the rest of 2021. Insurers are joining the marketplaces in many states, and existing insurers are expanding their coverage areas.
That can affect plan availability as well as subsidy amounts, so you’ll want to plan to spend some time reconsidering your options for 2022.
Is there any way to enroll in 2021 coverage after August 15?
In California, DC, New Jersey, New York, and Vermont, the COVID-related special enrollment period is already scheduled to extend past August 15. (In Vermont, this applies to uninsured residents. Current enrollees who wish to switch plans must do so by August 15.) But even in those states, it’s in your best interest to enroll sooner rather than later, in order to take advantage of the enhanced subsidies that are available under the American Rescue Plan.
After August 15, in most states, you’ll need a qualifying event to be able to sign up for coverage that starts prior to January 2022. You’ll have access to open enrollment this fall, but that coverage won’t take effect until January, even if you enroll right away on November 1.
What do I need to do if I’m getting a COBRA subsidy?
The American Rescue Plan’s COBRA subsidy continues through the end of September. Assuming your COBRA or state continuation coverage is eligible to continue past that date, you’ll have the option to keep it by paying the full premiums yourself as of October, or switch to a self-purchased individual/family plan instead.
If you want to switch to a self-purchased plan, you can enroll in a plan in the marketplace in September and have your new coverage take effect seamlessly on October 1. Although the COVID-related special enrollment period will have ended by that point, you’ll be eligible for a special enrollment period triggered by the termination of the COBRA subsidy.
If you’re choosing to switch to a new plan when the COBRA subsidy ends, you’ll want to pay close attention to details regarding any deductible and out-of-pocket costs you’ve accumulated this year. As a general rule, you should assume that those will reset to $0 when you switch to an individual market plan. But it’s possible that your insurer might allow you to transfer them if you switch to an individual plan offered by the same insurer that provides your group coverage.
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 Why you should care about the August 15 special enrollment deadline appeared first on healthinsurance.org.
How the ARP makes marketplace health plans more affordable for older buyers
The American Rescue Plan (ARP) is the single biggest improvement in health insurance affordability since the Affordable Care Act was implemented. For 2021 and 2022, it has increased the size of premium subsidies in the marketplace/exchange, and eliminated the “subsidy cliff.”
The ARP ensures that Americans who receive unemployment compensation at any time in 2021 can enroll in a premium-free Silver plan with full cost-sharing reductions. (If you’re eligible for this benefit but enrolled in a non-Silver plan, you’ll need to switch to a Silver plan in order to take advantage of the cost-sharing reductions. In most states, you have until August 15, 2021 to make this change.) It also provides subsidies to cover the full cost of COBRA or state continuation coverage, through September 2021, for people who involuntarily lose their jobs or have their hours reduced.
To allow people an opportunity to access the enhanced premium subsidies in the marketplace, there’s a one-time special enrollment window that continues through August 15, 2021 in most states. Largely as a result of this enrollment opportunity and the ARP’s subsidy enhancements, effectuated enrollment in the marketplaces nationwide has almost certainly reached a record high, with an estimated 1.65 million people enrolling during the first three-and-a-half months of the special enrollment period.
ARP subsidies particularly valuable for older plan buyers
People of all ages, including the “young and invincible” population, are finding that coverage is more affordable now that the American Rescue Plan has been implemented. But because the full-price cost of health insurance is based on age — and is therefore higher for older enrollees — the ARP’s additional subsidies are particularly valuable for older Americans.
Some older consumers have been purchasing their own individual-market health insurance for years, and are now finding that their premiums are lower than they were before the ARP was enacted. (This is true only if these consumers update their marketplace application to activate the new subsidies or claim them later on their tax returns. People who have off-exchange coverage will need to transition to the exchange in order to take advantage of the new subsidies, either upfront or on a tax return.)
But the ARP is also making it easier for people to transition from employer-sponsored health insurance to a self-purchased health plan. This is especially true for older applicants, since their subsidies are larger (to offset the higher premiums they would otherwise have to pay).
So if you’re still a few years out from Medicare eligibility and facing the loss of your employer-sponsored health plan, rest assured that you’ll have options for health coverage. And thanks to the ACA and the ARP, it’s more likely you’ll be able to afford it.
A closer look: age 60 and transitioning to the individual market
You can use this spreadsheet to get a sense of how much the ARP has boosted premium subsidies, particularly for older Americans who didn’t previously qualify for a subsidy due to income. (See the second section, with examples for a 60-year-old.) But here’s an example to help illustrate the point:
Let’s consider Giuseppe, a 60-year-old who lives in Dallas and has chosen to retire despite having another five years before he’s eligible for Medicare. To show just how much the American Rescue Plan has improved the situation, we’ll assume that he’s already earned $55,000 in 2021 before leaving his job.
Because his income level is above 400% of the federal poverty level for a single person, Giuseppe would not have been eligible for a premium subsidy at all under the pre-ARP rules, even for the months after he ceased to earn an income. And since Texas has refused to expand Medicaid eligibility under the ACA, he would also be ineligible for Medicaid – even if his monthly income drops to $0 due to the job loss. (This is still the case, even with the American Rescue Plan in place.)
Thanks to the ARP, Giuseppe will qualify for a premium tax credit (premium subsidy) of nearly $500/month once he transitions from his employer-sponsored plan to a plan in the Texas marketplace. (That’s based on the assumption that he won’t have any additional income for the remainder of the year, and that his annual income for 2021 will end up being $55,000.)
Giuseppe will be able to choose from among 83 different plans, with after-subsidy premiums that start at just $84/month. That’s a plan with a high deductible; depending on his expected medical needs, it might make sense to pay more to get a more robust plan. But no matter what plan he chooses, out-of-pocket costs for in-network care won’t exceed $8,550 in 2021, essential health benefits will be covered on all of the available plans, and pre-existing conditions will also be covered.
Before the American Rescue Plan was implemented, Giuseppe would have had to pay a minimum of $584/month for individual health insurance in 2021 (the full-price cost for the cheapest Bronze-level plan available in the marketplace), because he would have been ineligible for premium subsidies due to the income he earned earlier in the year.
ACA + ARP subsidy is particularly valuable for older enrollees
If Giuseppe were 30 instead of 60, the full-price cost for the least expensive Bronze plan would only be $243/month. That disparity highlights the importance of the ACA/ARP subsidies: Without any subsidies, Giuseppe would be paying almost two and a half times as much as a 30-year-old.
But thanks to the subsidies, Giuseppe has access to plans that are significantly less expensive than the options he would have if he were 30 years old. If he were 30 and earning the same $55,000 in income this year, he would not qualify for a subsidy at all, even with the ARP in place.
That’s because the cost of the benchmark plan would already be less than 8.5% of his income, which is the cap imposed by the ARP. (For a 30-year-old in Dallas, the full-price cost of the benchmark plan is $371/month. It would have to be more than $390/month to trigger a subsidy.)
But as we saw above, 60-year-old Giuseppe’s subsidy is large enough that it brings down the cost of the least expensive plan to just $84/month. (It will make the benchmark plan equal to about $390/month, which is 8.5% of his income.)
Location matters
Subsidy amounts vary from one place to another, as do the number of available plans and the pricing for the lowest-cost plans. If 60-year-old Giuseppe lives in Orlando, for example, he’ll qualify for a subsidy of about $600/month, and will be able to choose from among 124 health plans. But the lowest-cost plan will be about $150/month. (Without the American Rescue Plan, it would have been about $750/month.)
But in both Dallas and Orlando — and anywhere else in the country — Giuseppe will pay no more than $390/month (8.5% of his income) for the benchmark Silver plan. Before the ARP was implemented, Giuseppe’s cost for the benchmark plan would simply have been the full-price cost for that plan — which varies from one place to another — as he wouldn’t have qualified for a subsidy since his income is more than 400% of the poverty level.
