This is the time of year when many are faced with choices about health-care coverage for the coming year. People who are not covered by Medicare or employer health plans have to wade through plans offered under the Affordable Care Act, commonly known as Obamacare.
They face higher monthly premiums this year, far fewer plans available in many states and more restricted choices of physicians and hospitals. Here are some key features of the landscape:
Price increases: Insurers decided they were losing money covering all people without regard to pre-existing conditions. Many dropped out, restricted providers or raised prices. Premiums for mid-level health plans under the health act will spike by an average of 25 percent next year, the government reported.
Subsidies and penalties: Theoretically, federal subsidies for lower-income people are supposed to offset the rising premiums. Premium subsidies are available for single people making up to $47,520 or $64,080 for a couple. Even so, the high deductibles for most of these plans make them potentially expensive for low-income earners.
If you fail to sign up for a plan and opt to go without coverage, the penalties have risen this year to $695 for an individual, or 2.5 percent of total household adjusted gross income, whichever is higher. There is a maximum penalty of $2,085.
Deadlines: Open enrollment (or required re-enrollment in your current plan) for 2017 Obamacare coverage started Nov. 1 and continues until Jan. 31. But to make sure your coverage starts on the first day of the new year, the deadline to enroll is Dec. 15. (There are exceptions to these deadlines for life-changing events, including marriage, divorce, job loss, etc.) If you wait to sign up until the last two weeks of January, your coverage won't start until March 1.
How to compare plans: Start at the government website, www.Healthcare.gov. Enter your zip code, the number of people in your household and your 2017 estimated income; the site will estimate your monthly subsidy.
After inputting your current physicians, hospitals and medications, you will be given a choice of plans. It's tempting to look for the lowest-cost plan, typically at the bronze level. But if you choose a silver plan, with a higher monthly premium, you might become eligible for a cost sharing reduction, which lowers your deductible substantially. CSRs are only available with silver plans.
Getting help: Confused? You can get personalized help and advice at no extra cost at websites like www.Ehealth.com (844-229-4337) and www.gohealth.com (888-322-7557). Each site has a calculator to help you compare costs and features. And you can buy an Obamacare plan through them at no additional cost. Expect them to be busy just before the deadline.
An alternative: Short-term plans are a less expensive choice, particularly if you expect to become covered by an employer in the coming year.
The government has just issued restrictions limiting them to three months because so many healthy people have been using them instead of Obamacare plans. That restriction won't go into effect until April 15. Short-terms plans do not qualify as coverage under ACA, so you will be liable for the penalty. The plans are not as comprehensive as ACA coverage, so scrutinize the details.
Find them at www.AgileHealthInsurance.com (800-314-5594). The site will compare short-term plans with the available Obamacare plans in your area, taking into account any subsidy you might receive.
Whatever you do, don't procrastinate. This choice isn't going to get any easier. And that's the Savage Truth.
Terry Savage is a registered investment adviser and author. She responds to questions on her blog at TerrySavage.com.