Q: Does the Affordable Care Act make it easier to get individual health insurance?
A: Yes, in several ways, it’s easier to get individual health insurance now that the bulk of the Affordable Care Act (ACA) has been fully implemented. But consumers in the individual market need to be aware that there’s now an open enrollment period each year, and coverage is only available outside that time frame if you have a qualifying event.
For 2017 coverage, the open enrollment period is November 1, 2016 through January 31, 2017. It will follow that same November – January schedule for 2018 coverage as well, but will shrink to a six-week window (November 1 to December 15) for future years.
Enhanced shopping platforms
Health insurance exchanges make it easier to shop for coverage. Exchanges have been frequently likened to Travelocity or other travel web sites: online marketplaces where individuals can easily find and compare health insurance options. Each state has an exchange, although 39 states will rely on HealthCare.gov for enrollment in 2017 plans. Exchanges allow people shopping for individual health insurance to get the information they need in one location and give them confidence that they are comparing “apples to apples.” All health plans offered on the exchange must cover the ACA’s essential health benefits, but individual and small group plans offered outside the exchanges must also include coverage for the same essential health benefits.
Subsidies are making health insurance affordable for millions of Americans, many of whom were unable to afford coverage at all prior to 2014. In many – but not all – cases, people who earn up to 400 percent of the federal poverty level receive subsidies to offset a portion of their premiums if they don’t have access to affordable employer-provided insurance. (For 2017 coverage, that’s $47,520 annually for an individual and $97,200 for a family of four.) As of February 2016, about 10.8 million people were receiving premium subsidies through the exchanges.
For people with incomes up to 250 percent of the poverty level, cost-sharing reductions are also available, as long as they select a Silver plan through the exchange. These cost-sharing subsidies make it easier for people to actually use their insurance, since their out-of-pocket costs are lower than they would be without the cost-sharing subsidies. As of June 2015, 5.6 million people were receiving cost-sharing subsidies on silver plans purchased through the exchanges. And uptake of cost-sharing subsidies was higher on Healthcare.gov in 2016 than it was in 2015.
The ACA also called for Medicaid expansion, providing coverage to people with household income up to 138 percent of the poverty level. Prior to 2014, in most states, childless adults couldn’t qualify for Medicaid regardless of how low their income was. And even adults with dependent children were often ineligible for Medicaid, despite having incomes well below the poverty level.
However, as of mid-2016, 19 states still had not agreed to expand Medicaid. (The ACA called for expansion nationwide, but in 2012, the Supreme Court ruled that states could opt out).
No more medical underwriting
Prior to 2014, health insurance companies in the individual market could refuse to sell you a policy, charge you more based on medical history, or refuse to cover a pre-existing condition. According to the Department of Health and Human Services, as many as 129 million Americans under age 65 have some type of pre-existing health condition, and up to 30 percent of healthy Americans are likely to develop a pre-existing condition over the next eight years. Starting in 2010, the ACA banned coverage limitations for children with pre-existing conditions, and that ban went into effect for adults starting in 2014. Today, everyone has access to health insurance, regardless of medical history.
Insurance companies are also no longer allowed to charge women more than men for equivalent coverage. Prior to 2014, women almost always paid more than men – despite the fact that most didn’t cover maternity care. All new individual plans now include maternity coverage, and pricing is the same regardless of gender.
Pricing can still vary based on age, but only by a ratio of 3 to 1. So a person who is 64 can only be charged three times a much as a person who is 21. Prior to 2014, there were no official limits, and it was common for the ratio to be closer to 5 to 1. So the ACA has made coverage more affordable for older Americans (although younger people now pay more than they would have without the new rules).
Higher premiums for people not eligible for subsidies
Although the ACA has certainly improved access to individual health insurance – or Medicaid – for much of the population that’s not eligible for employer-sponsored health insurance, that isn’t universally true. For people who were able to obtain medically underwritten health insurance prior to 2014 and who earn too much to qualify for subsidies now, coverage is generally far more expensive than it was prior to ACA implementation.
And for 2017, it appears that rates will increase sharply. For people who qualify for subsidies, these rate spikes will be largely mitigates by corresponding increases in subsidy amounts. But for people who don’t qualify for subsidies – either because they earn too much, or because of the family glitch – the entire brunt of the rate increases will show up on their monthly invoices. For very high income folks, this is likely still a workable situation. But for people with income just a little above the 400 percent of poverty threshold, the subsidy cliff can be a very real – and very daunting – problem.