Open enrollment, the period where you can sign up for health insurance for the coming year under your employer's plans or the Affordable Care Act, typically runs from Nov. 1 to Dec. 15 in most states. In a normal year, if you don't enroll during that window, you cannot get coverage for the coming year unless you qualify for a special enrollment period, which is allowed after certain life events, including losing health coverage, moving, getting married, having a baby or adopting a child.
But 2020 has been anything but normal. Because of the COVID-19 pandemic, some states have kept enrollment open all year. Others are extending open enrollment into next year. As with almost everything else in 2020, confusion is commonplace. Many people do not understand open enrollment, and the so-far failed attempts to repeal the ACA and other misinformation about health insurance generally has left others wondering what's real and what's "fake news."
To help clear up some of that confusion, here are some new and noteworthy changes to keep in mind as you sign up for health insurance.
The Affordable Care Act is still the law of the land. Despite Republican efforts to get rid of it, the ACA still exists to provide everyone with, as the name implies, affordable health care. And as the COVID-19 pandemic has proved, health insurance has never been more important. "If there is any way you can sign up for coverage, please do it," says Karen Pollitz, a senior fellow of health reform and private insurance for the Kaiser Family Foundation.
Varying enrollment periods. Some states have longer open enrollment periods. California, for example, has legislated a permanent extended open enrollment period. The last day for Californians to apply for coverage with an effective date of Jan. 1, 2021, is Dec. 15, 2020, but coverage purchased after this date will be effective no later than Feb. 1, 2021. Check with your state insurance department for the dates, or consult a list of open enrollment dates for all states.
Still no federal tax penalty. There is still no federal tax penalty for going uninsured. The Tax Cuts and Jobs Act of 2017 removed the individual mandate requirement that everyone sign up for health insurance. However, a handful of states, including California, Rhode Island, Massachusetts, New Jersey and others, have individual mandates, Pollitz says, and other states are also looking into it.
Premiums are decreasing. Health insurance premiums for Affordable Care Act exchange plans will decrease in 2021 for the third year in a row, and most shoppers will have more plan choices, according to the Centers for Medicare and Medicaid Services. The average premium on HealthCare.gov for both single and family plans will decline by about 2% compared with plans sold in 2020. The reason: The past two years have seen a more stable marketplace, says Nathan Teater, manager of IFP sales, customer care and enrollment for eHealth. "Also more and bigger insurance companies are coming back into the market, so prices are not jumping so drastically," he says.
Subsidies help almost everyone pay less. Subsidies still help upwards of 90% of all ACA plan holders afford their coverage. In all states, the upper limit for subsidy eligibility is 400% of the federal poverty level, which in 2021 equates to $51,040 for a single person and $104,800 for a family of four. Subsides can bring the cost down, in some cases, to less than $100 a month per person. "Over 90% of our membership receive subsidies," says Linda Greenfeld, chief product officer of L.A. Care Health Plan, which serves a lower-income population in Los Angeles County.
Without subsidies, premiums are expensive. Those who don't qualify for subsidies to help lower the cost of premiums may still face daunting premiums. In 2021, the average premium for the benchmark health insurance plan on HealthCare.gov for a 27-year-old will be $369 per month, and a family of four will pay $1,486 a month, according to CMS.
Short-term plans are still available -- but buyer beware. Beginning in 2019, the federal government allowed states to sell short-term health insurance policies with coverage terms of up to one year. According to eHealth, short-term health insurance is approximately 80% cheaper on average than an ACA plan purchased with no subsidies. But there is a significant catch: With lower costs come fewer benefits. Short-term policies do not need to include such benefits as maternity, mental health, prescription drugs and preventive services, which are mandated as essential health services by the ACA. Also, short-term insurers can deny coverage based on preexisting medical conditions, which ACA plans cannot do. "If you are healthy enough to qualify, the premium may be cheaper, but if you get sick, you run the risk of paying a lot out of pocket," Pollitz says. "If you buy one and something happens, you might be caught without coverage or it won't stay affordable the rest of year, and losing coverage with a short-term policy does not give you the right to enroll in a full policy later in the year. These are risky, so be careful."
It's harder to find help. The Trump administration substantially cut funding for navigators to help shoppers find health insurance. There are no navigators at all in South Carolina and Utah, Pollitz says, and in "big chunks of other big states -- Illinois, Texas, Michigan, Ohio -- there may be programs in some parts of the state, but in most counties there's nothing." If there is a navigator, there may be a long wait. "All the more reason to start early and not to wait until the last minute," she says. Other options for help include sister programs run by community health centers, hospitals and other nonprofit organizations. You can find these programs by going to HealthCare.gov and clicking on the Find Local Help button.