No one, not Congress, the president or even your insurance agent knows definitively what will happen to health insurance. However, this much we know, the Affordable Care Act was not repealed for 2018. After several attempts, it is still the law, although it has changed significantly.
What happens next? How will open enrollment affect Texans and Lubbock residents? What does a death spiral of the health insurance marketplace look like? These are all questions we hope to answer in a moment of severe uncertainty in America.
Are There Insurance Carriers for Obamacare in 2018?
We now know who will remain in the ACA Marketplace for 2018. The marketplace or healthcare.gov is the online exchange that includes details on government subsidized plans for a specific zip code provided by insurance carriers.
When healthcare.gov launched for open enrollment in 2014, there were two insurance carriers to choose from in Lubbock County. In 2015 and 2016, there were 3 carriers, while in 2017 we went back down to just two.
Blue Cross Blue Shield of Texas and First Care Health Plans are the only carriers on ACA left in Lubbock. Just 2 counties over from Lubbock, Bailey and Cochran rely on one carrier, Blue Cross Blue Shield of Texas.
Penalty, What Penalty?
Until the ACA is repealed, it is still the law and mandates most Americans have health insurance throughout a prior year. The consequences of not having minimum essential coverage are a tax penalty, handled by the IRS when federal tax returns are filed.
The Trump Administration, through an executive order in February of 2017, effectively told the IRS to turn a blind eye to penalties. While you would be breaking the law by not having health insurance, it is no longer a question that needs a yes or no answer on tax returns. As a result, it will be very unlikely that penalties will apply to individuals without health coverage in 2017 or 2018.
How much are we talking about? The penalty for 2017 and 2018 was 2.5% of household income or $695 per adult and $347.50 per child), whichever is higher.
According to insurance carriers, the effect of Trump’s executive order will result in less enrollment. Individuals that may have purchased health insurance simply to avoid a tax penalty will no longer be motivated.
Premium Increases Overall
In 2017, health carriers announced premium increases of 70% on average. Blue Cross Blue Shield of Texas announced an increase of 56 to 59% on ACA marketplace plans. It’s expected that premiums will again increase for ACA plans and private health insurance plans in Lubbock County for 2018.
For 2018, several health insurance carriers have reported an increase in premiums of 22% for Texans. Most of the increases for 2018 are attributed to recent actions by Congress and the President. Not enforcing the health insurance mandate resulted in 17% of 23% of Montana’s rate hike. Insurers are anticipating far less healthy customers encouraged to sign up as a result.
Subsidies, What Subsidies?
Despite the higher premium in 2017, federal subsidies were also increased for those who qualified, which helped offset the expense of health insurance. For 2018, those subsidies have been stopped by Trump.
For 2018, $7 billion in subsidies help offset the rise in ACA premiums for lower and middle income Americans by providing a payout to insurance carriers. These discounts will still apply to consumers, but the payout to carriers is canceled.
Due to timing of the decision and rules for health insurance already in place, Gold plans in Lubbock will be cheaper than silver plans for some individuals. If this is confusing, we don’t blame you! Talk to an independent agent and shop around.
This year, it is critical you consider buying directly from an insurance company, if you don’t qualify for federal assistance. At Hettler Insurance, we can help you navigate.
How to Prepare for Enrollment in 2018
Obamacare will continue for 2018. Which means the key components to the law, pre-existing conditions, minimum essential coverage and more will remain for another year. And with bipartisan support, subsidies will continue. However, there are still many unknowns.
Open enrollment will be shorter in 2018 than in year’s past and there will be no more advertisements. Health insurance enrollment for all individual plans will begin November 1, 2017 to December 15, 2017. Note, there may also be more paperwork and proof required to qualify for special enrollment or obtaining health insurance at a different time of the year. Save the date and talk to your insurance agent to learn about all options available!