If you plan on purchasing your medical insurance for next year from the Affordable Care Act's exchanges, be prepared for some significant changes.
This year, the ACA enrollment period began November 1 and ends December 15. That’s over two weeks shorter than in 2016.
The reduction in time is compounded by the fact that the budget for advertising the enrollment period was cut by 90 percent, and funding for navigators - the people who helped enrollees understand their options -has also been slashed. In, Ohio that funding saw a 70 percent reduction.
When it comes to month-to-month expenses, consumers in Ohio should be most concerned about something called "cost-sharing subsidies." These are the federal subsidies granted to lower- and moderate-income individuals to help them afford insurance from the health care marketplace.
Last month, the Trump administration announced that they would not be paying their part of these cost-sharing subsidies to insurers. There’s a chance that Congress will appropriate the funding, but this has caused a considerable amount of uncertainty for insurance companies.
By law, companies are required to offer the subsidies, regardless of whether or not they get reimbursed for them. As a result, they’ve increased the cost of their premiums in order to avoid any potential losses.
Annual income and what plan an individual chooses to purchase are the strongest factors influencing how hard they’ll be hit by this year’s premium increase.
The health care marketplace offers three tiers of insurance plans: bronze, silver and gold. Because cost sharing subsidies were tied to the silver plan, Ohio insurance companies placed the majority of their premium increases on the silver plan .
Jennifer Tolbert, with the Kaiser Family Foundation, says that some consumers this year will find the bronze and gold plans are more affordable options.
“They may be able to purchase bronze plans that are cheaper than what they paid last year, and also gold plans that are cheaper than what they paid last year,” Tolbert says.
There is a bright side, though: An increase in premiums also means an increase in subsidies and tax credits for those who qualify. Last year, 82 percent of Ohioans qualified for some form of financial assistance.
Tolbert says that this year, these consumers may not see a drastic increase in their out-of-pocket cost.
“[The increase in premiums] gives consumers bigger tax credits that they can then use to buy the silver plan at the same cost, or they can take that bigger tax credit and apply it to bronze plan and pay less, or apply it to a gold plan and pay less than what they would have paid last year,” Tobert says.
Here's an example: A 30-year-old with no family, making about $24,000 a year, will pay $129 a month for a silver plan. That’s only $2 more a month than what they would have paid last year.
Who will be most impacted by this year's changes? According to Tolbert, Ohioans who make too much to qualify for the tax credits. That’s anyone making more than 400 percent of the federal poverty line.
For example, that could be a single 30-year-old making more than $60,000 a year. They’ll pay nearly $400 a month for the silver benchmark plan - nearly $100 more per month than last year.
If you’re older and make too much to qualify for any financial assistance, your cost will go up even more. A 55 year-old making $60,000 a year will see the cost for a silver benchmark plan increase by 25 percent, or about $200 a month.
