Health Insurance Medicare Enrollment Guide 2023
By Michael Giusti
From metal tiers to tax subsidies, open enrolment is the time for policyholders to tackle the questions about their healthcare coverage in the coming year.
Most health insurance plans gear up for enrollment in the fall, including individual Marketplace Plans purchased through the Affordable Care Act, Medicare, and many (though not all) employer-sponsored plans.
And while some plans will allow policyholders to roll over their existing coverage from the previous year, most experts agree that it is best for everyone to give their coverages a fresh look each year to ensure they and their family are getting the best healthcare at the best price.
Affordable Care Act 101
Passed into law in 2010, the Affordable Care Act is the federal law that dictates what must be covered by compliant policies. The law also allows for individual policies to be sold through the federal and state marketplaces, and it offers tax credits to help individual policyholders pay their premium.
Prior to the Affordable Care Act, private health insurance was almost exclusively available through an employer. Following the passage of the law, now employees can leave their jobs without worrying about losing access to health care.
For people who do use an employer-sponsored plan, the Affordable Care Act set standards for what must be covered, and it made many services available to policyholders without cost, including preventative care and screenings, vaccines, and an annual checkup.
The Affordable Care Act also defined the reasons why premiums can, and cannot, increase. Following its passage, it became illegal to charge higher premiums for people with preexisting conditions or based on their race or gender. It did continue to allow higher premiums based on age and if a policyholder is a smoker.
With the new COVID-19 booster shot, there have been some early reports of confusion, with some providers charging patients copays and deductibles after getting the shot, which according to the law, should be free.
Some of those mistakes have been chalked up to clerical issues with how the booster was coded, while others were being told it was not listed as a covered medication.
The Department of Health and Human Services issued a letter reminding insurers of their legal obligation to cover the new vaccine.
How to Enroll
Open Enrollment for Affordable Care Act plans runs from Nov. 1, 2023, until Jan. 15, 2024.
Affordable Care Act policies are available to everyone. However, if someone has access to an employer subsidized policy, they won’t get a premium tax credit to help pay for it, likely making the employer plan the more affordable option.
For people shopping for an Affordable Care Act policy, they either need to start with their state’s marketplace or the federal marketplace HealthCare.gov. Affordable Care Act plans are managed by private insurance companies according to the federal guidelines.
Shoppers can use an agent/broker or an assister to get help shopping for a plan.
Agents are paid by insurance companies when the policyholder buys a plan. These agents are often required by their state to act in the consumer’s best interest and can refer the policyholder to Medicaid or CHIP plans if the policyholder meets the income requirements.
Like agents, assisters help you chose a plan or apply for a Marketplace plan, Medicaid, or CHIP, and are also free to the consumer.
Premium tax credits are only available through Marketplace plans.
Information Needed to Enroll
To enroll in a Marketplace plan, policyholders need to gather some basic documents for everyone who would be covered by the plan. That includes the date of birth, social security number, address, and gender of each person applying.
The prior year’s taxes are needed for everyone who filed in the previous year, even if a dependent files their own return.
If anyone applying for a policy is a lawfully present immigrant, they need their immigration documents as well.
It is also helpful to have all the policy information for everyone’s current health coverage, even if they were covered under Medicaid, CHIP, Tricare, VA Health, or any other health plan.
Marketplace plans will take effect Jan. 1 (or Feb. 1 if the policyholder waits until after Dec. 15 to apply.)
While everyone is technically required to have health insurance under the Affordable Care Act, the penalty for not enrolling was eliminated in 2018.
Special Enrollment Period
If someone misses open enrollment, they generally have to wait until the next open enrollment period to sign up. There are some exceptions, though.
With both Affordable Care Act marketplace plans and employer sponsored plans, some life events are considered Qualifying Life Events that allow policyholders to join a plan, even if it isn’t open enrollment. These include the birth of a child, the loss of a job, a marriage or divorce, or moving to another ZIP code, among a handful of other reasons.
If someone signs up during a special enrollment period, their policy will take effect on the first of the month after they buy the policy.
Pricing
Experts are predicting a 6% average hike – with most policy increases falling between 2% and 10%. Price increases vary greatly nationwide, with each state marketplace pricing policies differently.
These price increases have been driven by a few factors, including increased costs for medical care and prescription drugs (such as the new generation of weight loss and diabetes drugs.)
Additionally, many health care worker wages increased as a result of labor shortages during and immediately after the COVID-19 pandemic. And costs for medical devices and other related supplies have also gone up as a result of inflation.
Most analysts are pointing to future health care price increases moving back to their pre-pandemic upward trajectory.
But pricing news isn’t all bad.
Policy subsidies for Marketplace plans were increased during the COVID-19 pandemic but were set to expire this year. The Inflation Reduction Act extended those increased premium subsidies, which are now expected to continue through 2025.
Differentiating Plans
Marketplace plans, and most employer-sponsored plans, are broken into so-called “metal categories”: bronze, silver, gold, and platinum.
The care that policyholders get on each plan is the same. The difference comes in how the policyholder and the plan split the costs for care.
Bronze plans tend to have the lowest premiums, but then reimburse less for care. Platinum plans have the highest premiums, but the lowest cost sharing for the policyholder.
Silver plans sit in the middle and aim for a balance between premiums and out of pocket costs at the point of care.
