10 Obamacare Tips to Save You Money in 2018

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Big changes are coming to the Affordable Care Act (ACA) this fall, which is more commonly known as Obamacare, and they aren't of the variety that's likely to increase enrollment and make the program more sustainable for insurers.

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According to Department of Health and Human Services officials, the Trump administration is slashing outreach and navigator funding for the upcoming enrollment cycle, which begins on Nov. 1, 2017 and ends on Dec. 15, 2017, for the 2018 calendar year. Outreach funding, which involves marketing and advertising to make consumers aware of their enrollment options, is being cut by 90% to just $10 million, while navigator funding (navigators answer questions for consumers and guide them in their search for an ACA plan) will be cut by 41%. The administration justified the latter cut by pointing out that navigators hadn't been hitting their enrollment objectives.

In addition to less funding being available for marketing for the upcoming enrollment cycle, premiums are also expected to soar. President Trump has made it crystal clear that repealing and replacing Obamacare is a prime goal while he is in the Oval Office. The uncertainty created by Trump's and the GOP's efforts to repeal, coupled with ongoing losses for a number of national insurers, has precipitated a huge spike in rate requests by health-benefit providers.

Obamacare premiums may soar in 2018, but you could still save money

While there is no clear consensus as of yet regarding how much rates could rise nationally in 2018 since many states are still negotiating with insurers, ACASignUps.net estimates that premiums could jump 15.44% across the 47 states it has data on thus far. This scenario assumes that the Trump administration keeps cost-sharing reductions (which help lower the cost of copays, coinsurance, and deductibles) in place. Should these be removed, coupled with no enforcement of the Shared Responsibility Payment (the penalty consumers are supposed to pay for not buying health insurance), premiums could rise by an average of 29.49% across 47 states.

It's not a very pleasant forecast, but there are (thankfully) ways for consumers to potentially save money in the upcoming year. Here are 10 Obamacare tips that could help put extra money in your pocket when shopping for health coverage.

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1. Apply for Advanced Premium Tax Credits

The first move you'll want to consider making is applying for the Advanced Premium Tax Credit (APTC) if you're earning between 100% and 400% of the federal poverty level. APTCs are the subsidy attached to the ACA that lowers your out-of-pocket premium costs. The APTC is an especially helpful tool for seniors aged 50 to 64 and lower-income individuals and families that makes their premiums affordable.

In 2018, the federal poverty level for a household of one will be $12,060, meaning folks with earned income of $12,060 to $48,240 may qualify for the APTC. 

2. Apply for cost-sharing reductions

Similarly, you should also see if you qualify for cost-sharing reductions (CSRs), which help lower your out-of-pocket expenses when heading to the doctor. Those earning between 100% and 250% of the federal poverty level qualify for CSRs, but there is one major catch. In order to receive CSRs, you'll have to buy a silver-tier plan. Even though bronze-tier plans have lower monthly premiums, no CSRs are given to consumers if they purchase a bronze plan. Thus, it's in your best interests to consider purchasing a silver plan if you'll qualify for CSRs.

Based on the federal poverty levels for 2018 coverage, those earning between $12,060 and $30,150 may qualify.

3. Shop around within the ACA network

While it's true that we've witnessed an insurer exodus from the ACA for the upcoming year, consumers still need to take the time to shop around if they hope to get the best deal. Insurers frequently change their premiums and coverage options from one year to the next, meaning the best value one year (note that value may not mean the lowest-cost plan) may not be your best choice the following year.

As noted above, the 2018 enrollment period will be made all the more challenging with Aetna (NYSE: AET) and Humana (NYSE: HUM) announcing their complete exit from the ACA exchanges in the upcoming year, and UnitedHealth Group (NYSE: UNH) slashing their coverage by more than 90% this year from 2016. Even Anthem (NYSE: ANTM), the company behind the Blue Cross Blue Shield name in 14 states, has announced that it'll be pulling out of a handful of states. 

4. Consider going off-network if unsubsidized

If you won't be subsidized by CSRs or the APTC in 2018, it still pays for you to shop around the ACA networks to see if there's an insurance plan that meets your medical and financial needs. However, don't be shy about looking off-network for deals. Private networks like eHealth may offer unsubsidized consumers considerably more options than the ACA exchanges do -- and these private markets are presumably far more stable than Obamacare.

5. Understand your exemptions

Consumers should also understand that they have a number of exemptions at their disposal that may not only keep them from paying the Shared Responsibility Payment, but could also open up new coverage options.

For example, some folks may still qualify for catastrophic insurance coverage, which involves very low premiums but really high deductibles, if they meet certain criteria. For instance, if you're under 30 years old, or you're over the age of 30 and qualify for a hardship exemption, you may be able to purchase a catastrophic plan which, at least from a premium perspective, could be friendlier on your wallet. 

6. Consider staying on your parents' policy, if possible

Arguably one of the greatest aspects of Obamacare is that it allows children to stay on their parents' health plan until they turn 26, which is great for college-aged students who may be too busy focusing on their studies to worry about paying for health insurance. If you're under the age of 26, consider putting hubris aside and latching onto your parents' health plan. Best of all, if you do land a great job with paid coverage from an employer, you can always opt out of your parents' plan.

7. Purchase a gold or platinum plan if you visit the doctor often

Another smart decision to consider is purchasing a pricier gold- or platinum-tier plan if you visit the doctor often or have a chronic illness. Though bronze and silver plans may be tempting for their lower premiums, the deductibles and other out-of-pocket expenses associated with these plans are considerably higher than under a gold or platinum plan. Even with higher premiums, sicker individuals who head to the doctor more often should be able to save money -- and have fewer out-of-pocket surprises -- by choosing a pricier ACA plan.

8. Don't use tobacco products

We Americans typically don't like to be told what to do, but if you want to save some money in the upcoming year on your health insurance, you'll choose to put the tobacco products down.

Under ACA guidelines, only five factors determine what you're charged for health insurance:

  • Your age
  • Geographic location
  • Whether it's an individual or family plan
  • What plan tier you choose (bronze, silver, gold, or platinum)
  • Tobacco use

If you use tobacco, insurers have the right to charge up to 50% more for your monthly premiums. This is because scientific studies have shown that smoking leads to an increased risk of heart disease, cancer, and a host of other ailments.

9. Consider where you live

You should also take into consideration, as pointed out above, that where you live can influence what you'll pay each month for health insurance. States like Wyoming and Alaska have frequently offered the highest monthly premiums in the country because of their minimal population and lack of specialized equipment throughout their sparsely placed hospitals and medical centers. States and counties that have dense populations are often some of the cheapest places to buy health insurance since the likelihood of having specialized equipment nearby is high.

10. Open or contribute to an HSA

Finally, consider opening or contributing to a health savings account (HSA). In order to qualify for an HSA, you'll need to be enrolled in a high-deductible health plan, not be enrolled in Medicare, and be able to say you're not being claimed as a dependent by anyone else. If you meet these criteria, you'll be able to contribute pre-tax dollars to an HSA, which you can then lean on to help cover the costs of eligible out-of-pocket medical expenses on a tax-free and penalty-free basis. Since HSA dollars are pre-tax, it also means contributions can lower your current-year tax liability. 

However, as a quick note, HSA funds can't be used to pay for Obamacare premiums -- just costs associated with receiving eligible medical care.

If you come into the open enrollment period prepared, there's no reason you can't save yourself money on health coverage in the coming year.

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