Health care coverage and ObamaCare in particular have been in the news a lot lately. The Trump administration and Republicans in Congress made several attempts to “repeal and replace” ObamaCare in 2017. Now that the smoke has cleared (at least for the moment), many current and potential holders of health insurance policies issued pursuant to ObamaCare are wondering whether they will be able to renew health coverage for themselves and their families in 2018. And if so, what impact will all that turmoil in Washington have on their coverage?
The answer to the first question is “yes,” ObamaCare remains in place. As for changes, for the most part, especially in California which has a very robust and active health insurance marketplace called Covered California, insurance options, rights and benefits will be largely similar to those in previous years, but there will be some new factors to consider.
Here are the highlights:
(1) Enrollment Period. The Trump administration has cut the normal enrollment period from 90 to 45 days, specifically from November 1, 2017 to December 15, 2017. However, states have the option of extending this period, and Covered California has announced that it will maintain the previous enrollment period, which will therefore run from November 1, 2017 to January 31, 2018. But please note, as in past years, if you want your coverage to start on January 1, 2018, you must complete your enrollment by December 15, 2017.
(2) Notices to Existing Policy Holders. On October 5, 2017, Covered California announced that it will “shortly” be sending out notices to existing holders of policies purchased through Covered California. These notices will inform policyholders of how they can go about either extending their current policies into 2018 or shopping for different policies that may be more suitable to their current needs. Obviously if you are not a current policyholder through Covered California, you will not receive a notice and you will have to initiative the process of shopping for and purchasing your coverage.
(3) Insurers. There has been a lot of discussion in the news about how health insurers are “fleeing the market” due to various problems with ObamaCare (some genuine, some imagined), leaving consumers without marketplace options. But this is not true in California. Partly because California is such a big market and partly because state officials and Covered California have worked hard to maintain a vibrant marketplace, all eleven of the private insurers who participated in 2017 will continue to offer policies in California in 2018. Not all insurers operate in all of the sub-markets in California, so consumers in some areas will have more options than others, but Covered California estimates that 82 percent of potential California consumers will have three or more insurers to choose from.
(4) New Pricing. Premium costs will go up in 2018. They pretty much always do in the healthcare market. However, the 12.5 percent weighted average increase in premiums for 2018 is actually slightly less than the increase in 2017. Covered California has announced tentative premium pricing for 2018, but that pricing is still subject to regulatory review, which will probably be locked down very shortly (except for any CSR surcharges — see below). In fact, Covered California expects to have the “Shop and Compare” tool on its website available by October 11, 2017 - and pricing would have to be finalized for that tool to be useful. As in previous years, consumers are encouraged not to passively re-enroll in their existing policy, but to review alternative policy options which may work better for you in 2018. Covered California estimates that the average consumer could limit premium increases to only 3.3 percent by switching to the lowest priced policy in the same tier in which they are currently enrolled.
(5) Cost-savings Reduction Surcharges. The Affordable Care Act (which established ObamaCare) requires that the federal government pay to insurers certain supplement payments known as Cost-Saving Reduction (CSR) payments which the insurance companies must use to reduce out-of-pocket costs (deductibles and co-payments) for certain consumers. Although the Trump administration has threatened many times to withhold these payments, so far, on a month by month basis the administration has released the funds. But because neither the insurers nor Covered California can rely on the administration to continue to make these funds available, Covered California has announced that it will have to impose a surcharge (an addition to the expected premium) on certain policies if the Trump administration in fact cuts off CSR payments. The surcharge would affect only certain Silver tier policies. But because most policies issued in California are Silver tier, as many as 650,000 California enrollees may be affected by the surcharge.
(6) Individual Mandate. It is fair to say that the individual mandate -- that is, the obligation for every American to purchase health insurance unless he or she falls below a certain income level — was the primary irritant for those who wanted to repeal ObamaCare. However, because the repeal efforts failed, the mandate remains in place. That means that unless your income level is below a specified percentage of the poverty index, you are required to purchase health insurance for yourself and your family dependents, and that failure to do so will result in a penalty. The applicability of the penalty is determined with your tax filing. (Whether you complied with the mandate for calendar year 2018 would be determined in your tax return for that year - normally filed before April 15, 2019). There is some discussion that the Trump administration may instruct the IRS not to enforce or not to emphasize enforcement of the individual mandate, but no such instruction has been given and it would not be prudent to count on such action.
Enrollment for 2018 starts on November 1, 2017. To have insurance in place beginning January 1, 2018, you must have completed the enrollment process not later than December 15, 2017. Those are the two dates you should concentrate on: November 1 and December 15. During that period you should carefully review what health insurance you have in 2017 and whether that coverage is working for you and your family. Can you see the primary and specialist doctors you want to see? Go to the hospitals you want to use? Do you have or want dental and vision coverage? Are on-line health services particularly important to you? Can you get similar coverage and service at a better price from a different insurer or plan? And how do I evaluate the potential CSR surcharge if I purchase a Silver tier policy? You should examine the plans and policies available in your region in 2018 with these and other questions in mind. And, if you want some assistance in sorting through these questions or the specific terms of your policy options, please consider giving us a call. We are qualified in this field and our services are available without charge to you.