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Shopping for ACA health insurance? Here’s what’s new this year

By Julie Appleby,
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It’s fall again, which means shorter days, cooler temperatures and open enrollment for Affordable Care Act marketplace insurance — enrollment begins this week for coverage beginning January 1, 2023. Even though much of the coverage remains the same from year to year, there are some upcoming changes that consumers should watch out for this fall, especially if they’re having trouble buying expensive policies through their employer.

Over the past year, the Biden administration and Congress have taken steps — primarily related to premiums and subsidies — that will affect coverage beginning in 2023. Meanwhile, confusion caused by court decisions may raise questions about coverage for preventive care or for abortion services.

Open enrollment for people buying health insurance through the marketplaces begins Nov. 1 and, in most states, runs through Jan. 15. To get coverage that starts January 1st, enrollment usually needs to happen by December 15th.

Many people who get coverage through their jobs also have to choose a plan this time of year. And their decisions could be affected by new ACA rules.

So what’s new, and what should you know when shopping? Here are five things to keep in mind.

1. Some families who didn’t qualify for ACA subsidies now do

One big change is that some families who were barred from getting federal subsidies to help them buy ACA coverage can now qualify.

A rule recently finalized by the Treasury Department is designed to address what has long been called the “family bug.” The change increases the number of families with work-based insurance who can choose to drop their coverage at work and qualify for subsidies to get an ACA plan instead. The White House estimates that this adjustment could help about 1 million people get coverage or get more affordable insurance.

Previously, employees could only qualify for a subsidy for marketplace insurance if the cost of their employer-based coverage was deemed unaffordable based on a threshold set each year by the IRS. But that provision only took into account how much a worker would pay for insurance for himself or herself. The cost of adding family members to the plan was not part of the calculation, and family coverage is often much more expensive than employee-only coverage. The families of employees who fall into the “fault” are either uninsured or paying more through their jobs for coverage than they could if they could get an ACA subsidy.

Now the rules say to be eligible for the subsidy, the cost of family coverage must also be taken into account.

“For the first time, many families will have a real choice between an offer of employer-sponsored coverage and a market plan with subsidies,” said Sabrina Corlette, a researcher and associate director at Georgetown University’s Center for Health Insurance Reform.

Workers will now be able to get marketplace subsidies if their share of the premium for their work-based coverage exceeds 9.12 percent of their expected 2023 income.

Now two calculations will take place: the cost of the employee-only coverage as a percentage of the worker’s income and the cost of adding family members. In some cases, the worker may decide to stay on the employer plan because his or her payment for coverage falls below the affordability threshold, but the family members will be able to get a subsidized ACA plan.

Previous legislative efforts to fix the family fault have failed, and the Biden administration’s use of regulations to fix it is controversial. The move could eventually be challenged in court. Still, the rules are in place for 2023, and experts, including Corlette, said families who could benefit should go ahead and sign up.

“It will take some time for all of this to be resolved,” she said, adding that it was unlikely there would be any decision in time to affect policy for 2023.

An Urban Institute analysis published last year estimated that the net savings per family could be about $400 per person and that the cost to the federal government for new subsidies would be $2.6 billion per year. Not every family will save money by making the change, so experts say people need to weigh the benefits and potential costs.

2. Preventive care will still be covered without a co-pay, but abortion coverage will vary

Many people with insurance are happy when they go for a cancer screening, or seek other preventive care, and find that they don’t have to pay anything out of pocket. It comes from a provision in the ACA that prohibits cost-sharing for a range of preventive services, including certain tests, vaccines and drugs. But a September ruling by U.S. District Judge Reed O’Connor in Texas led to confusion about what could be covered next year. The judge declared unconstitutional one method the government uses to determine which preventive treatments are covered without sharing patient costs.

Ultimately, this could mean that patients have to start paying part of the cost of cancer screenings or drugs that prevent the transmission of HIV. The judge has yet to rule on how many people the case will affect. But for now, the ruling only applies to the employers and individuals who filed the lawsuit. So, don’t worry. Your free screening mammogram or colonoscopy is still free. The ruling is likely to be appealed, and no decision is expected before the start of the 2023 coverage year.

