Published October 9, 20175 min read
If you purchase health insurance through Healthcare.gov or your state health insurance exchange, you’re probably well aware that, for the most part, you can’t just change plans whenever you want. Outside of the qualifying life events (e.g. having a baby, moving to a new zip code, etc.) that afford you a special enrollment period, you typically need to wait until “open enrollment” to change things up.
While open enrollment has fallen on slightly different dates each year since the passage of the Affordable Care Act (ACA), also known as Obamacare, this year’s open enrollment is slated to run from just Nov. 1, 2017 to Dec. 15, 2017 – or barely 45 days. Some state-run exchanges have later deadlines. You can find a state-by-state guide to 2018 Obamacare open enrollment here.
If you have an individual or family plan you already like, you might be wondering if shopping around through Healthcare.gov or one of the state exchanges is a good idea. Unfortunately, all signs point to “yes” – and for more reasons than you might think. Here’s why you might consider switching health insurance or shopping around for a more affordable plan.
While your current health insurance plan may be sufficient, it’s worth checking to see if it will even be around in 2018. Many major insurers, including Anthem and Aetna, have announced their intention to leave the ACA exchanges in certain states next year. And, while all states are covered, some counties have very few options when it comes to 2018 plans offered through the exchange. Per data compiled by Bloomberg, around 23% of Obamacare customers (2.5 million Americans) live in a county where only one insurer is offering coverage next year.
Per Healthcare.gov, if your plan is going away next year, you may get automatically enrolled in a comparable plan. But that automatic rollover isn’t guaranteed — even if your plan is sticking around. Plus, you’ll want to know plan specifics. So, at the very least, be sure to log in to Healthcare.gov during open enrollment to make sure you’re signed up for 2018 coverage.
While it’s possible your current health insurance plan won’t change at all, it’s also possible your plan will be tweaked in some way – either through its copay, deductible or the network you’re allowed to use. Most likely, your premium (essentially your monthly health insurance bill) will go up. We’ve got a good explainer right here as to why Obamacare rates are rising.
You should receive a notice from your insurance company describing any changes to your policy or any changes in premium before open enrollment. At that point, you can decide to renew your coverage or shop for a new plan once open enrollment begins.
Even if you choose to keep your current plan and your insurer doesn’t change your premium, the price tag for your health insurance could still increase naturally — or due to the way subsidies are determined.
Subsidies are tax credits low-income families can apply for to offset the cost of their premiums. Each year, the government determines subsidies for individuals and families based on changes in the Federal Poverty Limit (FPL), and the price of the second-cheapest “silver” plan in your area.
Under the ACA, people who make between 100% and 400% of the FPL (adjusted for inflation) qualify for a premium tax credit. If you were in that group last year, but are now making over 400% FPL, you won’t qualify for a credit and will likely benefit from shopping around. For instance, off-exchange plans are an option now. (Subsidies only apply when you buy a plan thought the federal or state marketplace.) Off-exchange plans are sometimes more affordable, tax credit notwithstanding, because insurers have more flexibility when it comes to structuring them.
And, even if your income has changed, but remains below 400% FPL ($98,400 for a family of four in 2017), it’s still a good idea to compare costs for a new marketplace plan. That’s because, in addition to accounting for the cost of plans in your area, how much of a credit you’ll receive is based on a sliding scale — the lower your income, the greater the subsidy. In other words, any change to your income will likely affect your options.
Another detail worth noting is the fact that the annual out-of-pocket maximum for qualified plans rises every year. According to the Department of Health and Human Services, 2018’s out-of-pocket maximum is $7,350 for individual coverage and $14,700 for family coverage, up from $7,150 and $14,300 in 2017, respectively.
If you’ve been watching your deductible climb and aren’t thrilled with the idea of forking over five-figures before your health insurance kicks, then open enrollment is the perfect time to shop for a different plan with a lower cap on out-of-pocket costs. Of course, you’ll almost always pay more for a plan with a lower deductible, so you can count on your premiums rising.
On the flip side, if your ACA plan has a lower deductible, you could save a bundle on monthly premiums by switching to a higher deductible plan. That means you’ll have to pay more out-of-pocket before your coverage kicks in, but, depending on your financial situation — and whether you have money socked away in a Health Savings Account (HSA) — it might be the right move for you.
As open enrollment approaches, it’s important to take a closer look at your plan and any changes that might come into play. You should receive a statement from your insurer that highlights any changes on the way, including changes in premiums or the discontinuation of your current plan. From there, you can decide whether to stick with what you have or try something new. Either way, it never hurts to shop around. You can learn how to shop the ACA exchanges here.
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