Understand the changes in the health insurance system for 2021

Healthcare reform has been in the news almost continuously for the past few years, so if you're not sure what happened and what is happening with the mid-year subsidy changes in 2021, you are certainly not alone. . Let's take a look at what has changed, what has stayed the same, and what you can expect from your health coverage in 2021.

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Note: This discussion is primarily about individual / family health insurance . Although only a small fraction of the US population has individual market coverage, This is where most of the headlines come from, as the Affordable Care Act (ACA) has hit the market the most.

[If you obtain health insurance from your employer, they will provide details of any changes for the next planning year, which may or may not follow the calendar year. And if you have public health insurance (Medicare or Medicaid), you will receive messages from the state government, the federal government, or the insurer that administers your coverage (Medicare Advantage, Medigap, Medicare Part D, or private Medicaid). managed care plan).]

The American bailout plan made subsidies bigger and more affordable for 2021 and 2022

For the millions of people who have already signed up for 2021 health plans through exchanges, the American Bailout Plan has increased its premium subsidies and made the subsidies available to previously ineligible members. The largest subsidies are also available to millions of uninsured Americans and people covered by off-the-market insurance, but only if they sign up for the plan through their state exchange .

The American Rescue Plan has made several important changes to your 2021 health insurance subsidy:

  • The upper income limit (generally 400% of the poverty line) to qualify for the subsidy has been lifted for 2021 and 2022 . People with income above 400% of the poverty line may be eligible for the premium subsidy if the cost of the control plan would have otherwise been more than 8.5% of their family income.
  • The percentage of income that people have to pay for the control plan has been reduced for people with income below 400% of the poverty line. It now ranges from 0% to 8.5% of income, depending on the family's income. This means that people who were already eligible for grants are now eligible for larger grants.
  • People who receive unemployment benefits at any time during 2021 are eligible for a premium subsidy large enough to fully cover the cost of the control plan, as well as a complete reduction in equity .

Second Chance to Sign Up or Change Plans – Lasts through August 15, 2021 in most states.

The ongoing COVID pandemic and expanded subsidies created by the American Rescue Plan are giving people a second chance to enroll in the 2021 health insurance program or change plans.

In most states, this registration window continues through August 15, 2021 , although there are states with earlier deadlines and some have extended the deadline until the end of 2021.

No qualifying event is required during the COVID / ARP registration window. Typically, a qualifying event is required for enrollment and plan changes outside of the annual fall enrollment period, but the rules will be different in 2021.

The ACA has not been canceled or replaced, and the lawsuit does not affect enrollment in 2021 plans.

Despite the constant headlines about health care, the Affordable Care Act remains the law of the land. And, as noted above, the American Rescue Plan expanded ACA grants to make them larger and more affordable.

However, there is a constant legal threat to the ACA. In December 2019, the Texas Court of Appeals v. USA / Hazard annulled the ACA. The Supreme Court agreed to accept what is now California v. Texas, and oral arguments were heard in November 2020, just days after Justice Amy Connie Barrett took over as the new judge. The decision is scheduled for mid-2021. The first plaintiffs in the case, those seeking to repeal the ACA, are 18 states led by the Republican Party. And the law was defended by the Democratic-led states as the United States Department of Justice refused to defend the ACA.

The lawsuit is based on the fact that the ACA individual tax / penalty was canceled after the end of 2018, and the plaintiffs argued that the duty-free mandate is no longer constitutional (as the tax was a key point of the mandate declared by the Supreme Court in the 2012 lawsuit). And they also claim that this mandate is inseparable from the rest of the ACA, which means that if it is repealed, the entire ACA should be withdrawn.

Federal judges agreed with the plaintiffs in late 2018 and again in late 2019, but nothing changed during the ACA's appeal process. This will continue, at least until the Supreme Court makes a decision on the case sometime in 2021 (probably in June, but possibly sooner).

If the Supreme Court were to rule that the individual mandate is unconstitutional and inseparable from the rest of the ACA (that is, the entire ACA should be abolished), it would certainly cause unprecedented chaos in the insurance markets and in many other aspects of our system. health care. Many legal experts predict that the Court will instead rule that the individual mandate is decoupled from the rest of the ACA, leaving the rest of the law unchanged, although it is never wise to make general assumptions in terms of how the Court will rule. But if they rule that only the individual mandate should be canceled, and the rest of the ACA remains in effect, that won't change anything, as the federal penalty for breach of mandate since early 2019 has been $ 0 .

So, for the moment, nothing has changed in the ACA. In mid-2021, this may be a completely different story, but we won't know until the Supreme Court makes its decision in this case.

Individual mandate penalty no longer applies (in most states)

While attempts to repeal the ACA were unsuccessful, Republican lawmakers succeeded in repealing the ACA's individual mandate as part of a tax bill they passed in late 2017.

The cancellation of the penalty went into effect in January 2019, which means that there is no longer a federal penalty for the uninsured in 2019 or future years.

But Massachusetts, New Jersey, the District of Columbia, California, and Rhode Island have their own individual mandates with penalties for noncompliance (Vermont also has an individual mandate as of 2020, but no penalty for noncompliance). So if you are in one of these states and decide to cancel your coverage in 2021, keep in mind that you will have to claim a penalty waiver (details vary from state to state) or pay a penalty when you file. by 2021.

