Health Care: Insurance deadlines and how to sign up during Obamacare open enrollment for 2018
It’s that time again. Open enrollment for Healthcare.gov 2018 health plans ends Friday, Dec. 15, and your deadline might also be approaching if you are insured through your employer rather than Obamacare aka the Affordable Care Act (or ACA). While you may dread the thought of dealing with the electronic paperwork and confusing choices, the process might be more enjoyable if you think of it less as a treacherous financial chore and more as a money-saving opportunity.
“Shopping for health insurance is about as entertaining as picking dryer lint off your clothes,” Michelle Andrews wrote Tuesday in Kaiser Health News. “But this year it’s essential to... review the plans offered in your area.”
Open enrollment is your annual chance to check up on your insurance plans, including medical, dental, life, vision and disability coverage, and figure out how you can save money by picking one that’s a better fit or value for your needs. For example, if you desperately need a new pair of glasses, but held off on getting them — because a new pair costs $100 and you never signed up for vision coverage at work — well, now is the time to get on that.
And even if you have the option of just auto-enrolling in your old plan again, know that you could save hundreds or even thousands of dollars by taking a deep breath and actually reading through your existing plan’s new terms for 2018. That’s especially important for anyone with a plan through the ACA, as you may discover that the cost has changed significantly from 2017 in terms of monthly payments, cost of prescriptions or the amount you have to pay out before your insurance actually starts picking up the tab.
And in case you need another reason to get excited about open enrollment, consider that not signing up for any insurance will cost you big time, unless you qualify for an exemption. The 2017 fine was $695 for individuals, or up to $2,085 per family, and the 2018 fine will be adjusted up for inflation.
Need some help? Here are answers to your biggest health insurance questions.
When is Obamacare open enrollment & how do I get the best health care plan in 2018?
You’ve only got a 45-day window — from Nov. 1 to Dec. 15 — to enroll in ACA coverage starting on Jan. 1 if you live in one of the 39 states that use the federal marketplace, better known as Healthcare.gov.
However, some states that run their own exchanges, including California, Colorado and Minnesota, and have extended their deadline into January. Other states with their own marketplaces include Connecticut, Idaho, Maryland, Massachusetts, Mississippi, New Mexico, New York, Rhode Island, Utah, Vermont and Washington. Washington, D.C., has its own marketplace as well.
Don’t sleep through the open enrollment period if you’re getting coverage through health exchanges created through the Affordable Care Act. While you will be auto-enrolled if you are already signed up for a 2017 plan and do nothing, you’ll lose the chance to shop around for a better deal or report a change in income that could lower your costs.
The most important change to be aware of is that your monthly payments, also called premiums, could rise significantly — by an average of 34% — to $743 a month for mid-tier silver plans, according to an analysis by the consulting firm Avalere. The increase can vary significantly by state, however, with prices actually dropping 22% in Alaska and rising by a whopping 116% in Iowa.
The easiest way to save on your premium is through a tax credit that can be applied directly to your monthly payments if your income is 400% or less than the Federal Poverty Level, which in 2016 was $12,060. (So a single person who earned up to $48,240 was eligible for these subsidies.)
If your income is below 138% of the FPL — which works out to $16,643 — you may qualify for Medicaid in states that have expanded that coverage. And if you make less than $12,060, you can get Medicaid in every state. Be sure to estimate your income carefully, as you may be required to pay back your subsidies if you make significantly more than you estimated.
You may also be eligible for a cost-sharing reduction, which lowers your out-of-pocket costs for things like deductibles, coinsurance, copayments and out-of-pocket limits. For example, if the deductible on your silver plan is normally $750 and you qualify for the reduction, you may only have to pay $300 of that, depending on your income. The one catch: Because the Trump administration has said it may stop covering the cost of these payments to insurers — who are nonetheless still legally required to provide them to consumers — you might end up paying a higher monthly premium.
If you don’t qualify for a tax credit or subsidy, there are still ways to save money, by comparing the monthly premiums for each plan, which can vary significantly. In general, bronze plans have the lowest premiums and the highest deductibles; platinum and gold plans have the highest premiums and the lowest out-of-pocket costs; and silver plans strike a balance.
The cheapest individual platinum plan in New York county in New York state, for example, starts at $636 a month with no deductible and a $4,000 out-of-pocket maximum. The cheapest bronze plan, on the other hand, starts $367 a month with a $4,000 deductible. (If you’re under 30 or qualify for a hardship exemption, you can also get a “catastrophic” plan, starting as low as $164 a month with a $7,150 deductible, in New York county, as an example.)
