President Barack Obama is leaving the White House in a few months, but the troubles of his signature health care law continue to make headlines. With premiums rising by double digits and many consumers scrambling to replace coverage because their insurer bailed out, the 2017 sign-up season that starts Nov. 1 looks challenging.
Obama says it’s just “growing pains” but critics see the threat of market collapse, a death spiral. Here are some questions and answers for consumers ahead of the law’s fourth open enrollment season:
I BUY MY INSURANCE DIRECTLY. SO WHY ARE MY PREMIUMS GOING UP SO MUCH IF I DON’T USE HEALTHCARE.GOV?
The 2010 health care law aimed to create a single market in each state for health insurance purchased by individuals. That’s increasingly true as older plans that predate the law fade away.
So consumers who bypass the public insurance exchanges and buy individual policies from an insurer are not insulated from premium increases. And they lack the income-based subsidies available to customers inside the government marketplaces.
The administration estimates that 6.9 million people currently buy coverage outside the marketplaces, and of those, nearly two-thirds would not be eligible for subsidies if they looked within the exchanges.
Another group, roughly 1.5 million people, buy policies through the exchanges but make too much to qualify for subsidies.
The people in these two groups will bear the brunt of premium increases.
Minnesota dairy farmers Dave and Ann Buck say their monthly premium of $1,650 for a family plan could jump to more than $3,000 next year.
“Our rates have gone up since the implementation of the Affordable Care Act, and they just keep going up to the point where it is unaffordable,” said Ann Buck.
WHAT DOES THE OBAMA ADMINISTRATION SAY ABOUT RISING PREMIUMS?
Officials finally acknowledged the price jump this week, revealing that premiums for a midlevel benchmark plan are going up an average of 25 percent across the 39 HealthCare.gov states. (It’s slightly less — 22 percent — when remaining states running their own marketplaces are factored in.)
The administration calls it a temporary market “correction” because insurers had set their premiums too low in previous years. Officials estimate that 72 percent of HealthCare.gov customers will still be able to find a plan for less than $75 a month after taking into account subsidies.
Caveat: Those large subsidies tend to go to lower-income consumers, not those in the solid middle class. And switching to reduce your premiums may mean having to accept higher out-of-pocket costs, or a different network of doctors, or a new list of preferred medications.
ARE PREMIUMS GOING UP BECAUSE SOME INSURERS ARE LEAVING THE MARKET?
While there’s strong evidence that competition among insurers helps to keep premiums in check, it’s not clear that insurers bailing out is the main reason driving double-digit increases.
Insurers say their new customers turned out to be sicker than expected, and not enough younger, healthier people have signed up to help defray costs. Also, the law’s internal system to help balance out gains and losses among insurers has not worked well.
About 1 in 5 HealthCare.gov customers will only have a single carrier in their communities next year. UnitedHealthcare, Aetna and Humana have scaled back. More than a dozen nonprofit insurance co-ops have shut down because of financial problems.
I’M A RETURNING CUSTOMER TO THE HEALTH INSURANCE MARKETPLACE. WHAT SHOULD I LOOK FOR THIS TIME?
It probably makes more sense than ever to shop around.
If your insurer left the market, HealthCare.gov will try to automatically match you up with a similar plan from another carrier. You don’t have to accept that match, but it could be a starting point for shopping.
Administration officials say a smoother website should make it easier to compare plans on features that consumers care about, such as which doctors participate. HealthCare.gov has been improved for mobile devices.
Depending on availability, consumers will have a new option of picking “Simple Choice” plans, clearly flagged on the website. These plans make it easier to compare premiums and provider networks.
Tip: Make sure to check your income information and update if needed.
I’M A NEW CUSTOMER. WHAT SHOULD I BE AWARE OF?
Instead of focusing on insurer brands, you might want to get familiar with the tiers of coverage on the marketplace: bronze, silver, gold and platinum.
Silver plans definitely deserve a close look because they’re the only ones that come with extra financial help for out-of-pocket costs like deductibles and copayments. The so-called “cost sharing reductions” are keyed to a consumer’s income and are available for people making up to 250 percent of the federal poverty level, which is about $50,400 for a family of three.
For many families help with cost sharing makes the coverage affordable.
Tip: If you’re unfamiliar with health insurance jargon, seek out an enrollment counselor in your community. Also, make sure to correctly enter your family information, citizenship, immigration status and income. Missing details or mistakes can create big problems later.
I PAID A FINE FOR BEING UNINSURED. IS IT WORTH MY TIME TO LOOK FOR COVERAGE?
It can’t hurt to run the numbers, because the basic fine now starts at $695 and it will creep up each year.
Don’t be shocked if you get a letter from the IRS reminding you about open enrollment season. The nudge from the taxman is part of the administration’s outreach effort this year.
WHAT ARE THE KEY DATES TO REMEMBER?
Dec. 15 is the last day you can sign up or make a change in time to take effect Jan. 1. That has been traditionally been HealthCare.gov’s busiest day. And open enrollment ends Jan. 31, after Inauguration Day for the next president.