5 Things To Know About The Health Insurance Marketplace Special Enrollment Period
In an effort to shore up health care coverage for Americans facing a double whammy of unemployment and health risks from the coronavirus pandemic, President Joe Biden has reopened the health insurance marketplace for a special enrollment period. From Feb. 15 through May 15, 2021, anyone seeking coverage can apply for an Affordable Care Act (ACA) plan.
Prior to Biden’s executive order, most states only permitted enrollment in a marketplace, or ACA plan, from Nov. 1 through Dec. 15, or if you experienced a qualifying life event, such as having a baby or losing health insurance you had through a job.
According to a study by Kaiser Family Foundation (KFF), a health care issues nonprofit, Biden’s order to reopen the health insurance marketplace gives nearly 9 million uninsured Americans access to free or subsidized health insurance.
However, there’s no singular plan that’s a fit for everybody, and parsing the various options can be challenging for anyone. Here’s what you need to know before signing up for a plan during this special enrollment period.
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- Seek Professional Advice to Choose a Plan
Selecting the right health care plan for all but the most basic coverage requires a thorough analysis of your unique circumstances. Don’t go it alone.
“A lot of times people will enroll without help and find out when it’s too late that they signed up for the wrong plan,” says Jason Alford, VP of sales and business development at Health First Health Plans.
There’s no cost to you to use an independent insurance agent (because agents are paid commissions by the insurer) and they can help you identify a plan that will suit you and your family needs more efficiently than you might on your own. Insurance agents can review both plans on the health insurance exchange and plans with private insurers and your premiums will be the same cost whether you make use of an agent or muddle through the details yourself.
If you do use a broker, make sure they’re licensed and have a contract to sell marketplace health plans. Otherwise, they may not be able to provide the widest array of options for your situation and budget. Most importantly, if you qualify for savings and/or subsidies like tax credits from a marketplace health plan, make sure your broker knows this so they will review only relevant options. You can find a certified marketplace broker on the HealthCare.gov Find Assistance page.
- Consider Whether You Want a Tax Credit or a Subsidy (It’s Not the Same Thing)
To qualify for a health care subsidy, which is a reduced cost health plan, your income must be too low to afford your employer’s health insurance, you don’t have access to health insurance through an employer or you don’t qualify for public health care assistance options like Medicare and Medicaid. For 2021, the subsidy income range in the continental U.S. is from $12,760 to $51,040 for an individual, and from $26,200 to $104,800 for a family of four.
If you end up earning more money later in the year, and are no longer qualified to receive those subsidies, you’ll have to pay back the amount that was subsidized. This can happen if you get a raise, for example. If you were financially affected by the pandemic last year, but expect that you will find a job before the end of 2021, an upfront subsidized plan may not be to your advantage.
If you think this might be the case for you and you qualify for a subsidy now, consider taking it as a tax credit when you file your taxes instead of taking it as an upfront reduction in your monthly premiums.
- The Cheapest Plan Isn’t Always the Best
The four types of coverage on the health care marketplace are known as the “metal” plans: bronze, silver, gold and platinum. Like their namesakes, a silver plan has higher monthly costs than a bronze plan and gold costs more than silver. Platinum is the highest level.
For the special enrollment period, these are the average monthly premium costs for a single 40-year-old before any tax credits or subsidies, according to an analysis by KFF:
Lowest cost bronze premium: $328
Lowest cost silver premium: $436
Lowest cost gold premium: $481
With each increase in price, however, comes a corresponding increase in coverage:
Bronze plans cover about 60% of your medical costs
Silver plans cover about 70% of your medical costs unless you’re eligible for income-based subsidies or tax credits cost-sharing
Gold plans cover about 80% of your medical costs
Platinum plans cover about 90% of your medical costs
Although you may be tempted to pick the plan that costs the least upfront, this plan may cost you more over time through out-of-pocket costs, and because cheaper plans cover less of your overall health care costs.
If you have recurring medications, for example, and you choose a plan that has the cheapest premiums but little to no prescription coverage, you could end up paying much more then if you had bought a plan that costs a little more each month but had much richer pharmacy benefits.
“Really seek to understand the costs within the plan to avoid surprises down the road,” says Alford.
- Consider Your Current and Future Financial Situation
If you’re unemployed as a result of the pandemic but expect that once a vaccine is widely available you’re likely to find a job within the next several months, that should weigh heavily in your calculations towards any health care plan.
“If you’re not eligible for a subsidy towards an health care marketplace plan, look to a short-term medical plan or similar alternative,” says Jeff Smedsrud, president of insurance services for Healthcare.com, an online health insurance marketplace. He says this may be a more cost-effective solution for someone who is likely to only need short-term emergency coverage.
Short-term insurance is commonly used to bridge a coverage gap during a time of transition, such as if you’ve retired a few months before you’re eligible for Medicare, or you’re in between jobs and want a fast and flexible solution. Although short-term insurance can often have lower premiums than health care marketplace plans, it’s not a guarantee that it will provide the coverage you need outside of an emergency.
Short-term plans only cover a handful of medical scenarios like emergency hospital expenses and limited preventative care, depending on the plan you choose. Because the coverage is limited and only expected to be held for a limited amount of time, the monthly premiums are generally less expensive than marketplace plans.
All plans on the government-sponsored marketplace, by contrast, are required to provide coverage to those with preexisting conditions as well as ten essential health benefits; short-term insurance plans are not. You’ll have to weigh the risks of having just minimal coverage before deciding which option might be best if you expect to get a new job that offers health care benefits within the next year or so.
- If You Have COBRA, Don’t Discount It as Your Best Option
If you’re out of work, but had health care benefits through your previous employer, find out if you’re eligible for continuing coverage benefits. This option is commonly called COBRA, for the Consolidated Omnibus Budget Reconciliation Act, which established the right for employees to keep their coverage for a limited period of time after their employment ends. This coverage does come at a price, though: Former employees may be required to pay the entire cost of their premium, which could be thousands of dollars per month.
Although COBRA may seem like the most expensive option, Smedsrud says that may not be the case for everyone.
“If you had a job and you lost it in June, [with COBRA] you don’t start a new deductible, you don’t start new copays, all those things that can add up,” he says.
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