With concerns over healthcare costs and access top of mind for most, consumers should be aware of changes to the Affordable Care Act going into effect this year. The deadline for open enrollment is Jan. 31, so anyone wanting to sign up for or make changes to health insurance purchased through HealthCare.gov, the federal marketplace created by the ACA, must do so by then.
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“There will be no special enrollments around tax time,” said HealthCare.gov CEO Kevin Counihan. “This is the deadline for 2016.”
Many costs associated with the program are increasing this year, with before-subsidy premiums generally rising overall. Additionally, penalties for those who don’t have qualifying health coverage and fail to enroll in a health insurance plan this year will increase. For 2016, the fee for choosing to go without health insurance will increase to $695 or 2.5% of income, whichever is higher.
Changes to the employer mandate also went into effect on Jan. 1, 2016, requiring employers with 50 or more full-time employees to provide affordable health insurance to workers or face penalties. In 2015, the rule applied to employers with 100 or more employees.
As of late December 2015, more than 11 million Americans had selected or been automatically re-enrolled in a 2016 Marketplace plan, according to the Department of Health and Human Services. A key statistic for those who play out risk analysis: Approximately 35% of those who enrolled in a marketplace plan are younger than 35. Nearly 3 million are in the coveted 18- to -34-year-old category.
“We are growing faster than expected, and we are going after people who use services less and are less motivated to buy health insurance,” said Counihan. “What you are afraid of is a constant risk pool that ages. We are refreshing the risk pool with younger people. This year is about a better mix of risk, and we are very encouraged.”
But, “the jury is still out on whether younger, healthier people will sign up and make it work overall,” said Gerry McCarthy, president of TransUnion Healthcare, a provider of data and analytics. “Everyone has to be in it to dilute the costs and make it cheaper for everyone.”
Concern over costs is a top issue, with a majority of Americans citing “affordability” as the most important aspect of the healthcare system today, according to a poll conducted by the nonprofit Transamerica Center for Health Studies.
“The Affordable Care Act is great because it is bringing access to millions of Americans,” said McCarthy. “But it is also bringing financial burdens and hardships. ... People are often shocked by the financial jeopardy they experience when they sign up for higher-deductible plans.”
For 2016, 60% of re-enrollees in HealthCare.gov states switched to different plans from what they had in 2015. McCarthy says consumers are shopping around more when it comes to their plans not only to offset the “sticker shock” of premiums and deductibles but also to make sure that their preferred doctors, hospitals and prescription drugs are covered by their marketplace plans.
“Consumers should look carefully at plans when selecting,” advised health economist Kosali Simon, a professor at the School of Public and Environmental Affairs at Indiana University Bloomington. “They might want to be a more involved consumer. The sense we have is that the networks of the marketplace plans are not as vast as employer plans.”
Tools are available on the HealthCare.gov site to help consumers understand out-of-pocket exposure in total, as well find out if their physicians, facilities and medications are covered under selected policies, said Counihan.
But even Americans who select health insurance through traditional employer plans should be diligent about checking changes to their policies this year. “Don’t make assumptions,” said Hector De La Torre, executive director of the Transamerica Center for Health Studies. “It’s very fluid what plans are offering. Insurance companies are trying to control costs and adapt to the new reality.”
At Landmark Benefits in Hampstead, New Hampshire, brokers who primarily work with large corporations and employer-provided benefits have found themselves helping individual walk ins who seek assistance navigating the exchanges.
“Brokers are taking a financial loss to help people understand the benefits,” explained Landmark’s president Tom Harte, who also serves as president of the National Association of Health Underwriters. He described employees filling out the HealthCare.gov forms with customers, then waiting out long online cues and hotline hold times. Sometimes, he said, enrollees then get flagged to supply additional income verifications to qualify for subsidies or required appeals to get the tax credits they deserve. “It takes time and effort,” he said. “But I feel a sense of obligation to my community.”
The Affordable Care Act, he said, has made the insurance system “more broken than ever before. ... The market has changed significantly. There is less opportunity, less competition, and that means insurance is more expensive.”
Simon said it isn’t exactly that bad, but it isn’t great, either.
“There are camps who have thought it would be a disaster. That hasn’t happened,” said Simon. “Others thought it would be fabulous--everyone on insurance, health status improved, etc. Early results don’t suggest either will happen. I think what will come out is that we have to wait to pass judgment.”