The general rule is that the higher premium plans are designed for patients who will have more expected care — such as someone with a chronic illness, where the lower premium plans are designed for someone who rarely needs care but wants to have a plan just in case something goes wrong.
For healthy people under 30, catastrophic plans are an option. These have the lowest monthly premiums, but they don’t come with the premium tax credits (meaning that if someone qualifies for a subsidy, catastrophic plans typically aren’t the best option.)
With catastrophic plans, the deductibles and point of care costs are much higher than other plans. While they do cover essential health care and preventative care, they are really designed for people who don’t use the health care system much.
The key things to evaluate when someone starts shopping for a policy include premiums, co-pays, deductibles, and out of pocket maximums.
It is also important to check the policy’s coverage network to ensure a favorite doctor or clinic isn’t excluded or considered out of network.
Employer Sponsored Plans
Private companies don’t have to follow the Affordable Care Act’s open enrollment period, but many do. A good rule of thumb is that when pumpkin spice products and Halloween decorations come out, it is probably time to start thinking about renewing your health care policy for the year.
That said, if the company’s fiscal year ends in the spring, it is entirely possible that open enrollment is also going to correspond with the spring. The best thing to do is to ask human resources.
Where a marketplace plan comes with potential tax credits to subsidize their premiums, private employers typically cover a large portion of their workers’ policy costs as a benefit for employment.
Because of this private subsidy, people who are eligible for an employer plan are typically not eligible for a Marketplace plan subsidy. The exception is when the employer subsidy is not enough to bring the premium costs down to a level where the federal formula considers it affordable.
Oftentimes employers only subsidize the employee’s portion of the policy but not the family portion. That means that while the employee would have affordable coverage, the spouse and children may be paying full market rate for their policies.
In the past, those families were still ineligible for Marketplace plan subsidies — leading to what many called the “family loophole.” But for the past two years, that loophole was closed, meaning that if the employer only subsidized the worker’s policy, the rest of the family would be eligible for a separate marketplace plan with a subsidy.
Another thing to consider if both spouses are employed fulltime is whether to go with two separate plans. Each employer is likely to heavily subsidize their employee, so an employee and their spouse having different, subsidized plans often makes sense.
Plans also look at children and families differently. Some plans allow for a spouse-and-child policy, which could be more affordable than a spouse-and-family plan.
The price for one child is often lower. However, once a second child is added, the price typically jumps up to the higher “family” rate, which is the same no matter how many children are insured. In those scenarios it might make sense for each spouse to add one child. On the other hand, with some scenarios it makes most sense to put all the children on the lowest cost plan.
The bottom line is to play with all the different scenarios to see which is most beneficial.
The final thing to watch is the so-called spousal surcharge. Many plans add a monthly surcharge to the premium if a spouse has a subsidized plan available through their employer but foregoes it in favor of being on their spouse’s family plan.
Often that surcharge surpasses the savings of putting everyone on one plan may have offered. Other times the subsidy is still a better deal, even after paying the surcharge.
Much like a Marketplace plan, employer-sponsored plans tend to come in the metal tiers – bronze, silver, gold, and platinum.
These tiers work the same way, with the same level of care for each tier, but with a different cost share.
With a private employer, a high deductible health care plan might also be an option. These function a lot like the catastrophic plans, but often come with health savings accounts that the policyholder can use to save for health expenses tax free.
Employers often contribute to those accounts as part of their health care subsidy.
Medicare, Medicaid and CHIP
Medicare follows a slightly different schedule than both Marketplace plans and employer plans. For Medicare, the Annual Enrollment Period runs from Oct. 15 to Dec. 7.
During the Annual Enrollment Period, people can sign up for new Medicare policies, and they can switch between existing classic Medicare Part A or B into Medicare Advantage — Part C. They can also switch back the other way.
Medicare Advantage plans are administered by private insurers but paid by Medicare.
Neither Medicaid nor the Children’s Health Insurance Program have open enrollment periods. Instead they have rolling enrollment, meaning anyone can sign up at any time, presuming they meet the programs’ income limits in their state.
As a public health measure during the pandemic, federal law mandated nobody should be disenrolled from Medicaid.
Since the end of the pandemic, not only has that prohibition ended, but most states have gone through a process of actively updating their Medicaid rolls. In many states, everyone who was enrolled in a Medicaid plan had to update their information to keep their plans.
Critics say those requirements were not adequately communicated in most states, and subsequently, millions of people were dropped from Medicaid unnecessarily, simply because they didn’t know they had to update the state system.
According to KFF, at least 7.4 million people have been disenrolled from Medicaid this year.
In many cases, that meant policyholders only learned they were dropped when they were at their health care provider’s office or refilling a prescription, only to find out their policy had ended weeks or months ago. If their income was too high to re-enroll in Medicaid, many then went to shop for a Marketplace plan where they learned that they had waited too long and were outside the Qualifying Event window.
Those policyholders should now begin the process of applying for a Marketplace Plan through the open enrollment process.
Looking Ahead
With the presidential elections on the horizon, it naturally raises questions about how it will potentially affect healthcare. For its part, the Affordable Care Act seems pretty secure as a law. But that doesn’t mean every state has adopted the Medicaid expansion that the law allows.
Florida, for example is one of the states that didn’t grant that expansion. State elections could affect whether the few remaining states to not expand Medicaid may end up doing so.
Regardless of what happens in the future, families would do well to prepare to evaluate the coverage options available to them very soon.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com