Even if Giuseppe had an income below 400% of the poverty level, and would have been eligible for a subsidy before the ARP, his subsidy is now larger than it would have been (as illustrated in the other income scenarios here), since he’s now expected to pay a smaller percentage of his income in premiums. For many enrollees, plans are available with no premiums at all. If you haven’t checked your subsidy eligibility lately, now’s a good time to do that!
Good subsidy news if you’re being laid off
For Americans who involuntarily lose (or recently lost) their job or involuntarily have their work hours reduced and no longer qualify for employer-sponsored health insurance, the American Rescue Plan provides a full subsidy for COBRA or state continuation (mini-COBRA) plans through the end of September 2021.
Assuming your coverage can be continued with COBRA or state continuation, you’ll have an option to do so regardless of whether you’re leaving your job voluntarily or involuntarily. But if you’re being laid off, you’ll be able to continue your coverage for free through September. (If you’re choosing to retire, you’ll still be able to elect COBRA or state continuation, but you’ll have to pay the premiums yourself.)
You’ll have 60 days to decide whether to extend your employer-sponsored coverage using the ARP’s COBRA subsidy (There is normally a 60-day window to elect COBRA in general, but that’s been extended during the COVID emergency period, which is expected to remain in place throughout 2021. But the ARP’s COBRA subsidy does have to be elected within 60 days of the person being notified of eligibility for COBRA and the subsidy.)
An option to take COBRA or state continuation coverage does not make a person ineligible for premium subsidies in the marketplace (as opposed to an offer of coverage from a current employer, which does generally make a person ineligible for marketplace subsidies). But it has to be one or the other: You can either enroll in a marketplace plan with ACA/ARP subsidies, or extend your employer-sponsored plan using COBRA or mini-COBRA with the federal subsidy through September 2021.
But if you choose to extend your employer-sponsored coverage and take the COBRA subsidy, HHS has confirmed that you’ll qualify for a special enrollment period to transition to a marketplace plan after the COBRA subsidy ends in the fall. The ARP’s additional premium subsidies for marketplace plans will be in effect throughout 2022 as well (and could be extended by Congress at a later date), so that’s an option that will remain affordable for the time being.
You’ll also have the option to keep the COBRA or state continuation coverage until it expires, but you’ll have to pay full price starting in October 2021. A marketplace plan may end up being much more affordable at that point, but it’s important to consider things like starting over with a new deductible when you transition from an employer-sponsored plan to an individual plan, as well as the different provider networks and drug formularies for the individual market plans.
The ARP’s COBRA subsidy and additional marketplace subsidies are available regardless of age. But because health insurance premiums are based on age — including, in most cases, premiums for employer-sponsored coverage — the ARP’s subsidies are particularly valuable for older Americans. Since the cost of coverage is higher, the subsidies are larger as well.
A couple of other points to keep in mind if you’re using the ARP’s COBRA subsidy:
You’ll want to check the cost of individual coverage through the marketplace during the open enrollment period that starts November 1, 2021. You’ll be seeing prices for 2022 coverage, so use your 2022 income projection to see what your after-subsidy premium will be. Even if you keep your COBRA coverage until the end of 2021, you might find that you’re better off switching to a marketplace plan as of January 2022.
If you’ll become eligible for Medicare during the time your COBRA will be in place, be sure you understand the rules regarding enrollment in Medicare Part B and D. You can delay Medicare Part B if you’re covered under an active employee plan, but not if you’re covered under COBRA. And your COBRA coverage may or may not be considered creditable coverage for Medicare Part D.
Guaranteed-issue coverage makes a smooth transition to Medicare
Thanks to the Affordable Care Act, older Americans can rely on individual market coverage in the years prior to Medicare, without having to worry about pre-existing medical conditions.
“Job lock” — continuing to work just for the health insurance benefits — doesn’t exist with the same level of urgency that it once did. And the individual/family plans that are available to early retirees are comprehensive, without the sort of coverage holes that often existed in individual market plans prior to the ACA.
The ACA already provided premium subsidies to many individuals who needed coverage prior to aging into Medicare. And the ARP has made those subsidies more substantial and more widely available — particularly for older enrollees.
If you’re nearing Medicare eligibility but not quite there yet, health insurance may not be as much of a retirement obstacle as you thought it would be. You might be pleasantly surprised to see how affordable the coverage options are.
And if you’re already in need of coverage, time is of the essence. The COVID-related special enrollment period ends in most states on August 15, 2021. After that, unless you experience a qualifying event, you’ll have to wait until open enrollment to sign up for individual health insurance, with coverage effective January 1. But during the COVID-related special enrollment period, you can enroll in health coverage through the marketplace and take advantage of the ACA/ARP subsidies, even if you don’t have a qualifying life event.
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 How the ARP makes marketplace health plans more affordable for older buyers appeared first on healthinsurance.org.
How to get your health insurance subsidy if you’ve been unemployed
Most of the American Rescue Plan’s (ARP) additional premium subsidies have been available since April, and an estimated 1.65 million people have enrolled in health plans through the exchange (marketplace) during the COVID-related special enrollment period that’s been ongoing since February.
But a major provision of the law will take effect on July 1, when HealthCare.gov makes additional subsidies available to people who have received unemployment compensation this year.
DC and 14 states run their own exchanges, and some of them had already activated the additional unemployment-based subsidies in May or June. But in the 36 states that use HealthCare.gov, as well as some of the state-based exchanges, the additional subsidies will become available this Thursday, July 1.
Here’s what you need to know about these additional unemployment-based subsidies:
The subsidies apply to both premiums and out-of-pocket costs
The unemployment-based subsidies are two-fold:
Who is eligible for unemployment-based subsidies?
The unemployment-based subsidies are available to anyone who has received or been approved to receive unemployment compensation at any time this year. (If you’re eligible to receive unemployment compensation but haven’t applied or haven’t been approved to receive it, you’re not eligible for the additional health insurance subsidies.)
Eligibility for the unemployment-based subsidies includes people whose income is under the federal poverty level, as long as they’re not eligible for Medicaid. (If a person is eligible for Medicaid or CHIP, they aren’t eligible for subsidies in the exchange; nothing has changed about that.) People with income under the poverty level are normally not eligible for subsidies, which means there’s a coverage gap in the states that have refused to accept federal funding to expand Medicaid. But a person who would otherwise be in the coverage gap can receive a full premium subsidy and full cost-sharing reductions in 2021, if they receive unemployment compensation at any time during the year.
CMS has confirmed that the full premium subsidies are only available if it’s a taxpayer who is receiving the unemployment compensation. If it’s a dependent who is receiving it, the household is eligible for the cost-sharing reductions (assuming the household is otherwise also eligible for premium tax credits), but not the full premium subsidies.
Even if you only received unemployment compensation for one week of 2021, you’re potentially eligible for the enhanced subsidies for the entire year. But subsidy eligibility would end if and when you become eligible for employer-sponsored health coverage (that’s considered affordable and provides minimum value), or premium-free Medicare Part A.
The ARP has not fixed the family glitch, so family members would also lose access to any subsidies in the exchange if they become eligible for employer-sponsored coverage that’s considered affordable for the employee.
How to claim the extra subsidies
HealthCare.gov will not be able to automatically update these subsidies (although that’s something that may become available later on), so you’ll need to log back into your account and update your application to activate the subsidies. You can do this through HealthCare.gov, or through an enhanced direct enrollment entity if you use one.
Some of the state-run exchanges are automatically applying the additional subsidies to accounts where applicants indicated that they’re receiving unemployment compensation this year. But if you’re in a state that runs its own exchange, it’s in your best interest to log back into your account to confirm that you’re receiving all of the benefits for which you’re eligible.
