‘It’s fall again, shorter days, cooler temperatures, and open enrollment for health insurance in the marketplaces established by the Affordable Care Act (ACA).
Buying now means having coverage effective January 1, 2023. While most plans stay the same year after year, there are some changes consumers should be aware of, especially if they’re having trouble buying expensive policies through their employer.
Last year, the Biden administration and Congress took action, mainly related to premiums and subsidies, that will affect coverage in 2023. Meanwhile, confusion caused by court decisions may raise questions about coverage for preventive care or abortion services.
Open enrollment for people who buy health insurance through the marketplaces begins on November 1 and, in most states, lasts until January 15. For coverage to begin on the first day of 2023, enrollment generally must be completed by December 15.
Many people who get coverage through their jobs must also select a plan at this time of year. And your decisions could be affected by the new ACA rules.
So what’s new, and what should you know if you’re shopping around? Here are five things to keep in mind.
1. Some families who didn’t qualify for ACA subsidies now do.
One big change is that some families who were unable to access these federal subsidies to help them purchase ACA coverage may now be eligible.
A recently finalized rule by the Treasury Department was designed to address what has long been called “the family fault.” The change expands the number of families with job-based insurance who can choose to waive that coverage and instead qualify for subsidies to get an ACA plan.
The White House estimates that this adjustment could help about 1 million people get more affordable coverage or insurance.
Previously, employees could qualify for a subsidy for Marketplace insurance only if the cost of their employer coverage was deemed unaffordable based on a threshold set each year by the IRS.
But that determination took into account only how much a worker would pay for insurance for himself. The cost of adding family members to the plan was not part of the calculation, and family coverage is often much more expensive than employee-only coverage.
Families of employees who fall into the “fault” either don’t have insurance or pay more through their jobs for coverage than they would if they could get an ACA subsidy.
Now, the rules say that eligibility for subsidies must also consider the cost of family coverage.
“For the first time, many families will have a real choice between an employer-sponsored coverage offer and a subsidized Marketplace plan,” said Sabrina Corlette, a researcher and co-director of Georgetown University’s Center for Health Insurance Reform.
Now, workers will be able to get subsidies from the market if their share of the premium for their job-based coverage exceeds 9.12% of the income they expect to have in 2023.
Now, two calculations will occur: the cost of employee-only coverage as a percentage of the worker’s income, and the cost of adding family members. In some cases, the worker may decide to stay on the employer’s plan because their payment for coverage falls below the affordability threshold, but family members will be able to get an ACA-subsidized plan.
Previous legislative efforts to resolve “family glitch” have failed, and the Biden administration’s use of regulation to address it is controversial. The move could eventually be challenged in court. Still, the rules are in place for 2023, and experts, including Corlette, said families who could benefit should go ahead and sign up.
“It’s going to take a while to figure all that out,” he said, adding that there’s unlikely to be a decision in time that affects policies by 2023.
An Urban Institute analysis published last year estimated that the net savings per family could be about $400 per person, and that the cost to the federal government of the new subsidies would be $2.6 billion a year.
Not all families would save money by making the switch, so experts say people should weigh the potential benefits and costs.
2. Preventive care will continue to be covered without a copay, but abortion coverage will vary
Many people with insurance are happy when they get a cancer screening or seek other preventive care and realize they don’t have to pay out-of-pocket. That comes from an ACA provision that prohibits cost-sharing for a variety of preventive services, including certain tests, vaccines and medications.
But a September ruling by US District Judge Reed O’Connor in Texas led to confusion about what might be covered next year. The judge ruled unconstitutional one of the methods the government uses to determine some of the preventive treatments that are covered without patient cost sharing.
Ultimately, that could mean that patients will have to start paying part of the cost of cancer screening tests or drugs that prevent HIV transmission.
The judge has yet to rule on how many people the case will affect. But, for now, the ruling applies only to the businessmen and individuals who filed the lawsuit. Then do not worry. Your free mammogram or colonoscopy is still free. The ruling is likely to be appealed, and a decision is not expected before the start of the 2023 coverage year.
The other judicial decision that has raised doubts is the Supreme Court ruling that annulled the constitutional right to abortion. Even before that decision was announced in June, coverage of abortion services in insurance plans varied by plan and by state.
Now it’s even more complicated as more states are banning or restricting abortion.
Twenty-six states restrict abortion coverage in ACA Marketplace plans, while seven require it as a benefit in both Marketplace plans and employer-purchased plans, according to KFF. Those states are California, Illinois, Maine, Maryland, New York, Oregon, and Washington.
Employees and policyholders can refer to the medical plan documents for information on covered benefits, including abortion services.
3. Premiums are rising, but that may not affect most people with ACA plans
Health insurers are raising premiums for both ACA plans and employer coverage. But most people who get subsidies in the market won’t feel it.
That’s because the subsidies are tied to the cost of the second cheapest Silver plan offered in a marketplace. (Marketplace plans are offered in metal “tiers,” based on how much they potentially cost policyholders out-of-pocket.)
As the costs of those basic Silver plans increase, the subsidies also increase, offsetting all or most of the premium increases. Still, shop around, experts advise. Changing plans can be profitable.
As for subsidies, the passage this summer of the Inflation Reduction Act ensured that the enhanced subsidies many Americans have received under legislation tied to the Covid-19 pandemic remain in place.
People who earn up to 150% of the federal poverty level ($20,385 for an individual and $27,465 for a couple) can get an ACA plan with no monthly premium. Consumers who earn up to 400% of the federal poverty level ($54,360 for an individual and $73,240 for a couple) get sliding scale subsidies to help offset premium costs.
People with incomes greater than 400% should not spend more than 8.5% of their family income on premiums.
For those with insurance through work, employers generally set the amount workers must pay for their coverage. Some can “afford” the rising costs by increasing amounts taken from paychecks for premiums, setting higher deductibles, or changing health care benefits. But anyone whose share of their employer insurance premium they expect to be more than 9.12% of their income can see if they qualify for a subsidized ACA plan.
