Affordable Care Act Enrollment: 5 Money-Saving Tips for 2018

It's that time of the year again: Open enrollment for the Affordable Care Act (ACA), which you probably know better as Obamacare, is in full swing. Enrollment began on Nov. 1, as it has in recent years, and it'll continue through Dec. 15 in most states. Keep in mind there are a handful of states where enrollment may continue for weeks beyond this Dec. 15 deadline.

Obamacare will look quite different in the upcoming year

For the millions of people who purchase their health insurance through an ACA exchange, things are probably going to have a different feel this time around. The first thing you're likely to notice is a double-digit percentage increase in year-over-year premiums in your state. An exodus of insurance companies has reduced competition and buoyed pricing power. Giants like UnitedHealth Group (NYSE: UNH) have reduced their state-based coverage by more than 90%, while both Aetna (NYSE: AET) and Humana (NYSE: HUM), which had at one time tried to merge but were shot down by regulators, are leaving the ACA entirely in 2018. But this is far from the only concern.

The other major change, and arguably the biggest reason insurance premiums are skyrocketing in 2018, is President Trump's ending of cost-sharing reductions (CSRs). CSRs were a core subsidy tied to Obamacare for low- and middle-income folks who bought a silver plan and earned up to 250% of the federal poverty level. CSRs reduced the costs of copays, coinsurance, and deductibles tied to visiting a doctor.

Without these subsidies, more than 6 million people could struggle to afford the costs of receiving medical care. That's forced insurers to substantially push up their premiums with the thought being that they're either losing out on valuable government-sponsored revenue, or that previously covered CSR members could leave insurers stuck with a bill they can't afford to pay.

Five ways to save money on an ACA-exchange plan in 2018

With the Affordable Care Act and the Shared Responsibility Payment (the penalty you pay for not purchasing health insurance) remaining the law of the land in 2018, consumers will need to dig deep to save money when purchasing insurance. Here are five such ways smart consumers can save money when buying an ACA exchange plan.

1. Apply for Advanced Premium Tax Credits

Though CSRs are a thing of the past, Advanced Premium Tax Credits (APTCs), which help lower premium costs for around 10 million Americans annually, will still be paid out by the federal government to insurers. To qualify for the APTC, a consumer or his or her family has to have earned between 100% and 400% of the federal poverty level (anything below 100% would likely qualify a person or family for Medicaid). In 2018, the federal poverty level for a single individual is $48,240, or $81,680 for a family of three. If you expect to earn below this threshold, you could qualify for significantly lower premiums that'll save you money.

2. Shop around within your state

Another money-saving tip is to always, and I really mean always, shop around on the ACA exchange within your state. The coverage within an insurance plan often changes from year to year, as can the premium price for that plan. In plainer terms, what was once the best value for you in 2017 may not be the best plan for you in 2018.

You'll also note that I'm not using the terminology "lowest price," because the lowest-priced plan may not offer you the best value for your medical-care needs. This is why you need to shop around the ACA exchanges and see what's covered in each plan, as well as understand what your portion of the costs could be, such as deductibles and copays.

3. Stay on your parents plan, if possible

Are you under age 26? Then it might be worthwhile to take advantage of one of Obamacare's primary perks, which is being able to stay on your parents' health plan through age 25.

In 2017, according to data from HealthPocket, the average unsubsidized bronze plan (the lowest-priced tier of ACA plans) was about $311 a month, or more than $3,700 a year. Mind you, this doesn't even factor in potential deductible, copay, and coinsurance costs. While children under the age of 25 may qualify for the APTC, quite a many could struggle to handle the exorbitant costs of purchasing health insurance and would benefit from remaining on their parents' plan.

4. Consider a gold or platinum plan if you have a chronic condition

Sometimes the best way to save money is by actually spending a bit more money up front. While most folks purchase silver or bronze plans because of their attractive premium price points, bronze and silver plans also leave consumers exposed to higher out-of-pocket costs, should they require medical care. Comparatively, gold and platinum plans leave consumers the least exposed to surprise out-of-pocket expenses, but their premums also cost more on a monthly basis than bronze or silver plans.

People with chronic health conditions who are liable to visit the doctor often and could incur substantial out-of-pocket expenses would be wise to consider purchasing a gold or platinum plan in their state. Again, don't just grab the first gold or platinum plan you see. Shop around and see which one offers you the best bang for the buck.

5. Put the tobacco products down

Finally, the easiest way to save yourself some cash is to put the tobacco products down. Under the ACA, insurers have only five means of adjusting your premium. These include your age, your location, what tier of plan you buy, whether it's an individual or family plan, and if you use tobacco products. Insurers have the right to charge up to a 50% surcharge on top of your premium if you use tobacco products, although certain states cap their surcharge limits a bit lower than 50%. Nonetheless, scientific data has clearly shown a link between tobacco use and costly, chronic diseases like heart disease and lung cancer. If you aren't using tobacco products, you won't be subject to what could be a hefty premium surcharge.

As you can see, putting in just a few minutes of work and making a simple life change could result in some hefty savings when enrolling in 2018.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.