2020 has caused a lot of changes. Not to mention the fact that unemployment rose higher in three months during the global pandemic than it did in two years during the Great Recession. This shift in the U.S. economy, coupled with the worldwide epidemic, is causing changes to the Affordable Care Act.
Amid uncertainty during a pandemic and a U.S. Supreme Court challenge, open enrollment for the Affordable Care Act marketplace is underway in all 50 states. When the Affordable Care Act was passed and implemented back in 2010, health insurance became mandatory for all U.S. residents.
Last fall, about 11.41 million consumers in all 50 states and the District of Columbia signed up or were automatically reenrolled in Marketplace plans during the 2020 open enrollment period. That number is expected to rise this year because an estimated 20 million people have lost their jobs since February.
This year’s open enrollment is looking different than year’s past. Everything from COVID-19 to historic job losses is impacting the ACA marketplace. This year, there are more newcomers to the market, people who lost their employment-sponsored insurance from COVID-19 layoffs. Statistics show that up to 12 million Americans may have lost their employer-sponsored health insurance during the pandemic.
The ACA exchange is an excellent option for people looking for health insurance options after losing employer-sponsored insurance. Many ACA consumers receive tax credits premiums if their estimated income is between 100% and 400% of the federal poverty level.
Whether you are new on the marketplace or reenrolling, you have to sign up for 2021 coverage through the ACA Marketplace during the open enrollment, which takes place from November 1 through December 15 in most states. To find your state’s open enrollment period and marketplace website, click here.
Now, let’s go over what’s different during this year’s open enrollment than the process in previous years.
President Barrack Obama created the ACA to help Americans struggling to find affordable, adequate healthcare in the wake of the 2008 financial crisis. Since the ACA was signed into law, the economy has been strong. Then 2020 hit. This year’s open enrollment may be the first true test of how well ‘Obamacare’ will work to help Americans maintain health coverage after they lose their job-sponsored health insurance. As the global pandemic rages on and job loss becomes more prevalent and more permanent, more employer-sponsored insurance loss is likely. The Kaiser Family Foundation estimates that as many as 85% of people at risk of becoming uninsured due to loss of job-based coverage could be eligible for Medicaid or subsidized marketplace coverage.
Awareness of these key ACA programs is slipping; a survey found that 59% of the public knows the ACA offers subsidies for marketplace health plans, compared to 75% a decade ago. The understanding of ACA’s options and enrollment rules becomes even more limited. 43% know that the time to sign up for marketplace plans is known as open enrollment. Only 14% of uninsured individuals living in states with expanded Medicaid eligibility under the ACA know about this expansion. What’s more, many people aren’t sure whether the ACA is still in effect. According to KFF, only 22% of uninsured people know the law is still in development. As awareness falls, so does enrollment. A lot of states are experiencing dramatic declines in ACA enrollment. Six states saw unsubsidized enrollment drop by more than 40%, including a 73% decline in Arizona.
We are amid a global pandemic, and we continue to hit record numbers of cases daily. People must have adequate health insurance because a COVID-19 related hospital stay can cause severe financial ruin for uninsured people. Figures show that the average charge for a COVID-19 hospital stay without health insurance is $73,300.
Many private insurers have waived out-of-pocket costs for COVID-19 patients. At the very least, people with ACA-compliant private insurance can rest somewhat easy knowing they are protected by out-of-pocket maximums, which limits how much enrollees have to pay for hospitalization. Currently, there is no guarantee that hospitals will waive COVID-19 treatment costs for uninsured patients. That means people without coverage are responsible for astronomically high hospital bills.
ACA insurance premiums fluctuate from year-to-year. But, this year, COVID-19 is impacting them as insurers face a global pandemic, record unemployment, and unknown future costs for a COVID-19 vaccine. (Link to our post about covid 19’s impact on ACA). You may be surprised to hear; however, the premiums are declining by an average of 2%. Premiums in Maine are dropping a whopping 13%. Insurers attribute the decrease to state reimbursement programs.
But, not everyone will see decreases. Customers in Kentucky will see a 5% increase. Insurers that increased rates say they are due to rising COVID-19 costs, a vaccine's cost, and other factors.
Learn more about How COVID-19 is Changing Insurance Coverage.
COVID-19 has thrown a wrench into the world’s plans. As a result, the exchange extends the deadline for victims of the COVID-19 disaster and natural disasters to sign up for 2021 coverage. Like prior years, people who live in FEMA-designated areas hit by a natural disaster can receive extra time to sign up for coverage. This extension is also available for Americans who can’t sign up on time due to COVID-19.
The individual mandate was repealed for 2019. This means that Americans without health insurance in 2019 and 2020 won’t be subject to tax penalties. The new rule gives exemptions to people living in counties where no health insurance companies offer coverage, or only one insurer offers coverage. But, it’s important to note that some states have their mandates, including:
District of Columbia
You can still receive a tax penalty if you don’t have health insurance in those states.
By 2021, more insurers are stepping back into the ACA marketplace or are expanding into new counties. Overall, 22 more insurers will offer plans in 2021, bringing the total to 181. Some major insurers, such as UnitedHealthcare, the nation’s biggest insurer, decide to expand their presence after leaving the exchanges because of mounting financial losses. Anthem and Cigna have also made incremental moves over the past two years.
In New Jersey and Pennsylvania, residents will choose to buy their coverage from new state-based marketplaces. Lawmakers in New Jersey and Pennsylvania said being able to run their marketplaces gives them more control and may save them money over time.
Insures in 19 counties in Washington State will offer public option plans. These plans include all of the standard benefits like lower deductibles and quality standards. These public plans aim to be less expensive, and their rates are tied to Medicare.
There are many reasons why premiums vary from state to state, according to insurers. The reasons include the number of insurers and hospitals in an area, which then affects the insurer’s ability to negotiate with providers. Since subsidies are tied to each region’s benchmark plan, and the premium costs might have decreased, subsidies could also decrease.
Benchmark plans are a region’s second lowest-priced silver plan. Switching to the benchmark plan is a way to help consumers maintain how much they spend on premiums.
You must update your financial information. Especially this year, as many people are affected by job losses. You can update your information online or contact your marketplace for help. When you are shopping for a new plan, be sure to:
Check whether the doctors, hospitals you want to use are included in the plan’s network.
The plan’s premium, or the fixed monthly cost you pay for a health insurance policy
Take a close look at annual deductibles. A deductible is an amount you must spend on healthcare services in a given year before your insurance company will cover them. Sometimes the trade-off of choosing a cheaper premium could be higher annual deductibles.
The maximum out-of-pocket cost you have to pay. An out-of-pocket maximum is a maximum amount you must pay for covered services over a year. Once you reach this limit by spending on deductibles, co-pays, and coinsurance costs, your insurer pays 100% for the remaining year. This is something incredibly important to check for amid the global pandemic.
See more in our Guide to Choosing a Health Insurance Policy.
If you are shopping for a new insurance plan or interested in seeing what private options are out there, PolicyScout is the place to be. For further guidance and resources on healthcare, which health plan to choose, and open enrollment, click here. PolicyScout provides information on types of health insurance plans, information on HSAs, FSAs, and HRAs, and health insurance cost, all in one easy-to-find location.