If you enroll or update your account between July 1 and July 31, your new subsidies will take effect August 1. The COVID-related special enrollment period continues through August 15 in most states, but enrollments or updates completed in August won’t take effect until September.
If you’ve already got coverage through the exchange but you don’t update your application to start receiving the additional unemployment-based subsidies, you’ll be able to claim the premium subsidy on your 2021 tax return. However, there is no way to claim cost-sharing reductions after the fact. So it’s important to make sure you’re enrolled in a Silver plan as soon as possible, if you want to take advantage of that benefit.
You might need to switch plans to get the full benefit
You can get the additional premium subsidies applied to any metal-level plan, although your subsidy can never be more than the cost of your plan. So if you’re enrolled in a plan that’s less expensive than the benchmark plan, you might find that you’re able to upgrade to a better plan without paying any additional premium.
But you can only get the enhanced cost-sharing reductions if you’re enrolled in a Silver plan. So if you currently have a Bronze or Gold plan, you might choose to switch to a Silver plan to get the full benefits available under the ARP.
Although switching to a new plan mid-year usually means starting over with a new deductible and out-of-pocket maximum, many states and insurers are allowing enrollees to keep their accumulated out-of-pocket costs, as long as they switch to a new plan from the same insurer.
What you’ll pay each month
The unemployment-based subsidies will cover the full cost of the benchmark plan. So you’ll have access to two Silver plans that have no premium, and you’ll likely have access to a variety of Bronze plans — and possibly some Gold plans — that have no premium.
If you pick a plan that’s more expensive than the benchmark plan, including the higher-cost Silver plans, you’ll pay at least some premium each month.
If you’re in a state that has additional state-mandated benefits that aren’t covered by premium subsidies, you may find that you have to pay at least a dollar or two each month in premiums, regardless of which plan you select.
What you’ll pay when you need medical care
If you enroll in a Silver plan, you’ll get the full benefits of the unemployment-based subsidies, meaning that you’ll have fairly low out-of-pocket costs if you need medical care later this year. Any Silver plan you choose will have a maximum out-of-pocket of no more than $2,850 in 2021, and it’s common to see these plans with deductibles that range from $0 to $500. Copays for office visits and many prescriptions also tend to be fairly low.
If you choose a non-Silver plan, the normal cost-sharing will apply. No matter what plan you select, your out-of-pocket maximum for in-network care won’t exceed $8,550 this year, but the specifics of the coverage will vary considerably from one plan to another.
How big will your subsidy be?
You can use our subsidy calculator to see the subsidy amount that will be available to you. For people receiving unemployment compensation, the exchange will disregard any income above 139% of the poverty level for 2021.
The 2020 poverty level numbers are used to determine subsidy eligibility for 2021, so you can find the poverty level for your household size, multiply it by 1.39, and enter that number into the subsidy calculator. And if you need help finding a plan, our direct enrollment entity can provide assistance.
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 How to get your health insurance subsidy if you’ve been unemployed appeared first on healthinsurance.org.
What today’s Supreme Court ruling on ACA means for consumers, insurers and states
The Supreme Court upheld the Affordable Care Act today in a 7-2 ruling. The court dismissed a challenge to the law, noting that the states and individuals who were trying to overturn the ACA did not have standing.
This is the third time the ACA has survived challenges in the Supreme Court. In 2012, the ruling was 5-4, and in 2015, the ruling was 6-3. These cases have all had varying arguments and merits, but it’s noteworthy that although the court has become more conservative over the last decade, the justices have increasingly favored the ACA.
In this year’s case, some legal analysts had speculated that the court might overturn the ACA’s individual mandate but allow it to be severed from the rest of the ACA. That approach would have upheld the ACA as well, but the court simply dismissed the whole case. (This thread from Nicholas Bagley is a great summary, if you’re interested in the specifics.) So nothing has changed: The ACA remains intact, and the general consensus is that it’s here to stay.
Is this decision the end of legal challenges to the ACA?
That doesn’t mean the Affordable Care Act won’t continue to face legal challenges — a case that’s currently under consideration in Texas takes aim at the ACA’s requirement that health plans fully cover the cost of certain preventive care. But that case does not seek to overturn the ACA itself, and it appears unlikely that the Supreme Court would take up any other case that might aim to do so.
What does this decision mean for consumers?
There was a collective sigh of relief this morning among people who are enrolled in Medicaid under the ACA’s expanded eligibility guidelines, as well as those who purchase their own individual/family health insurance and rely on the ACA’s premium tax credits, cost-sharing reductions, guaranteed-issue rules and coverage for pre-existing conditions, and essential health benefits.
According to a recent analysis by Charles Gaba, more than 10% of all Americans are covered under Medicaid expansion, ACA-compliant individual/family health plans, and Basic Health Programs, all of which stem directly from the ACA.
As we’ve explained during prior legal and legislative challenges to the ACA, the law provides a vast array of additional consumer protections that extend to most Americans in one way or another. But the people who are most likely to feel a sense of relief today are those enrolled in coverage that either wouldn’t exist or wouldn’t be accessible to them without the ACA. The anxiety about losing health coverage is no longer hanging over these Americans.
Premium subsidies will continue to be available, and the subsidy enhancements provided by the American Rescue Plan will continue to be in effect throughout 2022 – and possibly longer, if Congress acts to extend them.
If you’ve been on the fence about enrolling in individual/family coverage during the special enrollment period that’s currently ongoing in nearly every state, you can now enroll with confidence. And the same is true about signing up for 2022 coverage when open enrollment starts in November.
And although today’s ruling was on a lawsuit that hinged around the individual mandate and penalty, nothing has changed about the ACA’s requirement that most people maintain health insurance: There continues to be no federal penalty for not having health insurance, as has been the case since 2019. (If you’re in California, Massachusetts, New Jersey, Rhode Island, or the District of Columbia, there’s still a penalty for going without health insurance.)
What does the decision mean for health insurers?
Insurers that offer individual/family health insurance have been displaying increasing confidence in the ACA for the last few years. After fleeing the marketplaces/exchanges in 2017 and 2018, insurers started to join or rejoin the marketplaces in 2019. That trend continued in 2020 and 2021, and we’re already seeing more insurer participation in the initial 2022 rate proposals that have been submitted by insurers in several states.
The case that the Supreme Court dismissed today was initially filed in early 2018, so the legal threat to the ACA has been in the background throughout those three years of increasing insurer participation in the ACA-compliant insurance market.
Although insurance companies — and the actuaries who set premiums — tend to be quite averse to uncertainty, the individual market has proven to be profitable for insurers in recent years (after being unprofitable in the early years of ACA implementation). Insurers’ increasing willingness to offer plans in the marketplace is testament to that, despite the uncertainty that the lawsuit created over the last few years. Now that there’s no longer a pending legal threat to the ACA, we might see even more insurers opting to join the marketplaces or expand their existing coverage areas.
What does the decision mean for states?
Although many states have enacted laws designed to protect consumers in case the ACA had been overturned, there’s no getting around the fact that they rely heavily on federal funding that’s provided under the ACA. Without that funding, most states would not have been able to maintain the ACA’s Medicaid expansion or affordability provisions for self-purchased health insurance.
There’s no longer a threat to the funding, which might make states more likely to push forward with additional consumer protections tied to the ACA. Among the most obvious is Medicaid expansion in the 13 states that have not yet accepted federal funding to expand Medicaid eligibility under the ACA.
The American Rescue Plan provides two years of additional federal funding to states that newly expand Medicaid. So far, Oklahoma is the only state making use of that provision, and the state had already planned to expand Medicaid this year as a result of a ballot measure that Oklahoma voters passed last year.
