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State of Insurance: The 2021 Health Insurance Guide

2021 health insurance guide

What’s in Store for Health Insurance in 2021?

The pandemic has shined a brighter light on health care than ever before, and health insurance is poised to face several inflection points this year.

Whether it’s care for people who have contracted COVID-19, the realities of an entire population locked down for a year, or the gyrations coming out of Washington, many changes may be in store for health care and health insurance.

This report aims to detail some of those changes, as well as tap into the general state of health insurance so consumers are sure to put the right foot forward.

2021 Affordable Care Act Outlook

One major change in the health insurance world that will play out in the immediate few weeks is the extended open enrollment period for the Affordable Care Act, a.k.a. Obamacare.

While people can join other federal health care programs, such as Medicaid or the Children’s Health Insurance Program at any time throughout the year, people purchasing a policy through an ACA health insurance marketplace must typically wait until they have a change-in-life event, or for the annual open enrollment period at the end of the calendar year.

But this year, President Joe Biden has signed an executive order expanding that window through a Special Enrollment Period that will end May 15. Anyone who is otherwise uninsured can sign up, regardless of whether they have had a qualifying life event. This is big news for uninsured people who don’t have access to health insurance through their employer.

The first batch of data from that special enrollment period looks promising. According to the Centers for Medicare and Medicaid Services during the two-week period between Feb. 15 and Feb. 28, 206,000 people signed up for policies under the plan.

Covering the Basics on ACA Plans in 2021

How much a plan costs depends on what level of coverage you are buying. ACA plans are rated by “metal” categories – bronze, silver, gold, and platinum. Those metals have to do with your cost share, not with coverage or quality of care. A patient with a bronze plan gets exactly the same care as someone with a platinum plan — they just pay a different percentage of the cost.

Regardless of which tier you buy you pay both monthly premiums and costs for care in the form of copays and deductibles. In addition to the metal tiers, ACA-compliant plans are broken into an alphabet soup of different types — HMO, PPO, POS, EPO.

Each of those are essentially describing which doctors and care providers will be covered, with exclusive provider organizations being the most restrictive, and preferred provider organizations typically being the least restrictive and health maintenance organizations and point of sale policies falling somewhere in between.

Some younger people also qualify for so-called catastrophic plans, which are not designed to pay for routine care because they have extremely high deductibles. Instead, these plans are designed to be there in case of a serious medical emergency or illness. Marketplace plans often come with subsidies, which based on your income, could reduce your premium to as little as $0 per month.

Part of the most recent coronavirus relief plan is an increase in that subsidy. Those expanded subsidies are designed to make ACA policies more affordable for lower income policyholders. Notably, people who have collected unemployment payments in the previous year will likely qualify for a $0 monthly premium plan.

The bill also offers incentives for states to expand Medicaid. It also increases subsidies for COBRA health coverage, which you can purchase if you were laid off and lost your employer health plan.

The Impact of Texas v. California on Health Insurance

It is not uncommon for some people to mistakenly think that the Affordable Care Act was struck down. That is largely because of two related things that were initiated during President Donald Trump’s administration.

First, the so-called individual mandate, which imposed a penalty on anyone who didn’t have qualifying health insurance, was set to $0 by Congress. That meant that while it was still the law of the land that everyone was required to have health insurance, the penalty for not having coverage was gutted.

But with the individual mandate eliminated, that led the attorneys general from Texas and 17 other states to sue, arguing that without the mandate, the Affordable Care Act was unconstitutional. A federal judge in Texas agreed and tossed out the entire law. But that order was put on hold while the government appealed. In November, the U.S. Supreme Court heard arguments in Texas v. California, the lawsuit filed by those states.

If the Supreme Court does allow the law to remain struck down, more than 23 million Americans would be at risk of losing health insurance. It would also mean that protections for more than 135 million Americans with pre-existing conditions would be at risk of their insurance company dropping them when their policies renew.

After taking office, the Biden administration told the Supreme Court that it should uphold the entire law and allow the Affordable Care Act to stand, a shift from the position taken by the Trump administration. In the meantime, every health insurance policy that has been written for 2021 would remain in force regardless of what the Supreme Court decides.

If they do allow the law to fall, though, those policies would not likely be renewed in 2022. Allowing the law to fall would also put at risk federal premium subsidies that most low to middle income people who buy policies on the state marketplaces rely on to pay their monthly bill.

A decision from the Supreme Court is expected by summer.

2021 and the COVID Effect

Aside from the Affordable Care Act, COVID-19 has also mucked up the insurance marketplace as a whole – including private employer-provided plans.

