Making Sense of the Health Insurance Marketplace

The good news about individual health insurance: on average, premiums for low-cost plans have dropped and choices have increased.

Health insurance is a big political issue during any election year, with a current push in court to scrap the original Affordable Care Act (ACA), also called Obamacare, and politician debating other alternatives.

A majority of the public — 68 percent in one poll — support the idea of a government-run health plan that would compete with private insurers and be available to all Americans. That majority includes 42 percent of Republicans.

A smaller majority, 61 percent, like the idea of Medicare-for-all, a single government-run national health plan for everyone.

In the meantime, if you don’t have access to insurance through a parent, partner, job, Medicare, or Medicaid, you are either uninsured or buying on the individual (non-group) market through the official ACA Marketplace or directly from private insurers.

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The ACA Marketplace is stable

The original law included a provision that everyone had to buy insurance or, if not, face a small tax penalty. The Trump administration dropped the penalty. Insurers say the change led to dips in enrollees.

But the impact wasn’t major and, going into 2020, total non-group plan enrollment stayed steady, the Kaiser Family Foundation reports, and premiums in the official marketplace actually dropped by 2 to 3 percent, on average.

Within that average decrease was a lot of variation. According to an analysis from the American Action Forum, the lowest-cost Bronze plan, the least generous, dropped on average by 3 percent, while premiums for the lowest-cost Gold plan increased on average by about 9 percent.

Your cost also depends upon where you live. Statewide premiums rose in New York, Idaho, and Indiana, despite dropping for the nation as a whole. In a rating area of Georgia, a benchmark plan premium dropped by 40 percent from 2019 to 2020 but rose 74 percent in part of Idaho.

One fear was that so many insurers would drop out that people would have less choice. In fact, some insurers have dropped out, but others have expanded — which is what you’d expect in a competitive market. In 2020, nearly 70 percent of enrollees will have a choice of three or more insurers, an improvement from 2018 and 2019. Again, states vary. In Delaware and Wyoming, only one company offers an ACA plan, but in California, New York, and Wisconsin you can choose among more than 10.

The ACA included the rule that insurers must cover people with pre-existing conditions, established standard benefits, and other rules limiting your costs, while offering tax credits to help low-income people pay premiums. It also offered states funding to make more people eligible for Medicaid. The uninsured rate dropped to a historic low by 2016, with the biggest gains among people newly eligible for Medicaid. Several states, however, did not adopt the Medicaid expansion. Since 2016, the number of uninsured has grown by 1.2 million.

Are you eligible for a subsidy?

About half of the currently uninsured are eligible for help under the ACA but may not know this. Check HealthCare.gov, or see if your state has its own website, listed here. If you didn’t apply for a discount upfront, you can still get the tax break when you do your taxes. If you do get a discount and turn out to earn above the eligibility limit, you’ll owe money.

You could be eligible if your income falls below 400 percent of the federal poverty level. For 2020 health plans, the threshold is $49,960 for a single person. Here are more examples:

• Household of 2 — income of less than $67,640
• Household of 3 — income of less than $85,320
• Household of 4 — income of less than $103,000
• Household of 5 — income of less than $120,680

The state open enrollment periods run from October or November and end in December or January. However, you can buy insurance outside that window if you had a special situation during the buying time (like most company-sponsored open enrollment periods). There are other circumstances that trigger a 60-day period to buy new insurance: if you get married, have or adopt a baby, become a U.S. citizen, leave prison, lose your other health coverage, or move outside your current insurer’s coverage area.

What’s next?

It’s possible that the U.S. Supreme Court will strike down the ACA. Other changes could come in your state.

Colorado and Washington are putting in a place a public insurance option that would be run by private companies and pay providers at least 160 percent of Medicare rates. It’s not clear whether you’d have this option if you could enroll in an employer plan. In Pennsylvania and New Jersey, the state will run the ACA Marketplace rather than the federal government. California plans to fund expansion of coverage. Georgia is seeking a waiver of ACA rules to allow consumers to choose plans with less coverage and enroll through insurers and brokers.

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