To be fair, the other 13 states have rejected Medicaid expansion year after year, including during the 2020 and 2021 legislative sessions that took place during a global pandemic. Without a change to the makeup of their legislatures, most are likely to continue to do so. But now that the Supreme Court has upheld the ACA yet again, states that newly expand Medicaid can do so without a lingering worry that the federal funding might be eliminated.
It’s also possible that more states might consider reinsurance programs that make use of the ACA’s 1332 waiver provisions. But that would also depend on whether the American Rescue Plan’s subsidy enhancements are extended beyond 2022. Reinsurance programs make coverage more affordable for people who don’t receive premium subsidies. Before the ARP eliminated the “subsidy cliff” for 2021 and 2022, the lack of affordability for households earning a little more than 400% of the poverty level was a very real problem.
But that’s not currently an issue, as those households qualify for subsidies if the benchmark plan would otherwise cost them more than 8.5% of their income. If Congress extends that provision, reinsurance programs would help very few enrollees (and they can also harm subsidized enrollees in some areas, since they reduce the size of premium subsidies). State legislatures will need to keep an eye on how this plays out at the federal level, but without an extension of the ARP’s subsidy structure, we can expect to see more states pursuing 1332 waivers for reinsurance programs in the next few years.
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 What today’s Supreme Court ruling on ACA means for consumers, insurers and states appeared first on healthinsurance.org.
Farmers Insurance® Adopts Innovative Technology by Zesty.ai to Increase Homes Eligible for Insurance in High Wildfire-Risk Areas in California
Recent California Department of Insurance Approval Enables Insurer New Opportunity to Evaluate Underwriting Eligibility of California Homes
ARP puts more ‘affordable’ in the Affordable Care Act
Did ARP make coverage more affordable at all income levels?
The American Rescue Plan increased premium subsidies at all income levels for health plans sold in the ACA marketplaces, reducing the percentage of income that enrollees have to pay for the “benchmark” plan in their area – that is, the second-cheapest Silver plan.
At incomes up to 150% of the Federal Poverty Level ($19,140 for an individual, $39,300 for a family of four), the benchmark plan is free, and from 150% up to 200% FPL ($25,520 for an individual, $52,440 for family of four), benchmark Silver costs no more than 2% of family income. Silver plans at these income levels come with strong cost-sharing reduction (CSR) that reduces deductibles and out-of-pocket costs. Weaker CSR is available up to 250% FPL.
At the other end of the income scale – 400% FPL or higher ($51,040 for an individual, $104,800 for a family of four) – no citizen or legally present noncitizen who lacks access to other affordable insurance (e.g., from an employer or Medicare) will pay more than 8.5% of income for benchmark Silver. The ARP removed the ACA’s notorious subsidy cliff, which denied subsidies to applicants with incomes over 400% FPL.
In the in-between income brackets, the percentage of income required for a benchmark Silver plan has also been sharply reduced. See this post for illustrations of how ARP will reduce premiums for people at various income levels.
The American Rescue Plan also effectively made free high-CSR Silver plans free to anyone who received any unemployment insurance compensation in 2021 and lacked access to other affordable insurance.
The ARP subsidy boosts are temporary, running through 2022. But Democrats are widely expected to make them permanent in subsequent legislation. That’s the first and most basic item on their healthcare agenda, fulfilling a core promise President Biden made during the 2020 campaign.
ARP subsidies make it a great time to buy new health coverage
The ARP subsidy increases should induce millions of uninsured Americans who have been under the impression that health insurance is unaffordable to take a second look. According to estimates by the Kaiser Family Foundation (KFF), as of 2020, only about half of those who were eligible for marketplace subsidies and in need of insurance were enrolled. KFF estimates that 11 million uninsured Americans are eligible for premium subsidies in the marketplace – including 3.5 million with incomes over 400% FPL who were ineligible prior to the ARP.
How affordable is affordable? According to KFF, 6 million uninsured people are eligible for free plans. It’s true that for most of these (4.7 million), the free plan would be Bronze, with deductibles averaging in the $7,000 range. But for many of those eligible for free Bronze plans, Silver – and in some cases Gold plans – are available at very low cost or even no cost at all.
For solo enrollees in the 150-200% FPL income range (topping out at $25,520), benchmark Silver (with strong CSR) can’t cost more than $43 per month. In many cases, the cheapest Silver plan costs considerably less than the benchmark.
And in about 20% of all U.S. counties, the cheapest Gold plan is cheaper than the cheapest Silver. That’s a valuable discount at incomes above 200% FPL, where CSR, which attaches only to Silver plans, is weak (in the 200-250% FPL income range) or not available (at incomes above 250% FPL).
Biden administration opens the doors and sounds the horn
Prior to the American Rescue Plan’s passage – beginning on February 15 – the Biden administration opened an emergency special enrollment period (SEP), extending until August 15 in the 36 states that use the federal ACA exchange, HealthCare.gov.
The 15 state-run exchanges (including Washington, D.C.) followed suit, though the terms and length of the state SEPs vary somewhat. (See SEP deadlines for each exchange here.) The SEP offered by HealthCare.gov and in most states is akin to the annual open enrollment period: anyone who lacks insurance can enroll. Normally, a person seeking coverage outside of open enrollment has to apply for a personal SEP and document a qualifying “life change,” such as loss of employer-sponsored insurance.
After the ARP’s passage, HealthCare.gov further opened the SEP to enable current enrollees to switch plans – for example, to upgrade from Bronze to Silver in light of the enriched subsidies. The Center for Medicare and Medicaid Services (CMS) also earmarked $50 million to advertise the SEP.
The upgraded subsidies, retroactive to January 1, went live on HealthCare.gov on April 1, and on state-based marketplaces in subsequent weeks. All in all, doors to coverage for the uninsured were flung significantly wider this spring – and remain open.
Many consumers are capitalizing on the SEP and ARP
The emergency SEP and upgraded subsidies are having an impact. On May 6, CMS announced that new plan selections from February 15 through April 30 in 36 HealthCare.gov states was just shy of 940,000 – almost quadruple enrollment in the same period in 2019, the last “normal” year. (In 2020, the pandemic also stimulated increased enrollment, totaling 391,000 in the same time period.) A large percentage of new enrollees were apparently low-income and accessing free or near-free Silver plans with strong CSR, as the median deductible for new enrollees was just $50.
As of June 5, SEP enrollment in HealthCare.gov states had topped 1 million, and marketplace coverage is now at an all-time high. Including the 15 state-based marketplaces raises the SEP enrollment total this spring to 1.5 million, according to Charles Gaba’s estimate. The percentage of subsidy-eligible potential enrollees who actually do enroll may now be closer to 60% than the roughly 50% that KFF estimates indicate in 2020. How might enrollment be boosted further?
But millions still aren’t on board
Despite the substantial gains achieved in recent months, some 10 million of the still-uninsured are likely eligible for marketplace subsidies, and another 6 to 7 million eligible for Medicaid, according to KFF estimates.
Since the ACA’s programs were first implemented in 2014, many of the uninsured have claimed that they found coverage unaffordable, While some may have balked at subsidized premiums and available plans’ out-of-pocket costs, a lack of knowledge about what’s on offer has always been a major factor. In 2020, only 32% of people surveyed by KFF knew that the ACA was still law.
The Trump administration didn’t make it easier for consumers, cutting federal funding for enrollment assistance by nonprofit “navigators” by 84%, from a peak of $63 million in 2016 to $10 million by 2018, and cutting advertising by 90%. Navigator organizations, established by the ACA to be nerve centers in a constellation of nonprofit assistor groups, have operated on shoestrings since fall 2017, cutting back on outreach events, offices throughout their states, and in-person as opposed to phone or video assistance.
