Healthcare in the U.S. has long been contentious, to say the least. But while almost every facet of our current system, old system and theoretical system is debateable ad nauseum, we can (probably) all agree on one thing: Health insurance is confusing.
Today’s political climate — which saw Republicans try to overturn the Affordable Care Act (ACA) with seven different bills since January 2017 — certainly hasn’t made things clearer. In fact, at this point, there’s no need to feel embarrassed if you’re unsure whether the ACA, also known as Obamacare, is still a thing. (It is.) So, to help you get ready for open enrollment 2018, here are the answers to 20 questions about Obamacare you’re too embarrassed to ask.
1. Is Obamacare happening this year?
Yes, and it’s coming at you fast. Federal open enrollment starts on Nov. 1, 2017 and ends on Dec. 15, 2017, with a few exceptions for people (primarily Medicare enrollees) living in hurricane-ravaged states. Some state-run exchanges are open for a wider window. You can go here to find the complete list of 2018 Obamacare open enrollment deadlines by state.
2. What’s open enrollment?
The ACA follows the workplace model where you can only sign up for a healthcare plan during a set time of year. Open enrollment is that time.
3. And ACA open enrollment is only once a year?
Yes, but, also like employer-sponsored health insurance, there are special enrollment periods for anyone who has what’s considered a qualifying event. When it comes to Obamacare, those events include a loss of health insurance, a change of zip code and big life stuff, like getting married (or divorced), having a baby or adopting a child. You can also apply and enroll in Medicaid or the Children's Health Insurance Program (CHIP) any time of year, though CHIP is a special case right now because Congress, well, they let it expire.
4. I don’t have health insurance. Do I have to sign up?
Technically, no. But you probably should. To be clear, none of Obamacare got repealed, including its individual mandate. That mandate doesn’t make going uninsured illegal, but it does stipulate Americans who can afford health insurance but chose to go without pay a penalty for each month they do so.
5. And that’s the health insurance I buy from the Obamacare exchanges?
Not necessarily. You can get a healthcare plan from, well, anywhere you can get a healthcare plan (including through an employer, just to be clear). The exchanges are designed to help people who don’t have access to affordable healthcare through work. But there are plans sold off-exchange, too, and you won’t pay the penalty if you buy one of those instead.
6. How much do I pay if I don’t get any health insurance?
Healthcare.gov has yet to release the final 2018 numbers (they rise with inflation), but, for tax year 2017, the penalty is $695 per adult and and $347.50 per child or 2.5% of household income. You pay whichever amount is higher … unless you qualify for an exemption.
7. There are Obamacare exemptions?
Quite a few actually. You generally don’t have to pay a penalty if you were uninsured for less than three consecutive months in a year. Or if you’re incarcerated, in the U.S. illegally, a member of a healthcare ministry, exempt from filing a tax return due to low income, or studying abroad for longer than a year. And you’re exempt from buying a plan if the least expensive one available to you costs more than 8.16% of your household income (at least for 2017. Again, 2018 numbers aren’t out yet.)
There are hardship exemptions you can apply for, too. Say you filed for bankruptcy or have medical expenses you can’t afford. Hardship exemptions are usually short-term. Some cover the month before the hardship; some cover the month after. Some cover the months of. This is a real mixed bag, but there’s actually a tool on Healthcare.gov that’ll help you determine what exemptions you might qualify for.
8. If you’re not exempt, when do you pay the penalty?
When you file your federal tax return for the year you went without coverage.
9. And that fee is higher than what you would pay for health insurance?
Oh boy, another complicated question. Let’s look at it high-level: The fee is capped to prevent people from paying a penalty that’s significantly higher than what a health plan would have cost. So the short answer is no, not necessarily. But, remember, you’re talking about paying a fee that, in many instances, is comparable to or only slightly higher than what you would pay for health insurance. Except, you know, you won’t have any health insurance.
10. OK, back up, what do you mean ‘in many instances’?
Well, the ACA has a lot of moving parts. For starters, the law left a lot of decisions to the states — like whether to expand Medicaid — and, beyond that, some counties are simply smaller and/or sicker than others. So, without getting too in the weeds here, the price of health insurance varies dramatically across state lines, or even zip codes. Plus, what you’ll ultimately pay for healthcare hinges on whether you’re eligible for subsidies or free coverage.
11. Wait, what are subsidies?
Yeah, that’s something that gets lost when people talk about soaring Obamacare premiums. The price of healthcare on the exchanges is going up, for sure. (We’ve got a good explainer on ACA premiums increases here.) But the percentages you see touted in most reports don’t account for the financial assistance exchange shoppers are eligible for. Under the ACA, people who earn between 100% and 400% of the federal poverty level and purchase a plan through the exchange qualify for premium subsidies that offset their monthly insurance payments. These subsidies are actually a tax credit you can receive in advance. The ACA also allows for what’s known as cost-sharing reductions (CSRs) to people who make between 100% and 250% of the poverty line. CSRs help these individuals cover co-pays and deductibles associated with certain on-exchange plans.
