It’s open enrollment time for the Affordable Care Act, which means that now through January 31 anyone who needs coverage can buy a plan. The ACA means that millions more Americans can get affordable coverage, but shopping for health insurance can still be incredibly confusing and stressful. Don’t worry though: to help make the process a little easier, we have a new guide to getting covered under Obamacare for 2016!
What’s different this year
Deadlines: Open enrollment lasts for three months– from November 1, 2015 to January 31, 2016. If you want your coverage to start on January 1, you have to enroll by December 15.
Income guidelines: The cutoffs for Medicaid and subsidies to help pay for premiums are both based on the federal poverty level (FPL), which is a little higher this year than it was last year. (For example, last year the FPL for a single adult was $11,670– this year it’s $11,770.) You can see the new guidelines in this chart:
The penalty for not having coverage: For the first couple of years after Obamacare took effect, the individual mandate was phased in slowly, giving people a chance to get used to the new system. This year, though, the individual mandate is in full effect. The penalty for going without coverage in 2016 is $695 per adult (and $347.50 per child), up to a maximum of $2,085 per household; or 2% of your household’s income– whichever is greater. You’d pay that amount on your 2017 taxes.
Why you should NOT just auto-renew your Obamacare plan next year: If you already have coverage through the Obamacare exchanges and don’t do anything, you’ll automatically be enrolled in your current plan. This is a terrible idea for a bunch of reasons. For starters, the details of your plan might have changed– and as this tool from ProPublica illustrates (it’s from 2015, but the principle will be the same this year), sometimes the difference can be dramatic:
But also, just as importantly, even if your plan doesn’t change, what you pay may be totally different. Most people are getting a federal subsidy to help pay for coverage, which is calculated based on three things: (1) the sticker price of your plan, (2) your income, and (3) the price of a “benchmark” silver plan. Even if your plan’s sticker price and your income will be exactly the same in 2016 (and chances are they won’t), if the price of that benchmark plan changed, then what you pay for your premium could be very different this year.
If you don’t log back onto the Obamacare marketplace to ask for a redetermination of your subsidy, it will automatically apply the subsidy you got last year– even though it’s probably wrong– and if it’s too large, you’ll have to pay some of it back when you file your 2016 taxes. Also, you may find that another plan is much cheaper this year– so it pays to shop around.
The basics of getting coverage
Explainer: How you’ll get coverage under Obamacare: If you’re totally new to all this Obamacare stuff, this is the place to start. There we explain in more detail:
- Who gets coverage through the Obamacare marketplaces? Anyone who’s not already covered through an employer, Medicaid, Medicare, the military, etc.
- Where do you get coverage? Healthcare.gov
- When do you get coverage? This year’s open enrollment lasts until January 31. You can apply to Medicaid at any time during the year, but your income has to be below 138% of the FPL (or perhaps lower than that even if your state didn’t expand) to qualify. If your income is above that cutoff, you can only buy coverage after Jan. 31 if you have a qualifying life event (like having a baby, losing coverage through an employer, etc.).
- What kind of coverage is available? Medicaid for those with incomes below the FPL and private coverage for everyone else. Private coverage is broken into different tiers: bronze, silver, gold, platinum, and catastrophic. The tiers are based on actuarial value, which is super complicated– all you really need to know is that bronze plans will have lower premiums and higher out-of-pocket costs, while gold and platinum plans will have higher premiums but lower out-of-pocket costs. Silver plans are mid-range… usually. (See below about “The OTHER Obamacare subsidy hardly anyone knows about.”)
How much you’ll pay/how the subsidies work: Subsidies are on a sliding scale based on income, and anyone making below 400% of the FPL may be eligible.
Five terms you need to know before you buy Obamacare coverage: Buying insurance can be ridiculously complicated, especially if you’ve never done it before. Here we explain the terms you need to know to understand the coverage you’re choosing– premiums, deductible, co-pay, coinsurance, and out-of-pocket maximum– and how they work together. (Even if you think you know these concepts, you might want to brush up. One study from a healthcare economist at Carnegie Mellon University found that just 14% of respondents with insurance could correctly identify all of those terms.)
The plans and subsidies
What the “actuarial value” of a plan is (and why you should ignore it): Some people see a 60% actuarial value, and think that means the plan will only cover 60% of serious medical expenses, leaving them on the hook for 40% of a potentially huge bill. Fortunately that’s not how actuarial value works– it’s simply an average across the entire population covered by the plan. Only insurance company actuaries need to worry about the specific percentage; for everyone else, just know that lower actuarial value will mean higher out-of-pocket costs.
How your Obamacare subsidy is calculated: an advanced lesson: When you apply through the online marketplace it automatically calculates your subsidy. For most people that’s fine, but if you have more complicated questions about why your subsidy is what it is (for example, if you’re a young person wondering why you don’t qualify for a subsidy even though your income is below 400% of the FPL) and don’t mind a little math, this post will explain.
The OTHER Obamacare subsidy hardly anyone knows about: Most people have probably heard that there are subsidies to help pay for premiums based on income. What you might not know is that if you make less than 250% of the FPL (see the FPL chart above) you also qualify for reduced out-of-pocket costs– but only if you buy a silver-level plan.
An Obamacare guide for freelancers and the self-employed: To get the subsidy to pay for insurance, you have to estimate what your income will be in 2016. If you work a job with a salary or steady hours estimating your income is pretty straight-forward, but if you’re a freelancer or self-employed chances are you have no idea what your income will be next year. This post has some advice for you.
Five things non-citizens need to know about Obamacare: This is the group that will have the hardest time applying for health coverage. Eligibility for subsidies or Medicaid also depends on income for this group, but on top of that immigration status, how long you’ve lived in the country, and in some cases country of origin will all play a role. Here are the most important things you need to know to get covered.
Kaiser Family Foundation has a pretty great FAQ page if you have any questions that aren’t answered in the posts above and a a few important tips to keep in mind if you’re thinking about signing up. Families USA has a fantastic guide for what to do after you sign up to make sure you get the most out of your new coverage. They also have tons of other easy-to-understand guides on how to apply for health coverage, get financial assistance, choosing a health plan, and more. And finally, now through the deadline we’re answering your Obamacare questions on our Facebook page– leave your questions there or in the comments below and we’ll do our best to answer!