The Biden administration threw a quick $2.5 million to navigators this spring – which doesn’t go far – and has allocated $80 million for navigators in the 36 states using HealthCare.gov for 2022. (Navigator funding is drawn from user fees charged to participating insurers, so the 15 states that run their own exchanges have their own funding base for enrollment assistance). A KFF analysis suggests that the $80 million allocation for 2022 may be too modest: Trump administration underspending of the user fee revenue has left some $1.2 billion available to the Biden administration to boost enrollment efforts.
Promising strategies to boost enrollment
Going forward, further innovation might boost marketplace enrollment. Maryland, which has a state-based marketplace, has pioneered an enrollment jump-start tied to tax filing, whereby the uninsured whose reported income and insurance status indicate they are eligible for subsidized coverage can check a box on their tax return and receive information about their likely eligibility for “free or low cost coverage.” Colorado will debut a similar program next year.
On a national level, aligning the annual open enrollment period with tax filing season and porting information on the tax return to a marketplace application could streamline the enrollment process. Tax preparers could be a powerful resource to encourage enrollment and assist in the often complex application process. Integrating enrollment with tax preparation could also take some of the diceyness out of the income estimate that determines subsidy size.
Switching the OE period would entail a messy transition, as plans not resetting on January 1 as in the past would create problems with deductibles and out-of-pocket caps. An alternative would be to mirror Maryland and offer the uninsured an easy-to-obtain SEP at tax time.
The ARP hasn’t helped everyone
It should be acknowledged that the ARP did not ease the plight of poor and near-poor uninsured people in the 12 states that to date have refused to enact the ACA Medicaid expansion (or, in the case of Wisconsin, enact a more limited expansion). As first enacted, the ACA offered Medicaid to all citizens and most legally present non-citizens whose household income was below 138% FPL. In 2012, the Supreme Court made that expansion optional for states.
In states that refused to expand eligibility – including high-population states Texas and Florida – most adult residents with incomes below 100% FPL are eligible neither for Medicaid nor for marketplace subsidies. The ARP provided new financial enticements for the holdout states to implement the expansion, but offered no immediate relief to an estimate 2 million people in this “coverage gap.”
The ARP also did not fix the “family glitch,” which puts health coverage out of reach for several million Americans. If an employee has access to a comprehensive employer-sponsored health plan that meets the ACA affordability standard for single coverage, the other family members are not eligible for subsidies in the exchange — regardless of how much they have to pay to join the employer-sponsored plan.
Bottom line
While more remains to be done to make affordable coverage more universally available, comprehensive and easy to obtain, it’s fair to say that most Americans who lack coverage at present can find a health plan (marketplace or Medicaid) that’s worth having at a price they can afford. If you are uninsured, check out your options on HealthCare.gov or your state exchange or use this site’s free quote tool. You can also get a subsidy estimate by using this ACA subsidy calculator.
More likely than not, you will be pleasantly surprised.
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.
The post ARP puts more ‘affordable’ in the Affordable Care Act appeared first on healthinsurance.org.
Farmers Insurance® Donates $1 Million to Support Team Rubicon's Disaster Response and COVID-19 Vaccine Distribution Efforts
Farmers Insurance® Announces New Finance and Business Insurance Executives
Farmers® names Giles Harrison to serve as Chief Financial Officer and Jim Hinchley as President of Business Insurance
Farmers Insurance® Hawaii Grants $5,000 to Car Seat Safety Program
Insurer teams up with Kapi’olani Medical Center for Women & Children to help provide free educational resources to local community
Are accumulators making you think twice about switching health plans?
For millions of Americans who don’t have access to employer-sponsored or government-run health insurance, the American Rescue Plan (ARP) does a lot to make health coverage more affordable this year. Premium subsidies are larger, and more people will qualify for premium-free plans, including anyone receiving unemployment compensation at any point in 2021.
If you’re currently uninsured or enrolled in something like a short-term plan or health care sharing ministry plan and you’ve become eligible for premium subsidies as a result of the ARP, it’s likely an obvious choice to enroll in a plan through the marketplace in your state as soon as possible. And there’s a COVID/ARP enrollment window that continues through August 15 in most states, making it easy to enroll in a new plan and take advantage of the new subsidies.
But if you’re already enrolled in an ACA-compliant plan, or even a grandmothered or grandfathered major medical plan, you’ll have to decide whether you want to make a plan change during the COVID/ARP enrollment window. And depending on the circumstances, it might not be an easy decision.
Are out-of-pocket costs you’ve paid making you think twice?
Unlike plan changes made during open enrollment, plan changes made during the COVID/ARP enrollment window will take effect mid-year. And for people who have already paid some or all of their deductible and out-of-pocket costs this year, that adds an extra layer of complication to the switch-or-not decision.
Normally, the general rule of thumb is that if you switch to a new plan mid-year, you’re going to be starting over at $0 on the new plan’s deductible and out-of-pocket expenses. (These are called accumulators, since it’s a running total of the expenses you’ve accumulated toward your out-of-pocket maximum). For someone whose accumulators have already amounted to a sizable sum of money this year, having to start over at $0 in the middle of the year could be a deal-breaker.
Are ARP’s higher subsidies worth it?
But 2021 is not a normal year. The ARP has made significant changes to subsidy amounts and eligibility, and a lot of people will find that switching plans enables them to best take advantage of the enhanced subsidies. For example:
If you switch plans, will you have to start over at zero?
The good news is that many states, state-run marketplaces, and insurers have taken action to ensure that accumulators will transfer to a new plan. (In virtually all cases, this does have to be a new plan with the same insurer — if you switch to a different insurance company, you’ll almost certainly have to start over at $0 on your accumulators.)
HealthCare.gov is the exchange/marketplace that’s used in 36 states. Its official position is that “any consumer who selects a new plan may have their accumulators, such as deductibles, reset to zero.” But insurance commissioners in some of those states have stepped in to require insurers to transfer accumulators, and in other states, all of the insurers have voluntarily agreed to do so. Washington, DC, and 14 states have state-run marketplaces, and several of them have announced that insurers will transfer accumulators.
Which states are helping with accumulators?
We’ve combed through communications from state-run marketplaces and state insurance commissioners to see which ones have issued guidance on this. But regardless of where you live, your best bet is to reach out to your insurance company before you make a plan change. Find out exactly how they’re handling accumulators during this enrollment window, and if they are transferring accumulators to new plans, make sure that you adhere to whatever requirements they may have in place.
That said, here’s what we found in terms of how states and state-run marketplaces are addressing accumulators and mid-year plan changes in 2021.
States where all accumulators will transfer as long as your old and new plans are offered by the same insurance company
In some states, rules are slightly more complicated
States where the official word is that ‘it depends’
Several states have addressed accumulator transfers so that consumers know to be aware of them, but are leaving the decision up to the insurers. In these states (listed below), some or all of the insurers may be offering accumulator transfers, but consumers should definitely ask their insurer how this will work before making the decision to switch plans.
States where the official word is that accumulators will not transfer
Some states have fairly clearly indicated that insurers will not transfer accumulators if policyholders make a plan change. But even in these states, it’s still worth checking with a specific insurer to see what approach they’re taking, as some are still developing their approach during this unique time.
What if my state’s not listed?
Insurance departments in the rest of the states haven’t put out any official guidance or bulletins regarding accumulator transfers, although these may still be forthcoming as the COVID/ARP window progresses. Keep in mind that it will be July in most states before the ARP’s benefits are available for people receiving unemployment compensation in 2021, so this is still very much a work in progress and likely to evolve over time.
States that have not yet issued specific guidance or clarified insurers positions on accumulator transfers include:
If you’re in one of these states, your insurer may or may not be transferring accumulators when enrollees switch to a new plan in 2021. If you’ve had significant out-of-pocket medical spending so far this year, be sure to reach out to your insurer to see how they’re handling this. And if a representative tells you that accumulators will transfer, it’s a good idea to get confirmation in writing.
