Shopping Guide For ACA Plans
When consumers shop for Affordable Care Act plans starting Nov. 1, what they find depends on their individual circumstances.
For those receiving federal subsidies to help with their premiums the new plans may offer greater benefits. But those who aren’t eligible for those subsidies (people making 400% of the federal poverty level, around $48,000, or less) can expect to bear the full brunt of rising rates.
Premiums on ACA Plan
– Due to the details of the ACA , prices on middle-tier “silver” plans are rising—the premiums for people buying the cheapest available silver plans will rise 35% on average in the 39 states using the federal HealthCare.gov exchange, according to a new analysis from the Kaiser Family Foundation.
– Meantime, bronze and gold plan prices aren’t rising as rapidly.
– For those eligible for federal premium subsidies, there is a hidden benefit. Because premium subsidies are tied specifically to silver plans, they are jumping up as well, and allowing those who get subsidies, to opt for plans for which they will pay little or no monthly premium. Those not eligible for subsidies do not get these options.
How Did This Happen?
The federal payments to insurers for covering certain out-of-pocket costs – such as deductibles, for low-income enrollees in silver plans – were cut off in October 2017. In response, insurers raised premiums on their 2018 policies sharply to cover the extra expense. In many cases, they loaded the extra boost only onto the silver plans.
Because the separate premium subsidies are linked to silver-plan prices, those subsidies are rising, too. In many states, the costs for cheaper bronze plans are going up much less rapidly than those for silver plans, so this year many more people will be able to use those bigger subsidies to buy a plan for no premium or virtually no premium.
Depending on your circumstances, the cheapest monthly bill may not really be the best deal because bronze plans (come with minimal or zero monthly premium costs after subsidies) also may cost you far more out of your pocket when you get care.
The federal cost-sharing help, which sharply cuts down on the expense of deductibles and other out-of-pocket bills, starts only if you have a silver plan. That extra help is available to exchange enrollees making less than around 250% of the federal poverty level, or $12,000 for a single person.
What About Federal Premium Subsidies If I Make Too Much Money?
Shopping carefully is the best approach. In many states—though not all—the rate increases are far sharper on silver plans. And for most, the biggest premium hikes are reserved for silver plans being sold through healthcare.gov or a state’s own exchange, such as Covered California. That means you should take a close look at bronze and gold plans.
– In some markets a richer gold plan may actually be cheaper than a silver.
– Also look at silver plans sold outside of the ACA’s online marketplaces. If you were in a silver exchange plan this year, don’t just assume it is the best option for next year.
NOTE: For those with incomes above the subsidy cutoff line, there is also a hidden ACA provision that could affect many more people this year. The law includes a penalty for those who lack health coverage. That remains in effect this year, but the penalty is waived if the cheapest ACA marketplace plan available would cost more than 8.05% of a person’s household income. That is likely to be the case for a growing number of people.
– Consumers who believe they are priced out of ACA plans, there are other options; each has restrictions and risks.
– Many insurance agents say some small-business owners who had individual exchange plans are opting for small-business employer plans. Premiums have generally been far more stable in that market.
– Health-care ministries (share members’ bills among other members) show rising memberships…but aren’t insurance, don’t guarantee claims will be paid, and aren’t overseen by state regulators the way that insurers are. Also they may not share bills for certain pre-existing conditions.
– Both small-business plans and health-care sharing ministries can spare their members the ACA’s penalty for lacking coverage.
– “Skinny Options” such as short-term health insurance and can have a duration of only three months. Not certain where this option will evolve.
– Short-term policies tend to be far less expensive than ACA plans … but don’t carry their guarantees. Insurers can refuse to sell them to people with pre-existing conditions and offer limited coverage, often leaving out benefits such as prescription drugs. The short-term plans can also cap their payouts.
The bottom line is know what you’re buying use an online insurance vendor that is selling ACA plans.