ACA Navigation! Transforming from Complicated Process to Complex Operation?

The ACA health insurance marketplace is "still standing," with open enrollment between Thursday, Nov. 1, 2018 & Saturday, Dec. 15, 2018 (Bernard, 2018). This is the time during which Americans can get (enroll, re-enroll, or change) their health insurance policy through the ACA Health Insurance Marketplace. For their January 1, 2019 ACA-compliant health insurance coverage, individuals must opt-in during the open enrollment time (Open Enrollment 2019, 2018).

For individuals who don't purchase health insurance during the Open Enrollment period, they can still get health insurance throughout 2019 (Bernard, 2018). Short-term health insurance is available as is employee-based coverage. In addition, American Indians, Alaska Natives, Medicaid-eligible, CHIP, and Qualifying Life Event individuals can get also health insurance, while still qualified for insurance subsidies and tax credits. At the state level, there are many new options for new as well as re-enrolled customers (Open Enrollment 2019, 2018).

Evolving ACA Healthcare Marketplace: After years of double-digit rate increases, the insurance market is holding stable its premium prices. The short, albeit steep, ACA learning curve has thrusted the insurers (new and returning) into a more competitive market. In response, they are more pressed than ever to regulate their overpriced plans since the ACA full effect in 2014. Premiums for the Benchmark “Silver” plan are likely to decline an average of 1.5%, after a steep rise for the last two years (Bernard, 2018)

What startling is the widening schism in plans and prices between the states and counties as well, asserts Noah Lang, chief executive of Stride Health, an ACA-compliant online broker linked to HealthCare.gov (Bernard, 2018). Aside from these exogeneous factors, individual insurance costs can still vary based on income, location and plan level. By many accounts, studies show marked variation in insurance rates between Tennessee and North Dakota; The later might experience steep increases, while the former might see double-digit declines (Bernard, 2018).

Changes to Insurance Pricing: Monthly premium costs were to drop 16% for the Benchmark Silver plans in 2019. Instead, the prices will go up, due to the Trump Administration recent policy changes, according to Kaiser Family Foundation.

One key policy change was the elimination of the indvidiual mandate penalty. It is an IRS-imposed tax on those individuals with no ACA-compliant health insurance coverage. Without enforced penalty, the US government with its ACA officials argue that otherwise healthy individuals have no incentive to buy insurance. Forgoing health insurance will most likely push prices higher for all. Massachusetts, New Jersey, and Washington D.C. all three have recently adopted their own requirements.

Other policy changes include 1) the elimination of the subsidies or reimbursements for insurance companies in exchange for discounting out-of-pocket insurance costs (premiums, coinsurances, copayments, deductibles) for lower-income consumers; 2) the cut in funding for navigators' budget (down to $10 million); and 3) the expansion of short-term insurance plans.

Selecting the Coverage Plans: There are four different plans - Bronze, Silver, Gold, and Platinum. Available on both the federal-run HealthCare.gov exchange and the state-run exchanges, the most precious metal costs the least in out-of-pocket payments, like deductibles, copayments, and coinsurances. Therefore, platinum is the priceless one, followed by gold, silver, bronze. It is worth mentioning that the Silver plan is considered the Benchmark plan wherein the prices of the other three plans are pegged.

These metal plans are ACA compliant in terms of "certain essential health benefits." The ACA consumer protections require certain health benefits across all four levels. The two key differentiators to these four levels are the income-based level of 1) out-of-pocket expenses, and 2) benefits covered. For example, both the Bronze & Silver plans require more out-of-pocket expenses for lower premiums. The Gold & Platinum plans require less out-of-pocket expenses in exchange for much higher premiums; obviously, these two plans offer more benefits in return.

Catastrophic coverage is available only for those individuals under 30.

Notable Exceptions: Recently, the Silver plans became more pricey than the Gold plans in over 1,195 counties, according to David Anderson of Duke University. He adds, that these counties are spread more likely in the Midwest, Southeast, and Mountain States.

This oddity emerged last year in response to the Trump administration ending its subsidies to insurance companies. In order for the ACA to survive, the insurance companies have agreed to provide lower-income consumers with discounts on their out-of-pocket expenses (in the form of lower premiums, deductibles, coinsurances, and copayments). In return, the US government will refund these insurance companies.

As the health insurance companies lost their government's subsidies, they had to seek ways to recoup their lost revenues. So what did they do? They upfronted their costs onto the silver plans which the lower-income consumers must buy to qualify for the discounts. It was an accounting matching of revenues to expenses.

Subsidies Updates: Consumers with income between 100 % to 400 % of the povertly level (up to $100,400 for a family of four) may qualify for subsidies on premiums (in the form of tax credits). Those with income between 100% to 250% of the poverty level and in the Silver plan may also be eligible for subsidies on their out-of-pocket expenses. This is key for why lower-income consumers are better off with the Silver plans.

If you are one of those consumers with income slightly over 400% of the poverty level but still qualify for subsidies, you may have other factors to consider. You may see lower subsidies in 2019, as costs of the Silver plans have dropped slightly in 2018. In some cases, the subsidies are high enough to offset "most of the monthly premium costs" of the Bronze plan or to make the Gold plan more affordable.

