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Shopping for Your Ideal Obamacare Health Plan

Since Congress passed the Affordable Care Act in 2010, there has been an ongoing series of changes to the program commonly known as Obamacare.  Initially intended to help all Americans obtain reasonably priced health insurance, the Affordable Care Act established health insurance exchanges that offered policies that were subsidized by federal tax credits. For more than 12 million Americans, the new subsidized health plans provided a way to finally get health coverage for themselves and their families.

Although the health insurance exchanges are still in place, there have been some significant changes since they were initially established.  Many of the insurers that were previously involved in offering health plans through the exchanges have since departed, limiting the number of available plans in many U.S. counties. Although every county in the nation has at least one health plan, major insurers like Aetna, Humana, and UnitedHealth Group have left or plan on leaving the Obamacare exchanges.

The primary reason for these departures is that much of the business on the ACA-sponsored health insurance marketplaces was unprofitable for insurers. For example, Aetna reported losing $700 million on the exchanges from 2014 to 2016.  There are many reasons why this particular business model was unsuccessful, but the fundamental cause was that not enough young, healthy people were enrolling, leaving insurers with only costlier, unhealthy enrollees.

Unfortunately, the rising costs of insuring these sick enrollees translated into higher premiums for existing enrollees. This, of course, led to a shrinking pool of beneficiaries as more people were priced out of the market.

Current State of Obamacare

Given the many problems that Obamacare is facing, many people are surprised it is still in operation.  The common misconception that the Affordable Care Act was scrapped was undoubtedly influenced by multiple attempts by the Republican-controlled Congress to repeal and replace it in 2017.  Despite coming close on several occasions, Congress was unable to pass legislation that would have turned back the clock on Obamacare.

This leaves the Affordable Care Act as the law of the land, along with the bulk of its related programs including the health insurance exchanges and the Medicaid expansions that many states opted for. Although the majority of the Congressional ACA repeal bills focused on rolling back the Medicaid expansion, there was at least one bill that would have helped solidify the operations of the insurance exchanges by formally making the government responsible for making cost-sharing payments to insurers.

If you are not familiar with cost-sharing payments, they are subsidy payments to insurers that offer discounted low-cost health plans on the exchanges.  These payments go towards keeping deductibles and other out-of-pocket expenses low on lower tier plans. After a legal challenge to this provision of the Affordable Care Act, the Supreme Court struck it down, allowing the government to make cost-sharing payments optional. Although the federal government has continued to make these payments including $7 billion so far in 2017, President Trump recently announced that he would discontinue them.

The halt in cost-sharing payments poses a serious problem for the Obamacare exchanges.  Although the payments went specifically towards helping lower tier plans, the reality is that these subsidies helped maintain lower costs for all plans. Fortunately, many state insurance boards that regulate the exchanges have allowed insurers to only raise premiums on Silver tier plans.  Also many insurers had been expecting the stoppage in payments and have already structured the plan pricing to reflect loss of subsidies; so many enrollees do not need to expect additional price increases.

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Shopping during Open Enrollment

One very important thing to note this year is that the government has shortened the Open Enrollment Period for 2018 to only include days from Nov. 1 to Dec. 15.  Not only is this a significant shortening in the Open Enrollment Period, but you should be aware that the website may not be available on every day.  The administration announced that the online portal would be taken down for maintenance from midnight to noon of every Sunday except on Dec. 10.

If you are looking for a new plan from one of the Obamacare exchanges be sure to carefully examine the costs. Look closely at how much you are receiving in tax credits before you make a final decision.  You may find that because of the elimination of the cost-sharing subsidies and a resulting bump in the premiums of Silver tier plans, you may actually pay less for a Gold tier plan (which covers almost 80 percent of medical expenses rather than a Silver plan’s 70 percent).  This is because insurers are only allowed to raise premiums on Silver plans in some states, while your federal tax credit remains the same or increases.

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Under the Affordable Care Act, any rise in premiums for health plans on the exchanges must be offset by an increase in tax credits. Therefore, if you are already signed up for an Obamacare health plan, you probably shouldn’t see a bump in your plan premiums for next year.

However, you should invest some time looking at other plans in your area, just in case there is a better deal available.  Be sure to look at other plans before Dec. 16, however, because that will be the day your plan is automatically renewed—unless you make a change.  If you miss this deadline, you may be stuck with your current plan throughout 2018.

You may also wish to check out health plans not found through the exchanges.  The additional costs from the halt in the cost-sharing payments are only added to Obamacare plans in some states.  That may mean that non-ACA plans may actually cost less in some regions.  Keep in mind however, that many non-ACA plans may not include the same benefits as those regulated by the Affordable Care Act.

If you would like to learn more about Obamacare or non-ACA health plans available in your area, please visit Boost Health Insurance and speak with one of our highly knowledgeable insurance brokers.

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