First, the pandemic made setting premiums especially challenging. That is because premiums are set based on the previous year’s claims data, and since 2020 was marked by a combination of huge intensive care costs, but almost no preventative care costs, the model was flipped on its head. As a result, median health premium edged up just a percent or two in 2021.

But many in the insurance industry are holding their collective breath as things get back to normal. A major worry is that deferred care will come crashing through the system by this summer, representing a flood of claims once people are willing to see a doctor again.

The other question mark is what the long-term effect will be of having so many people defer care. Will a year of deferred cancer screenings, diabetes screenings, hip replacements, and so on, lead to worse long-term health, and ultimately higher health costs? And how long into the future will those increased costs haunt the industry?

One certainty, though, is that health plans that are compliant with the Affordable Care Act will ensure patients get vaccines at no cost. The vaccines themselves were paid for under Operation Warp Speed, and the cost to administer them would fall under the preventative care portion of required coverage.

Anyone with a federal health insurance plan — VA, Medicare, Medicaid, CHIP — will also get vaccines at no cost to the patient. Uninsured patients will be eligible for no-cost vaccines as well, at least as long as the pandemic is a declared emergency through a program called the Federal Provider Relief Fund.

There is an odd class of policies that do present a bit of a question mark — grandfathered plans and plans that aren’t regulated by the Affordable Care Act, such as short-term health plans. For the purposes of the COVID-19 vaccine, people with those noncompliant plans who may not be covered may be treated as uninsured for the purposes of the Federal Provider Relief Fund, so even they should be eligible for no-cost shots.

Employer Health Insurance Plans in 2021

Most group health care plans offered by employers comply with the regulations laid out in the Affordable Care Act, which means that if someone is shopping for a plan, the same “metal tier” rules apply.

One tricky situation that differs from marketplace plans comes in if a married couple both work and both spouses have employer-sponsored plans to choose from. In those cases, working through the coverage step-by-step makes the most sense. First, check to see how the employer subsidy works. In most cases the employer subsidizes the employee’s portion of coverage, but the spouse and in some cases the children would have to pay full price for their coverage.

If this is true for both spouses, then it probably makes sense for both spouses to use their own employer’s plans, excluding the other spouse. Then they should look at how children are treated and figure which one is most beneficial. In some cases, one employer’s policy is so generous and the other employer’s policy is so expensive that it does make sense for the entire family to join the more generous plan.

But if that does happen, watch out, because some employers impose a surcharge if an employee’s spouse passes on their company’s plan. But even with that surcharge, sometimes it makes sense to pick the more generous plan.

Healthcare in 2021: Telemedicine Set to Continue

One of the hallmarks of the pandemic is the number of things that moved into the online space. Doctor’s visits are no exception. So called telehealth or telemedicine appointments have boomed.

The benefits of telemedicine are obvious – they limit contact – and thus the possible exposure to the coronavirus. They cut down on travel – which helps overcome inclement weather, securing time off and child care. They can tend to shorten wait times, too.
Telemedicine is especially useful for general health checkups, prescription check in, dermatology appointments, nutrition counseling, mental health counseling, and even some urgent care situations.

In all cases, telemedicine allows patients to talk to doctors and caregivers live. The regulations governing how telemedicine is covered by insurance vary by state. Every state requires health insurance reimbursement for live video, but not all allow for remote monitoring alone. Some states say audio-only appointments are OK, but in some states, having a video call is required so health insurance covers the visit.

Although the Affordable Care Act was vague regarding telemedicine, most big carriers do offer some form of coverage for telehealth. As far as federally provided health plans, the Centers for Medicare & Medicaid Services has recently loosened it regulations for telemedicine. Telehealth services may now be delivered to Medicare beneficiaries by phone as long as video capability is available.

It is especially important for anyone who might be interested to check their specific policy and state rules for details.

Key Health Insurance in 2021 Take Aways

  • Although we appear to be making progress beating the pandemic, it may still have a few surprises in store — especially for the health insurance industry.
  • Industry watchers are eager to see what the Supreme Court will ultimately decide about the Affordable Care Act.
  • As the Biden administration continues to invest in the Special Enrollment Period and some states contemplate further Medicaid expansion, many otherwise uninsured people will likely gain much-needed care.
  • As we come out of the pandemic, some innovations, such as telemedicine are almost surely going to retain their foothold long-term.
  • The biggest question is how a year of deferred care will ultimately take its toll on health insurance premiums for years to come.

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