If you don't qualify for subsidies, however, it could be worthwhile for you to consider ACA compliant plans off the exchanges from either an insurance or a broker. With the recent uptick in prices of certain Silver plans, purchasing the same metal plan off the exchange could save you more than 10% average, reports Cynthia Cox at the Kaiser Family Foundation.

Silver plans might be too expensive now as insurance companies had to raise their prices to recoup their losses. A 40-year old single person might pay an average of $480 a month for the full-price, benchmark Silver plan from either the federal or the state exchange. Adding other family members may "start looking more like another mortgage payment," according to Cynthia Cox.

The Calculus of Affording Individual Insurance Plan: For individuals looking for health insurance, it’s important to know what are the ACA-compliant insurance policy benefits offered. In addition, it is advisable to assess the applicable costs in terms of cost-sharing, like deductibles, premiums, coinsurance, copayments. For individuals looking to renew their health insurance, it is prudent to compare benefits and costs for different health insurance plans, especially if there are changes in circumstance.

For 2019 re-enrollment, individuals are to pore over health insurance options, since policy provisions and riders change yearly. Renewing an existing policy could be more expensive, whereas a new policy may be better and more affordable (Open Enrollment 2019, 2018).

For 2019 enrollment, it is essential that 1) they renumerate what they know about themselves, i.e., acute / chronic conditions, medical, behavioral, dental, and vision problems, pharmaceutical drugs & therapy treatments, healthcare maintenance needs, alternative medicine, durable equipment, etc. After profiling their medical needs, 2) they identify and inquire about their healthcare delivery & access points. These include their MUST doctors/NPs, hospitals, retail & compounding pharmacies, diagnostic/labs, rehab centers, behavioral & mental offices, home health care & assisting living, transportation & ambulance portals, etc.

In a simple scenario, individuals could match perfectly their MUST healthcare access and delivery points to their BEST policy insurance benefits - not likely though. Therefore, it is rewarding that 3) they assess what their policy covers in terms of in-network vs. out-of-network providers as well as carve-in vs. carve-out benefits. Afterward, 4) they have to price out the policy - a cost-benefit comparative analysis of the benefits offered vs. associated costs.

• Are your doctors and preferred hospitals in the network?
• Do the insurance/managed care plans change year to year? When they do, is it limited?
• Which cost-sharing tiers do your prescriptions fall into? How much of the costs are covered?
• How will the costs of treating continuing health conditions be split?

The term "deductible" has evolved over the years, as payors pushed their cost-sharing & cost-shifting to employees. As Katherine Hempstead of Robert Wood Johnson Foundation reports, "Some plans might cover certain medical services with some cost-sharing (co-payment), before fulfilling their required deductible." She adds, "Silver plans are more likely than Bronze to cover certain services" within the deductible period. Most plans will require some cost-sharing (co-payments and co-insurance), up to the out-of-pocket expenses cap. For those who suffer from acute or chronic conditions, they will pay more premiums (& other cost-sharing items) up to their out-of-pocket expenses cap.

Short-term Insurance Plans: These are non-compliant with the ACA's consumer protections, as these are considered very risky with little financial coverage. For these reasons, these are unavailable at the federal- and the state-run healthcare exchanges. These are also banned in some states, e.g., California.

A recent Trump administration change in regulations has extended their coverage period from a three-month to up to 12-month period. Heavily promoted as inexpensive, these insurance products could be renewed for up to extra 24-month period. Aside from being ACA non-compliant, these plans are limited in insurance benefits with cap on annual and lifetime benefits. Most don't cover drugs, ancillary services like physical therapy, and pre-existing conditions.

These short-term plans are often marketed under dubious terms, like being sold on suspicious sites "with names" resembling those federal- or state- run exchanges. Brokers prefer these plans, due to high sales commission. Another benefit for brokers is the direct B2C sales model or the direct broker-to-customer approach. It is considered less tedious compared to the exchange-based plans that require more vetting of consumers' income and others.

Navigator's Services: For directing consumers' enrollment onto the ACA healthcare exchanges, the Obama Administration assigned and funded nonprofits navigators. However, the Trump Administration cut such funding by early December 2016 - limiting consumers' access to unbiased services. With fewer such access at the federal level, consumers may find navigators on their state exchange's website. Or, they could purchase their insurance from online and on-ground brokers. Most likely, the insurance brokers have access to algorithms that make the recommendations based on the consumer's info, e.g., demographic information, income, doctors, drugs, medical conditions.

Final Notes: Navigation of the ACA Healthcare Marketplace is transforming from a complicated process into a Byzantine complex system. Despite its convolution, it makes good sense to shop around for best-fit policy. This is done by comparing the MUST benefits (with relevant costs & riders) of policies that are offered by different insurance companies across online and onground vendors. Henceforth, it is always best to shop around before buying a new policy or renewing an existing policy.

References:

Bernard, Tara Siegel. (2018, Nov 2). It’s Obamacare Sign-Up Time: How to Untangle Coverage Choices. NY Times, p. B1, B7 - https://www.nytimes.com/2018/11/01/your-money/signing-up-obamacare-affordable-care-act.html

Open Enrollment 2019 Dates and Deadlines. (2018). Health Coverage Fast, https://www.healthcoveragefast.com/articles/open-enrollment-2019-dates-and-deadlines/