President Joe Biden signed a package of health care-related executive orders on Thursday that, among other initiatives, will reopen HealthCare.gov for a special, three-month enrollment period starting on Feb. 15.
That means Americans without health insurance have a chance to check out their state's health insurance marketplace options offered through the Affordable Care Act, also known as Obamacare, outside the normal Nov. 1 through Dec. 15 period. This can offer many Americans, particularly those who have dealt with unemployment amid the Covid-19 pandemic, another chance to get insurance. About 28.9 million nonelderly Americans were uninsured in 2019, the latest data available.
Although losing job-based health insurance qualifies you for a special enrollment period (even if you quit or get fired), it's only available for about 60 days, and many people don't sign up in time. It's estimated that about 7.7 million workers lost their employer-sponsored health insurance due to the pandemic as of June 2020, according to the Commonwealth Fund. Including dependents, about 14.6 million people were affected.
The latest special enrollment period also presents a chance for those on a Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance plan to find a cheaper option. While employers cover about 82% of the plan costs for individuals and 71% for families, those on COBRA carry the total cost themselves, plus a 2% administrative fee.
Meanwhile, the national average premium for a silver level, or benchmark, marketplace plan in 2021 is $452 a month, according to the Kaiser Family Foundation. That does not include any subsidies that can be applied to lower the cost, which about 85% of Americans are eligible to receive.
Although a marketplace plan may be less expensive than COBRA, it still may not be cheap. Consumers should go in with realistic expectations. If you're making $20,000, you may be able to get pretty cheap insurance since the savings you may be eligible for are based on your income. But if you're single and making $40,000, it's going to cost more — at least a few hundred dollars, says Carolyn McClanahan, a Florida-based financial planner and physician.
Yet going without health insurance, even if you're generally healthy, can be a big gamble. "The problem is, if you don't have insurance, you might be able to piece together some care through free clinics. But generally, you're not going to get great care," McClanahan says.
For those interested in the special enrollment period starting in about two weeks, here's a rundown on where to start and what to consider before enrolling.
Start with HealthCare.gov resources
If you're not sure where to start, check out HealthCare.gov in the coming weeks. Biden's executive order directs federal agencies to re-examine any policies that could make it more difficult for people to enroll in Medicaid or the HealthCare.gov insurance plans.
"From what I saw... they're going to start ramping up all the resources for people," McClanahan says. It looks like the Biden administration is going to put a huge amount of funding toward hiring people to provide assistance and to educate the public, she adds.
In order to promote the special enrollment period and provide more information, the Centers for Medicare & Medicaid Services will participate in a paid advertising campaign, as well as "direct outreach" to consumers that will be available in English, Spanish and other languages, according to the U.S. Department of Health and Human Services.
Consumers will be able to apply for new coverage or update an existing application through HealthCare.gov, the Marketplace call center or direct enrollment channels such as state-based marketplaces.
Understand your income
Before signing up for any plan, it's crucial to understand what your annual income is — the exact amount, not a ballpark. How much you make directly impacts whether or not you're eligible for subsidies to reduce the cost of your insurance.
Too often, people don't know exactly how much they'll make in a year. But if they apply and qualify for a subsidy and then end up making more, they'll owe some of that subsidy back, McClanahan says.
There are two types of subsidies: a premium tax credit and cost-sharing subsidies. The tax credit is available to those who buy a marketplace plan and earn a household income between 100% and 400% of the poverty level. In most states, the federal poverty level was $12,760 for an individual last year, according to the Congressional Budget Office.
Those who qualify for the tax credit pay up to just under 10% of their income toward a silver plan. The federal government covers the rest, either on a monthly basis or as a lump sum tax credit. These credits can be applied to any level of plan: bronze, silver, gold and platinum.
But the way the tax credit is currently calculated, if you hit one dollar over 400% of the poverty level, you lose the entire credit, so it's important to know exactly where you stand before you enroll.
In addition to the tax credit, some consumers may also qualify for a cost-sharing subsidies. These are only available to those who make between 100% and 250% of the poverty level and sign up for a silver level plan. To help determine how much you may pay and what subsidies you may be eligible for, Kaiser has a helpful calculator.
"There are a large number of people who qualify for subsidies and don't know it and can get really cheap health insurance," McClanahan says. In 2018, 50% of the uninsured population qualified for Medicaid or subsidies and didn't know it or didn't sign up, according to research published last year. That was about 15 million people then and McClanahan says she believes that number is even greater today.
Check out Medicaid
Depending on your situation and where you live, you may qualify for Medicaid. This is a program that provides health coverage for low-income families and children, pregnant women, the elderly and people with disabilities.
In some states, Medicaid is available for all adults under a certain income threshold. To see if you qualify, HealthCare.gov has a calculator where you can plug in your home state, family size and income level.
"People who have zero income for the year are not going to qualify for subsidies because normally they would be put on Medicaid," McClanahan says.
In general, it's worth spending the time to really understand your health insurance options and sign up for a plan, McClanahan says. "Even if you have to pay a couple hundred bucks, it's a lot cheaper than having an emergency and not really having any resources to get the care," she says.