Silver plans have typically been the best deal, both because they qualify for cost-sharing reductions and because their relatively moderate out-of-pocket maximums ($2,000 is the lowest in New York county) help rein in your total expenses. The most popular silver plans cover about 70% of your health costs without cost sharing, or up to 94% with it.
However, in a weird twist for 2018, some gold plans may now actually be cheaper than silver ones for people receiving tax credits. “With the price of silver plans rising faster than the other categories, most consumers with subsidies will now be able to buy a lower-deductible health plan for the same price as the silver plans that are currently most popular on the exchanges,” the New York Times reported.
What’s more, in some states people who qualify for tax credits will be able to get bronze plans with no monthly premium, the Wall Street Journal reported. Just remember that if you need to visit the doctor often, even a zero-premium plan could cost you more in the long run if you never reach your deductible.
So make sure to check all your options before settling on a plan.
How to pick the best job-based health insurance plan for 2018 at work
If you are among the 150 million Americans with health insurance through your job, chances are that insurance will be cheaper than plans offered through the marketplaces, which currently cover another 10 million people, because employers subsidize a big chunk of the cost.
For example, the average annual cost of an HMO for a single person was $6,576 in 2016, according to a Kaiser Family Foundation survey of more than 1,900 employers, but employees paid only about $1,200, or just 18% of the total cost. At around $100 a month, that price is well below the marketplace plan price of $743 a month for the average silver plan.
And while you could still apply for a health plan through the marketplace if your job offers you insurance, you’re unlikely to get a subsidy so long as your employer’s plan is considered affordable and meets the minimum coverage requirements. These include preventive health services, coverage for pre-existing conditions, mental health benefits and more.
Employers also set their own dates for open enrollment, which can run as briefly as a few weeks, so you need to act fast if you want to sign up or switch to a new plan. A good plan of attack is to look at your health expenses for 2017 and see if you paid more out of pocket than you had anticipated when you originally signed up. If so, look for ways to lower your costs by switching to a plan with higher premiums and lower copayments and deductibles.
You could also save big if your plan is eligible for a health savings account, which lets you use pre-tax dollars to cover out-of-pocket expenses. The great feature of HSAs is that they are top-line deductions on your tax returns, meaning that you get a dollar-for-dollar reduction on your taxable income for any money you put in, up to the 2018 contribution limits of $3,450 for single people under 55 or $6,900 for family coverage.
One big catch? You can contribute to a HSA only if you have a high-deductible health plan. While that typically means any plan with an annual deductible over $1,350 for an individual or $2,700 for family coverage, many plans with high deductibles aren’t actually HSA-eligible. To find out if yours is, ask your benefits administrator before you sign up for a high-deductible plan.
It’s also wise to use the open enrollment period to add dental and vision coverage if you don’t already have it, as well as to look into any other kinds of insurance that your employer may offer.
Health insurance mumbo jumbo, explained
If you’re just coming off your parents’ health plan or are otherwise new to the whole open enrollment process, it helps to understand some of the basic terminology that determines your total costs. Here are five key terms to help you understand how health insurance works.
This is the amount of money you must pay every month just to have coverage, regardless of whether you ever set foot in a doctor’s office. If you are healthy, this will be your largest cost. It worked out to about $100 a month per person for employer-based plans, according to Kaiser, and will be about $743 a month on average for an ACA plan if you don’t qualify for a tax credit.
A set amount of money you have to spend out of pocket before your insurance starts paying the bill. Deductibles can be up to thousands of dollars a year and are one of the biggest determiners of your total expenses.
When you go to the doctor’s office, you may be asked to pay a small amount upfront before you can see the doctor. A typical amount is $20, but it can be more or less than that depending on your plan, whether you are seeing a specialist or if you are being admitted to a hospital. Whether or not your copayment counts toward your deductible depends on your plan.
Some plans also require you to pay a certain percentage of the total bill out-of-pocket, often around 20% of the cost. This is in addition to your copayment and does not count toward your deductible. You don’t have to pay this until after you get your bill and explanation of benefits in the mail.
The maximum amount of money you’ll have to spend each year before your health insurance picks up the rest of the tab. This amount is higher than your deductible because it also includes the price of prescriptions, copayments and coinsurance. For marketplace plans, the 2018 out-of-pocket maximums are $7,350 for individuals and $14,700 for coverage for more than one person.
Sign up for the Payoff — your weekly crash course on how to live your best financial life.