12. Yeah, but how likely am I to qualify for any of that?
Well, per 2016 numbers released by the Department of Health and Human Services (HHS), nearly 85% of the roughly 10 million people who got healthcare through marketplaces received tax credit subsidies and other financial assistance. The Kaiser Family Foundation actually has a good calculator that provides estimates of health insurance premiums and subsidies you might net. But, to be clear, there’s a lot of uncertainty over how much funding is going to be provided this year, since President Donald Trump has repeatedly threatened to stop making CSR payments to insurers.
13. How can he do that? I thought you said none of Obamacare was repealed?
None of it was. The original law mandates the federal government provide premium subsidies, but not CSR spending. President Barack Obama was making those payments under executive order. The Republican-controlled House of Representatives sued his administration over the move and won, but that ruling is in limbo because the case is being appealed. Trump could pull the appeal — and effectively end CSR payments — though another court ruling in August gave 17 state Attorneys General, plus Washington D.C., the power to intervene and continue it.
14. Sheesh. So, like ... why even bother buying health insurance this year? Isn’t Obamacare supposed to get repealed by the Trump administration anyway?
There’s no guarantee the ACA will remain the law of the land. But there’s also no guarantee it’ll get repealed and replaced (or just repealed) either. Thing is, politics aside, if you don’t buy health insurance, you won’t have health insurance. And that’s a pretty big risk to take, even if you’re young and in good health. Healthcare is expensive these days, so the amount of money you’d wind up paying out-of-pocket for a medical emergency could … well, bankrupt you.
Plus, assuming the ACA sticks around, a few doctor visits could easily make opting to pay a penalty in lieu of getting coverage a more expensive choice. And listen, there’s no guarantee the penalty would be less expensive to begin with. Despite what’s going on at a federal level, some states have robust exchanges. A few — Florida, New York and Minnesota — have even said premiums for people qualifying for the highest level of subsidies could go down this year.
15. Yeah, but what if I don’t live in those states?
We hear you, but bottomline, don’t forgo buying health insurance on the assumption it’s simply too expensive. There are options out there. We can help you easily compare on-exchange and off-exchange health insurance plans once open enrollment kicks off.
16. Is it worth looking into off-exchange plans? Sounds kinda dicey.
It’s not — in large part due to the ACA, which requires all health plans cover what’s known as the 10 essential benefits. On-exchange plans have to meet even more requirements (like building in pediatrics benefits, for one), so some insurers opt to offer a plan off-exchange because it’ll give them more freedom when structuring a policy. You can learn the differences between on- and off-exchange plans here, but the big thing to note is off-exchange plans don’t qualify for federal subsidies.
17. Can I shop the ACA exchanges if I have access to employer-sponsored healthcare?
Yes, and, if the health insurance your job offers is crappy — let’s say you have a super-high deductible or very, very high premiums— it’s worth checking out the exchanges to see if you can get a better plan. Keep in mind, though, employees with access to employer-sponsored healthcare won’t qualify for subsidies if it’s what the government considers “affordable”. In 2017, that meant a job-based health plan covering only the employee that costs 9.69% or less of the employee’s household income and met minimums standards of coverage.
18. What’s a deductible?
The amount of money you have to pay out of pocket before your health insurance kicks in. The other important aspects of healthcare include your co-pay (the fixed amount you’ll pay for prescriptions and services), your premium (essentially your monthly health insurance bill) and coinsurance (which is similar to a copay, but goes by percentages. So if you have a 20% coinsurance, you’ll pay 20% of the cost of covered services until you reach your out-of-pocket maximum). For more Healthcare 101, go here.
19. How do I sign up for an ACA plan?
So glad you asked! We’ve got a step-by-step guide to shopping the ACA exchanges that’ll walk you through it.
20. I have an Obamacare plan already. Do I need to re-enroll?
So, if you don’t hop onto Healthcare.gov to renew, change or cancel your coverage or your plan is no longer available in 2017, you might get automatically rolled over into the same plan or a comparable one. You should get two letters (one from your insurer and one from the marketplace) between now and Nov. 1 2017 that’ll explain your coverage status, outline any changes and let you know if you need to forward any paperwork to the exchange. No matter what the case, though, it’s worth logging on to Healthcare.gov during open enrollment to ensure you’re all set for next year … and to see if there are any better plans available to you.
Image: Cecilie Arcurs