The other court decision that has raised questions is the Supreme Court ruling that overturned the constitutional right to an abortion. Even before that decision was announced in June, coverage of abortion services in insurance plans varied by plan and by state.

Now it’s even more complicated as more states move to ban or restrict abortion.

State insurance rules vary.

Twenty-six states limit abortion coverage in ACA marketplace plans, while seven states require it as a benefit in both ACA plans and employer plans purchased from insurers, according to KFF. These states are California, Illinois, Maine, Maryland, New York, Oregon and Washington.

Employees and policyholders can check insurance plan documents for information about covered benefits, including abortion services.

3. Premiums are rising, but this may not affect most people on ACA plans

Health insurers are raising premium rates for both ACA plans and employer coverage. But most people who get subsidies for ACA coverage won’t feel that pinch.

This is because the subsidies are linked to the cost of the second cheapest “silver” plan offered in a market. (Market plans are offered in colored “tiers,” based on how much they potentially cost policyholders out of pocket.) As those baseline silver plans increase in cost, so do the subsidies, which offset all or most of the premium increases. Still, shop around, experts advise. Switching plans may be cost effective.

As for subsidies, the passage of the Inflation Reduction Act this summer guaranteed that the enhanced subsidies that many Americans received under legislation linked to the covid-19 pandemic will remain in place.

People earning up to 150 percent of the federal poverty level — $20,385 for an individual and $27,465 for a couple — can get an ACA plan without a monthly premium. Consumers earning up to 400 percent of the federal poverty level — $54,360 for an individual and $73,240 for a couple — get sliding scale subsidies to help offset premium costs. People with an income of more than 400 percent must pay no more than 8.5 percent of their household income for premiums.

For those with job-based insurance, employers generally set the amount workers must pay for their coverage. Some employers can pass on rising costs by increasing the amounts taken out of paychecks to go toward premiums, setting higher deductibles, or changing health care benefits. But anyone whose share of their job-based coverage is expected to exceed 9.12 percent of their income can see if they qualify for a subsidized ACA plan.

4. Debt to insurers or the IRS will not stop coverage

Thank you covid for this. Typically, people who get subsidies to buy ACA plans must prove to the government on their next tax return that they received the correct subsidy, based on the income they actually received. If they fail to reconcile with the IRS, policyholders will be eligible for the subsidy the next time they enroll. But because of ongoing covid-related problems processing returns at the IRS, those consumers will get another reprieve, continuing an effort put in place for tax year 2020 by the American Rescue Plan Act.

Also, insurers can no longer deny coverage to people or employers who owe premiums in arrears for previous coverage, said Karen Pollitz, a senior fellow at KFF. It follows a reexamination of a wide range of Medicare and ACA rules prompted by an April executive order from President Joe Biden.

“If people fell behind with their 2022 premiums, they should still be allowed to re-enroll in 2023,” Pollitz said. “And when they make the first-month premium payment to activate coverage, the insurer must apply that payment to their January 2023 premium.”

5. Comparison shopping will probably be easier

Although ACA plans have always been required to cover a wide range of services and offer similar benefits, there was still variation in the amounts patients paid for office visits and other out-of-pocket costs. From this year’s open enrollment, new rules come into effect aimed at making comparison easier. Under the rules, all ACA health insurers must offer a set of plans with specific, standardized benefits. For example, the standard plans will have the same deductibles, co-payments, and other cost-sharing requirements. They will also offer more coverage before a patient has to start paying for a deductible.

Some states, such as California, have already required similar standardization, but the new rules apply nationally to health plans sold on the federal marketplace, healthcare.gov. Any insurer offering a non-standard plan on the market must now also offer the standardized plans.

Under another set of rules, starting Jan. 1, all health insurers must make cost-comparison tools available online or over the phone that can help patients predict their costs for 500 “purchasable services,” such as knee replacements, a colonoscopy, a chest X-ray, or childbirth.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization that provides information on health issues to the nation.

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