The Affordable Care Act has reduced the nation’s uninsured population to a record low, but if you are among the 15 percent who purchase health insurance directly, instead of getting it through an employer, Medicare, or Medicaid, here are five things you need to know to get the best, most affordable health coverage.
1. You must purchase or change plans within the annual Open Enrollment period. This year, Open Enrollment for 2016 started Nov. 1, 2015 and ends on Jan. 31, 2016. Miss this window, and there won’t be any way to get insurance, or to change to a different plan, for the rest of 2016. If you sign up or switch plans by Dec. 15, your new coverage will start Jan. 1, 2016. (There are a few exceptions to this rule: If you lose other coverage during the year, for example by losing a job, getting divorced, or moving to another state, you’re entitled to a Special Enrollment Period to get new coverage at any time.)
2. You may be entitled to more financial help than you thought. Depending on your income, you might qualify not only to receive a government subsidy for your insurance premium, but also for help with out-of-pocket costs like deductibles and copays. For instance, a two-person household can get a tax credit to offset part of the premium if their annual income is below $63,720. An income below $39,825 entitles them to buy special plans with reduced out-of-pocket costs. In most cases, the ACA uses the “adjusted gross income” line on your latest tax return, which in some cases could be considerably less than your total income. Healthare.gov has an easy-to-use calculator to assess what types of subsidies and discounts you’re likely eligible for.
3. The cost of your plan could change—a lot—from year to year. Health insurance premiums reset every year, based on the insurance companies’ projections of how much they need to collect to cover their members’ health care costs. And in 2016, as in previous years, changes are all over the map — up significantly for some plans in some localities, down in others. If you already have insurance and don’t do anything, your plan will automatically renew for 2016. To avoid an unwelcome surprise when your first 2016 premium comes due, it’s a good idea to price out your options during Open Enrollment, which will show you whether your current plan is still the best value for you. This is especially true if you receive a tax credit to help with premiums. Because of the way the credit is calculated, it can potentially make the price swing even more severe in certain circumstances.
4. If you choose not to sign up for insurance, you’ll pay a (potentially much) higher penalty in 2016 than in 2015. This year, the penalty was only 1 percent of household income or $95 per person, whichever was higher. In 2016, it will be the higher of 2.5 percent of household income or $695 per person.
5. If you get bogged down buying or renewing online, pick up the phone and get some expert help. The actual application process can be confusing, especially if you have multiple or irregular sources of income, are self-employed, or have a complicated family situation. If you aren’t sure how to proceed, or sense you have gotten off-track with your online application, use HealthCare.gov’s Find Local Help service to hook up with an expert, trained assister who can personally walk you through the process free of charge. Many insurance brokers are also trained to help. If you live in a state with its own health insurance exchange—for example, Covered California and Massachusetts Health Connector—you can bypass HealthCare.gov and find help directly through your state exchange.