And if your insurer initially says no, keep asking over the coming days and weeks. We’ve seen some insurers start to offer accumulator transfers after initially stating that they didn’t plan to do so, and it’s possible that other insurers might follow suit.
To switch or not to switch?
So what should you do if you’ve already spent some money out-of-pocket this year, and you’re going to have to start over at $0 on a new plan?
Maybe you’re enrolled in a grandmothered or grandfathered plan and your insurer simply doesn’t offer plans for sale in the marketplace. Depending on where you live, this might also be the case if you have an ACA-compliant off-exchange plan, as not all off-exchange insurers sell plans in the exchange. And as noted above, it might also be the case even if you want to transfer from one ACA-compliant plan to another. (But check with both the insurer and the insurance department in your state before giving up on accumulator transfers in that situation.)
Really, it just comes down to the math: Will the amount you’re going to save due to premium tax credit (and possibly cost-sharing reductions, if you’re eligible for them and switching to a Silver plan) offset the loss you’ll take by having to start over at $0 on your deductible and out-of-pocket exposure? If you haven’t spent much this year, the answer is probably Yes. If you’ve already met your maximum out-of-pocket for the year, it’s probably going to be a tougher decision.
But don’t assume that it’s not worth your while. Depending on the circumstances (especially if you were previously impacted by the “subsidy cliff” and are newly eligible for subsidies), your new subsidies might be worth more than you’d be giving up by having to start over with new out-of-pocket costs.
And if you’re part of the way toward meeting your deductible on a Bronze plan and are newly eligible for a free or very low-cost Silver plan that includes cost-sharing reductions, you might find that the new plan ultimately saves you money in out-of-pocket costs for the rest of the year, even if your accumulators don’t transfer.
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 insurance marketplace updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Are accumulators making you think twice about switching health plans? appeared first on healthinsurance.org.
Farmers Insurance® Honored With Corporate Impact Award From the Los Angeles Fire Department Foundation
The organization accepted the distinction during the VALOR Awards ceremony at Dodger Stadium
Twenty-something, out of work, and losing sleep worrying about health insurance
It’s been a widely held conclusion in the health insurance industry and among health policy types that one of our biggest hurdles lies with the challenge of getting coverage for “young invincibles” – Americans old enough to vote but under 30. That label itself is tied to a widely held perception that – because of their youth – “twenty-somethings” believe they’re healthy enough that they simply won’t need all of the bells and whistles of comprehensive health insurance (any time soon, at least).
As an agent and an avid observer of health insurance trends, I know it’s not that simple: young adults, in many cases, are keenly aware of their need for comprehensive coverage. But – despite various federal and state efforts to make coverage more affordable and accessible (including provisions of the American Rescue Plan) – there are definitely barriers making it difficult for young adults to enter the individual health insurance market.
Last week, I spoke with Carolyn Kettig, a young woman who’s determined to get coverage but facing barriers that many young Americans face. Carolyn Kettig is a professional actor in New York, and has thus far maintained health coverage under her mother’s policy. But that will end this summer, when Carolyn turns 26. She shares her story with me here, and I’ve added my own commentary wherever it might help readers in similar situations understand their coverage options.
Before we begin, it’s worth noting that because Carolyn lives in New York, she has access to a Basic Health Program. New York and Minnesota are the only states that offer these programs, and they’re an excellent coverage option for people who are eligible to enroll. But if you’re not in New York or Minnesota, you’ve still got plenty of options.
That’s particularly true now that the American Rescue Plan has been enacted, making premium subsidies larger and more widely available. For many young people, the American Rescue Plan makes robust coverage much more affordable than it used to be. (Previously, it was common for young people to feel like their only truly affordable health coverage option was a plan with a deductible that may have felt impossibly high).
Louise: What’s your current insurance situation and how is it changing this year? What are your options for coverage?
Carolyn: I’m lucky enough to currently be covered by my mother’s health insurance. She has a very generous insurance plan and I’ve been privileged to, thus far, be fully covered. Unfortunately, because I’m turning 26, I’ll be losing coverage this spring.
As a professional actor, my early twenties were filled with countless side jobs that supported me as I sought acting work in New York City. None of these jobs ever came with healthcare benefits, which at the time was okay as I was covered by my mother’s plan. Three years ago, when I landed my first big theater job, I had the opportunity to join the actor’s union, which among many other wonderful things, provides working actors with comprehensive, affordable health insurance.
The only catch, and it’s a fairly large one, is that an actor must work a certain number of weeks in order to qualify. Even without a pandemic, finding steady work in the theater is difficult. Factor in a pandemic that shutters theaters for over a year and causes the union to hemorrhage money … needless to say, healthcare coverage in my industry has become a near impossibility.
I’m hopeful that live entertainment will return in a vaccinated world, but until then, I’m doing my best to make enough money to pay my bills. I’m grateful to be employed part-time as a program director for a teen program. My job has kept me afloat during this devastating time, but, unfortunately, does not come with healthcare benefits. I make very little money and live paycheck to paycheck, which leaves me relatively few options when it comes to insurance. I will most likely go with New York State’s Essential Plan, which is the best option for low-income people who make too much money to qualify for Medicaid.
Louise: The Essential Plan is New York’s Basic Health Program (BHP), which is available to people earning up to 200% of the poverty level. (For a single person in 2021, that amounts to $25,760.) The Affordable Care Act allowed for the creation of BHPs, but New York and Minnesota are the only states that have opted to establish them.
The Essential Plan provides robust health coverage with no monthly premium, and it has much lower cost-sharing than we typically see in the individual/family health insurance market. The Essential Plan is also being enhanced as of June 2021. Previously, some enrollees had to pay $20/month, and there was an extra premium for dental and vision coverage; dental and vision are now included at no cost.
Louise: How much is the need for coverage weighing on you and other people your age?
Carolyn: I’ve lost sleep over this! It weighs on me heavily. Having grown up in New York, I have a long history with some of my doctors, most of whom will not accept my new insurance plan. This means that I will either be forced to find new doctors or pay hundreds of dollars out of pocket for routine check-ups.
I’m also aware that, even with insurance coverage, an unexpected hospital stay could cost me thousands of dollars. It makes me enraged to know that, in an emergency situation, I would avoid going to the hospital because of the cost.
Louise: The Essential Plan provides much more robust coverage than people may be used to seeing elsewhere. There is no deductible, emergency room visits cost $75, and inpatient hospital stays are only $150 per admission – and these fees are waived altogether for enrollees with income up to 150% of the poverty level, or a little more than $19,000 for a single person. This is better coverage than most people have even with higher-end employer-sponsored plans.
Carolyn: I know that I’m not alone in this. Especially since my generation is now living through a global health crisis, I think my peers are more aware than ever before of how broken our healthcare system really is. Moreover, as a white, cisgendered woman from a middle-class background, I’m cognizant of the privilege my identities afford me and deeply disturbed by the ways in which our healthcare system disregards and harms BIPOC, low-income families, LGBTQIA+ youth, and undocumented workers (many of whom are essential workers and yet have little access to healthcare coverage) among many others. Alongside the climate crisis and the fight for racial equality, I believe that healthcare reform will dominate the American political landscape for the next few decades.
Louise: I agree that our healthcare system is in need of extensive reform. The American Rescue Plan, enacted just last month, is the first major change we’ve seen since the Affordable Care Act was signed into law 11 years ago. It includes some substantial improvements designed to make health coverage more affordable and accessible.
But these improvements are temporary unless Congress takes additional action to make them permanent. And there are other issues, such as the ACA’s family glitch, and the Medicaid coverage gap that exists in the dozen states that have refused to expand Medicaid, that haven’t yet been fixed. Fortunately, lawmakers in Congress are continuing to push forward on these issues, and voters can reach out to their elected officials to express their opinions.
