By Jason Stevenson
Every fall, the leaves in the Salt Lake Valley change colors to signal many things — colder nights, shorter days, and approaching deadlines to purchase health insurance.
Because open enrollment began Nov. 1, now is the time to get serious about researching your options, comparing plans and prices, and locking in health coverage for the coming year.
If you are a freelancer, small-business owner or sole proprietor, chances are you purchase health insurance through the individual market. Unlike your friends and colleagues who gain coverage through an employer-based plan, you must hustle to buy your own health insurance each year.
And ever since the arrival of the Affordable Care Act, also called Obamacare, in late 2013, the process has become more complex. For instance, most Utahns can access subsidies to reduce premium costs, and insurers can no longer bar people because of pre-existing conditions, but the choices on Utah’s marketplace have dwindled in recent years just as most premiums have increased.
Here are several key points to keep in mind as you shop for health insurance this month:
• Despite many congressional repeal attempts this year, Utah’s individual market is open for business at www.healthcare.gov. Plus, you can “window-shop” for plans in a few minutes by going to www.healthcare.gov/see-plans.
• Two Utah-based health insurers — Select Health and University of Utah Health Plans — will sell plans in all 29 counties. Most Utahns will have a choice of up to 28 plans, including several plans linked to health saving accounts, also called HSA-qualified plans.
• Molina Healthcare is leaving Utah’s individual marketplace at the end of 2017, causing about 70,000 consumers to choose a new plan for next year. Molina will maintain its offerings for Medicaid, CHIP and Medicare in Utah.
• Open enrollment began Nov. 1 and ends Dec. 15. This year, open enrollment lasts only 45 days, half has long as during previous years.
• Both the premium subsidies (tax credits) and the lower deductibles and co-pays created by cost-sharing reductions (CSRs) are intact for Utah’s 2018 marketplace. Nothing has changed for Utah consumers.
• Sliding-scale premium subsidies are available to Utahns earning between 100 percent and 400 percent of the federal poverty level. For 2018, that means a family of four earning between $24,600 and $98,400 can qualify for subsidies to reduce their monthly premiums.
• While premiums for Silver plans (the most popular plan choice in Utah) increased significantly due to uncertainty over the Trump administration’s refusal to pay CSRs, more robust premium subsidies will ease these increases for most Utah consumers.
The biggest challenge for the Utah marketplace in 2018 is the specific increase in premiums for Silver plans. Since 72 percent of Utahns with marketplace insurance selected a Silver plan in 2017, many will be affected by these increased prices. In Salt Lake County, the average Silver premium increased 61 percent for 2018 — three times more than it did in 2017 — while average Bronze and Gold premiums increased 19 percent and 20 percent, respectively.
Why did Silver premiums spike in Utah? Because the Utah Insurance Department advised the state’s two marketplace insurers to increase Silver premiums to offset the potential cut in CSR funding from the federal government. And on Oct. 14, the Trump administration cancelled CSR payments for 2018, making the state’s insurance department seem very prudent in their advice (other states did not take precautions and were caught short by the CSR cancellation). As a result, the Utah Insurance Department calculated that almost 50 percent of 2018’s premium increase in Utah was caused by political uncertainty emanating from Washington, D.C.
The 86 percent of Utah marketplace consumers who qualify for premium subsidies will be mostly insulated from these premium increases. This is because premium subsidies rise in relation to the second-lowest Silver plan, also called the benchmark plan. If Silver premiums go up, so do the subsidies. But about 50,000 Utahns who purchase individual market insurance either don’t qualify for subsidies or don’t realize these subsidies are available. Many entrepreneurs and small-business owners fall in to this category. These consumers will face much higher Silver premiums without the cushion of the subsidies to offset them.
What are your options if you earn more than 400 percent of the poverty level ($48,240 for a single person, and $115,120 for a family of five) and don’t qualify for premium subsidies?