Louise: What do you see as challenges in this situation?
Carolyn: I’ve mentioned many challenges already, but I think chief among them is simply how confusing and difficult it is to make informed choices. Reading about insurance options requires learning an entirely new language and navigating nearly impenetrable websites.
Louise: For folks who are confused by the terminology and concepts that go along with health insurance, our glossary is a great resource. We’ve incorporated plenty of details, since that’s where the nuances always are. And we’ve focused on explaining things using plain language that’s easy to understand.
Help from the American Rescue Plan
Louise: Are you aware of the changes that the American Rescue Plan has made? Do you think it will make it easier for you to access coverage?
Carolyn: I’ve read a bit about the changes made by the American Rescue Plan and am thrilled that this administration is attempting to expand access to healthcare (even though I’d love to see more substantial reform). I don’t think that I will be impacted directly by the bill because I already live in a state that offers an affordable plan for people in my income bracket.
Louise: If you lived in another state, the American Rescue Plan would make your coverage more affordable. But you’re correct: Assuming your 2021 income doesn’t exceed 200% of the poverty level (about $25,760), you’ll be eligible for either The Essential Plan or Medicaid in New York, both of which are already robust coverage with no monthly premiums.
But for others in a similar situation who live elsewhere, the American Rescue Plan implements a variety of improvements that make it easier for young people to transition to their own coverage. Among other provisions, the American Rescue Plan:
Louise: What do you expect to happen with your coverage this summer? Do you have a good idea of the plan you’ll be on after you transition away from your mom’s coverage, or is it still up in the air?
Carolyn: Fortunately, through The Actors Fund, I have access to a professional who will guide me through the process of finding a plan, although I’m fairly certain I will end up on the Essential Plan.
I’ve been told to begin the process a couple months before I lose coverage, so that’s coming up very soon! I also have many friends who are in a similar situation or have already gone through the process, so I expect I’ll be texting them a whole lot. Even though I’m anxious about navigating the system on my own for the first time, I feel well supported as I approach this transition.
Louise: As you’re going through this insurance transition, what do you feel are the most important things for other people your age to keep in mind?
Carolyn: I think it’s important to do your research, seek out trusted professionals or peers to guide you, and ask a lot of questions. The system is designed to be confusing and ultimately benefit insurance companies, so I believe the more questions you ask, the better positioned you’ll be to advocate for yourself. Get acquainted with the vocabulary and make sure you know the basic terms (i.e. premium, deductible, out of pocket maximum, in-network, enrollment period). And if you’re uninsured for a period of time, know that you can find sliding scale clinics, sliding scale hospital services, and assistance paying for prescription drugs. Your health, both physical and mental, is of utmost importance!
Louise: The advice to seek out assistance and ask lots of questions is spot-on. There are no silly questions, and any question you might have about health insurance is certainly shared by plenty of other people.
Thanks to the American Rescue Plan, there has never been a better time to be transitioning to your own health insurance policy. And even if you’re not experiencing a qualifying event (such as aging off of a parent’s health insurance policy), there’s a COVID-related enrollment window that runs through August 15 in most states, giving people an opportunity to enroll and take advantage of the newly enhanced premium subsidies.
And in every community, there are navigators, enrollment counselors, and health insurance brokers who can help you pick a plan and answer any questions you might have. We also have an extensive collection of FAQs, including several that are specific to young adults.
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 Twenty-something, out of work, and losing sleep worrying about health insurance appeared first on healthinsurance.org.
What to expect when you’re expecting health insurance premium subsidies
If you buy your own health insurance – or don’t have health insurance at all – you might have been pleased to hear that the American Rescue Plan (ARP) has increased premium subsidies for 2021 and made them available to more people.
But receiving those premium tax credits isn’t necessarily automatic: when and how you get them depends on where you live and other factors, including whether you’re already enrolled in a marketplace plan and whether you’re receiving unemployment compensation at any point in 2021.
Use our updated subsidy calculator to estimate how much you can save on your 2021 health insurance premiums.
The early bird gets the premium subsidy
Although the current COVID/ARP enrollment window extends through August 15 in most states, it’s in your best interest to enroll as soon as possible in order to maximize the number of months you get the extra subsidies.
If you’re receiving unemployment compensation at any point in 2021, the American Rescue Plan gives you access to substantial premium subsidies and full cost-sharing reductions. That means you’ll be eligible for a Silver plan that’s upgraded to better-than-platinum benefits, and you won’t have to pay any monthly premiums. But in most states, this benefit isn’t yet available. (Note that in some states, you may still have to pay a dollar or two, even for the lowest-cost Silver plans. And it’s worth noting that even if you’re eligible for a premium-free Silver plan, you might find that you prefer to upgrade to a Silver plan that has at least a nominal premium in trade for a more extensive provider network.)
Regardless, you’ll still want to enroll – or change your plan – as soon as possible so that when subsidies are available, you’ll receive credit for them.
Your state’s marketplace affects how and when you receive your subsidies
For starters, you should be aware that when it comes to how the ARP’s extra subsidies are being handled, there’s one process in the states that use HealthCare.gov, and 15 slightly different approaches in the other states. Thirty-six states use HealthCare.gov as their marketplace, while Washington, DC and the other 14 states operate their own state-run marketplaces (Covered California, New York State of Health, Your Health Idaho, etc.).
How and when will you receive your premium subsidy in a HealthCare.gov state?
If you’re in a state that uses HealthCare.gov, your additional subsidies will not be automatically added to your account, even if you already have financial information on file with the marketplace. You’ll need to log back into your account and follow the instructions to get your subsidy amount updated. (You can do this directly through HealthCare.gov or through an enhanced direct enrollment entity if you use one – or your broker or agent can help you sort it out). Once the new subsidy is determined, you can choose to either apply it to your current plan or pick a different plan.
If you’re uninsured or enrolled in an off-exchange plan, you can switch to the marketplace anytime between now and August 15. But the sooner you enroll, the sooner you’ll start receiving subsidies.
HealthCare.gov rolled out most of the ARP’s new subsidies as of April 1, but CMS has said it will be July before the enhanced subsidies are available to people who receive unemployment compensation in 2021.
It’s important to understand that regardless of the reason for the additional premium subsidy (including unemployment compensation), the subsidy itself is retroactive to January 1, 2021 in every state, as long as you’ve had coverage through the marketplace for the whole year. So even if your enhanced subsidy due to unemployment compensation doesn’t take effect until August, you’ll be able to claim the rest of it when you file your 2021 tax return. However, the full cost-sharing reductions for people who receive unemployment compensation in 2021 can only be provided in real-time, and won’t take effect until the marketplace can process them, starting this summer.
How will premium subsidies be treated in states that run their own marketplaces?
In the District of Columbia and the other 14 states, the deadlines, subsidy availability dates, and even eligibility rules differ from state to state. In most of these states, the current special enrollment window is functioning like an open enrollment period, with people allowed to newly enroll or switch plans – though there are some exceptions, detailed below. And in contrast to HealthCare.gov, nearly all of the state-run exchanges will be automatically updating subsidy amounts for current enrollees over the next several weeks, as long as the enrollee has financial information on file with the exchange.
Here’s a summary of what each state with a state-run marketplace is doing:
California
Colorado
Connecticut:
District of Columbia:
Idaho:
Maryland:
Massachusetts:
Minnesota:
Nevada:
New Jersey:
New York:
Pennsylvania:
Rhode Island:
Vermont:
Washington:
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 What to expect when you’re expecting health insurance premium subsidies appeared first on healthinsurance.org.
Farmers Insurance® Launches FairMileSM, New Usage-Based Commercial Auto Insurance Program in Washington State
The Farmers Exchanges and Farmers Group, Inc. (FGI) Close Acquisition of MetLife Auto & Home Property and Casualty Business
Farmers Insurance® Finds More Than Half of Drivers Admit to Using Cell Phones While Behind The Wheel; Shares Focused Driving Tips
Consumer survey data reveals significant disconnect between safe driving beliefs and practices
Farmers Insurance® Responds to Severe Storm System and Tornadoes in the Southeast
American Rescue Plan drives health insurance costs down for ‘young invincibles’
For generations, one of the transition points for young adults has been the process of leaving their parents’ health insurance and enrolling in their own coverage (assuming they were fortunate enough to be covered under a parent’s health plan in the first place).
The Affordable Care Act (ACA) ushered in some important changes that made coverage much more accessible for young adults, including the provision that allows them to remain on a parent’s health plan until age 26. Now, the American Rescue Plan (ARP) is making coverage even more affordable, albeit temporarily.
For 2021 and 2022, the ARP provides enhanced premium subsidies (aka premium tax credits). And in most cases, those who are receiving unemployment compensation at any point in 2021 are eligible for premium-free coverage that includes robust cost-sharing reductions.
By the time they need to secure their own coverage, some young adults already have access to their own employer’s health plan. But what if you don’t? Maybe you’re working for a small business that doesn’t offer coverage, or striving to fulfill your entrepreneurial dreams, or working multiple part-time jobs. Let’s take a look at your options for obtaining your own health coverage, and the points you should consider when you’re working through this process:
Individual-market plans more affordable than ever
Purchasing an individual plan in the marketplace has always been an option for young adults, and the ACA ensures that coverage is guaranteed-issue, regardless of a person’s medical history (that is, you can’t be denied coverage or charged a higher premium due to a pre-existing medical condition). The ACA also created premium subsidies that make coverage more affordable than it would otherwise be. But the ARP has increased the size of those subsidies for 2021 and 2022.
Previously, healthy young people with limited income sometimes found themselves having to make a tough choice between a plan with a very low (or free) premium and very high out-of-pocket costs, versus a plan with more manageable out-of-pocket costs but a not-insignificant monthly premium. In some circumstances, the new subsidy structure under the ARP helps to eliminate this tough decision by reducing premiums for the more robust coverage.
How much can ‘young invincibles’ save on coverage?
The exact amount of a buyer’s subsidy will depend on how old they are and where they live. But some examples will help to illustrate how the ARP’s subsidy enhancements make coverage more affordable and allow young people to enroll in more robust health plans:
Let’s say you’re about to turn 26, you live in Chicago, and you expect to earn $18,000 this year working at two part-time jobs – neither of which offer health insurance benefits. You’re losing coverage under your parents’ health plan at the end of June, and need to get your own plan in place for July.
Those cost-sharing reductions are always available. But without the American Rescue Plan, a healthy 26-year-old might have been tempted to get one of the less-expensive Bronze plans. (In this particular case, one plan was available for under $2/month, and others were available for under $30/month.) But those come with deductibles of at least $7,400, and out-of-pocket maximums of $8,550. (Cost-sharing reductions are only available on Silver plans. The benchmark plan is always a Silver plan, and its price is used to determine the amount of a person’s subsidy.)
A young, healthy person with a limited income might have enrolled in that $2/month plan because the premiums fit their budget. But they would likely have struggled to pay the out-of-pocket costs if they experienced a significant medical event during the year. Thanks to the expanded premium subsidies created by the ARP, there’s no longer a tough decision to make, since the benchmark plan, with robust cost-sharing reductions, has a $0 premium for people with income up to 150% of the federal poverty level (for a single person, that’s $19,140 in 2021).
Although the dollar amounts of the ARP’s subsidy increases are larger for older people (because their pre-subsidy premiums are so much higher), it’s really significant that the new law helps to make it easier for “young invincibles” with limited incomes to enroll in plans with cost-sharing reductions. The Bronze plans that come with much higher out-of-pocket costs won’t be such an appealing alternative when Silver plans are made much more affordable – or free, as in the case we just looked at.
What about young people with higher incomes?
But what if you’re a young person with an income that’s too high for cost-sharing reductions? The American Rescue Plan still makes coverage more affordable, and makes it easier to afford a better-quality plan. Let’s say our 26-year-old in Chicago is earning $40,000 in 2021 – about 313% of the federal poverty level.
The take-away here? Buying your own health insurance is much more affordable in 2021 and 2022 than it would normally be. Depending on your income, you might be eligible for robust health coverage with $0 premiums, or you might be eligible for premium subsidies even if you weren’t prior to the American Rescue Plan.
Switching to your own plan: Things to keep in mind
If you’re switching to your own self-purchased health insurance plan after having coverage under a parent’s health plan, there are several things to be aware of as you make this change, particularly if your previous health coverage was offered by an employer:
Low income? Medicaid may be an option
If you’re in Washington, DC or one of the 36 states (soon to be 38) where Medicaid eligibility was expanded as a result of the ACA, you might find that you’re eligible for Medicaid. For a single person in the continental U.S., Medicaid eligibility extends to an annual income of $17,774 in 2021. (It’s higher in Alaska and Hawaii, and DC also has a higher eligibility limit, allowing people to enroll in Medicaid with an income as high as $25,760.)
Medicaid eligibility is also based on current monthly income, meaning you won’t need to project your total annual income the way you do for premium subsidy eligibility. In a state that has expanded Medicaid eligibility under the ACA, a single individual can qualify for Medicaid with a monthly income of up to $1,482 in 2021. So if you’re going through a time period when your income is lower than normal, Medicaid can be a great safety net.
In most cases, Medicaid has no monthly premiums, and out-of-pocket costs are generally much lower than they would be with a private insurance plan.
In Minnesota and New York, Basic Health Program coverage is also available. These plans have modest premiums and provide robust health coverage. They’re available to people who earn too much for Medicaid but no more than 200% of the poverty level (which amounts to $25,520 for a single person in 2021).
COBRA: Access remains unchanged, but might be expensive
If you’re aging off your parents’ health plan, COBRA or mini-COBRA (state continuation coverage) might be available. This can be a good option if you’re able to afford it, as it allows you to keep the same coverage you already have for up to 18 additional months. You won’t have to start over with a new plan’s deductible and out-of-pocket maximum, nor will you need to worry about switching to a different provider network or selecting a plan with a different covered drug list.
The American Rescue Plan provides a one-time six-month federal subsidy that pays 100% of COBRA premiums, but this is only available to people who are eligible for COBRA due to an involuntary job loss of involuntary reduction in hours, and it’s only available through September 2020.
Aging off a parent’s health plan is a qualifying event that will allow you to continue your coverage via COBRA (assuming it’s available), but it’s not an event that will trigger the COBRA subsidy. (The details for in ARP Section 9501(a)(1)(B)(i), which references other existing statutes, all of which pertain to people who lose their jobs or have their hours reduced; the legislation notes that this must be involuntary in order to trigger the subsidies).
So depending on the circumstances, it may make more sense to switch to an individual plan in the marketplace.
Student health plans: Most are compliant with the ACA
If you’re in school and eligible for a student health plan, this might be an affordable and convenient option. Thanks to the ACA, nearly all student health plans are much more robust than they used to be, and provide coverage that follows all of the same rules that apply to individual market plans.
Check with your school to see if coverage is offered, and if so, whether it’s compliant with the ACA (some self-insured student health plans have opted to avoid ACA-compliance; if your school offers one of these plans, make sure you understand what types of medical care might not be covered under the plan).
If you do have an option to enroll in a high-quality student health plan, you’ll want to compare that with the other available options, including self-purchased individual market coverage, or remaining on a parent’s plan if you’re under 26 and that option is 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.
The post American Rescue Plan drives health insurance costs down for ‘young invincibles’ appeared first on healthinsurance.org.