Here are three strategies to find affordable insurance for 2018:
• First, look Silver plans sold off the marketplace. Health insurance today is sold on the marketplace (at healthcare.gov where premium subsidies are available), and off the marketplace (directly purchased from an insurer where subsidies are not available). Because the CSR uncertainty caused Utah insurers to increase premiums for on-marketplace Silver plans, this means that very similar Silver plans sold off the marketplace have premiums that are $95 (age 30), $101 (age 40) and $146 (age 50) cheaper per month.
If you earn too much to qualify for a subsidy, off-marketplace plans should be on your shopping list. In Utah, off-marketplace Silver plans can be purchased directly from these four insurers: Select Health, University of Utah Health Plans, Regence Blue-Cross and BridgeSpan.
• Second, consider Enhanced Bronze plans. A new plan type offered in 2018 is the Enhanced Bronze plan, with average premiums that are $121 (age 30), $129 (age 40) and $185 (age 50) cheaper per month than average Silver plans. Keep in mind, however, that both Bronze and Enhanced Bronze plans have higher deductibles and co-pays than Silver plans — approaching $13,000 for a typical family plan. To reduce those out-of-pocket costs, consider purchasing an HSA (health savings account)-qualified plan to lock in pre-tax savings on your predictable healthcare spending.
• Third, some Gold plans will be cheaper than Silver plans in 2018. The upside-down world created by the CSR uncertainty means that monthly premiums for the lowest-priced Gold plan are $18 cheaper (age 30) than the most expensive Silver plan with similar deductibles and co-pays.
If health insurance so complex, why go through the hassle of signing up for health insurance this month?
First, if you don’t sign up before Dec. 15, you will be out of luck for the rest of the 2018. Open enrollment (Nov. 1-Dec. 15) is the only time of year you can sign up, re-enroll or switch plans without a life-qualifying event like a birth, marriage, death or loss of coverage. In addition, the federal government is making it harder for people to sign up for health insurance outside of the open enrollment period by requiring additional documentation that a qualifying life event has occurred.
Second, despite what you may think, getting sick or having an accident is not a life-qualifying event that enables you to enroll in coverage. If a lab test comes back abnormal next May and your doctor recommends additional and expensive testing, you won’t be able to sign up for insurance to cover it. To encourage year-round coverage and prevent people from gaming the system, the Affordable Care Act restricts open enrollment a specific time period each year — and that period is happening right now.
Third, the U.S. healthcare system is geared toward health insurance as the primary payment model. Self-pay is feasible for many routine medical tests, but the Affordable Care Act also made many of these procedures — including vaccinations, physical exams, mammograms, colonoscopies and well-child checks — free of charge. Health insurance opens doors to medical care that is beyond the reach of self-pay, from intensive testing to medications to appointments with specialists. For instance, the cost of a normal delivery at LDS Hospital in Salt Lake City is $7,000, while the cost of a C-section is $10,700. One day in the NICU for a baby that needs extra care costs about $3,000 a day.
Fourth, having health insurance doesn’t just protect you from unpayable medical bills. It also allows you to access the discounted rate for medical services and procedures. You’ve probably seen this on insurance bills: The sticker price for an MRI scan might be $2,000, but your insurance company has negotiated a discounted price of $1,200. Without insurance, chances are you would pay the full sticker price unless you spend a few hours on the phone convincing the doctor or hospital to lower their fee.
Fifth, you don’t have to do it alone. Health insurance is complicated. After all, what is the difference between a deductible and an out-of-pocket maximum if they both mean the same thing? (Hint: Your insurance starts to pay a large portion of your expenses once you hit your deductible, typically 80 percent, and your coverage pays for 100 percent of expenses after you hit your out-of-pocket maximum.)
Fortunately, Utahns can access free help from Take Care Utah’s network of navigators and brokers. Take Care Utah is the official nonprofit navigator in Utah, and their trained experts have helped tens of thousands of Utahns sign up for insurance since 2013. Find the nearest assistor by going to www.takecareutah.org or calling 2-1-1 from anywhere in the state.
Jason Stevenson is education and communications director at Utah Health Policy Project.