The rest of the ACA remains in effect

In addition to lifting the individual mandate penalty (and eliminating some of the ACA taxes, including the Cadillac tax ), the ACA is still in full operation. This includes premium subsidies , cost-sharing subsidies (also known as cost-sharing subsidies), guaranteed trouble coverage , Medicaid expansion, employer mandate , protection for people with pre-existing medical conditions , basic health benefits , rate rules. medical losses , cash limit, funds , etc.

Cost-sharing subsidies are still available in 2021, although the federal government stopped reimbursing insurers for these costs at the end of 2017. Insurers in most states have included the cost of providing cost-sharing subsidies in the premiums they charge. In most cases, the cost is only added to the Silver plan rates , resulting in larger subsidies for everyone who receives premium subsidies.

Millions of uninsured Americans were already eligible for free health insurance (meaning no monthly premiums) by 2021, thanks in part to these larger premium subsidies. And millions more are eligible for free insurance in 2021, when the American Rescue Plan went into effect.

The maximum limit for cash payments increased to $ 8,550

According to ACA rules, the maximum out-of-pocket limit for essential health care services is limited while an individual receives care from a network provider. In 2021, the maximum amount of cash for a person is $ 8,550 (for a family it is always double). Health plans may have cash limits that are less than but not more than this amount.

Catastrophic plans have a deductible equal to the maximum out-of-pocket limit, so all disaster plans in 2021 have a deductible of $ 8,550.

Cash limits apply to all health plans not created by a grandparent , including large group plans and self- insured plans. These plans don't have to cover basic ACA health benefits, but to the extent that they are (and most do), they can't have out-of-pocket payments of more than $ 8,550 by 2021.

Average insurance premiums increased slightly in 2021 (average control premiums decreased in most states), but the US bailout plan increases subsidies

Unlike 2017 and 2018, When premiums for individual health insurance increased significantly, average premiums before subsidies increased by less than 3% nationwide in 2019 and were largely unchanged in 2020, and it increased only slightly in 2021, by an average of 1.1%.

But for the third year in a row, the overall average premiums for the reference plan (the second lowest-cost silver plan in each area) decreased in 2021 in 36 states using HealthCare.gov. In 2021, the average premium reduction for these plans was 3%.

The overall average decline in base premiums was due to new insurers entering (or re-entering) select markets in many states. and price cuts by some existing insurers.

As always, when it comes to personal health insurance, there are significant differences from state to state and even from area to area within the same state. But overall, benchmark premiums have decreased, while overall average premiums (for existing plans; excluding new entrants to the market) have increased very slightly.

Premium grants are based on the cost of the control plan. And when basic premiums drop, all other factors being equal, subsidies drop as well. As such, applicants receiving premium subsidies may find that their subsidy amounts were lower in 2021, before the US Rescue Plan subsidy enhancements were implemented. Depending on how your own plan's pre-subsidy cost has changed, this could result in a higher post-subsidy premium in 2021 if they chose to keep their existing plan.

But now that the American Rescue Plan has been adopted, most enrollees should see an increase in their subsidy and a decrease in their post-subsidy premium. However, in most states this does not happen automatically. Applicants must log into their exchange / market account again to apply for additional subsidies and see their monthly premium decrease. But there is also the option of simply claiming extra money on your 2021 tax return for members who don't ditch their exchange accounts to claim additional allowances for the remainder of 2021.

Changes made in 2018 continue to apply

In April 2017, HHS finalized a market stabilization rule that introduced several changes for people buying custom market coverage both on and off the exchange. These changes continue until 2021:

  • In most states, open enrollment lasts just over six weeks, from November 1 to December 15, and all plans go into effect on January 1 of the following year. State exchanges that have their own registration platforms (currently there are 15 of them). ) have the option to renew their open enrollment, and most have done so during the 2021 health plan enrollment period.
  • If your policy has been canceled due to non-payment of premiums in the last 12 months and you plan to re-register with the same insurer (or another insurer owned by the same parent company) during open enrollment, the special enrollment period o COVID enrollment window / ARP, the insurer may require you to pay back premiums before starting new coverage. Typically this should only be one month behind in premiums , as premiums are not charged after the plan ends.
  • The allowable range of actuarial values for each level of metal plating in individual and small group markets has expanded since 2018. Bronze plans can range from -4 / + 5 (including extended Bronze plans at the higher end of that range), while Silver, Gold and Platinum plans can have a -4 / + 2 range. The actuarial value of Bronze plans is around 60%, silver – around 70%, gold – around 80% and platinum – about 90%. But they can vary based on the minimum acceptable ranges, which have expanded since 2018. Individuals and small businesses should carefully compare the various options available at each metal tier.

Changes to benefits and coverage in the individual and small group market apply to 2021 in the same way as in previous years, with adjustments to deductibles and out-of-pocket limits, provider networks and lists of covered drugs . And there are new insurers offering swap plans in many states by 2021. All of these yearly shocks make it especially important for members to actively compare available plans as long as they have the option to sign up (open signup, special signup period, or COVID / ARP signup window) and choose the one that offers the best value instead. to do it automatically. renewal.

Short-term plans are still available in most states.

In 2018, the Trump administration made changes to the rules applicable to short-term health insurance plans with a limited duration (STLDI). The changes make the plans more affordable as a replacement for ACA-compliant conventional individual commercial health insurance. But buyers should be careful: the lower prices applicable to short-term plans are the result of less reliable coverage – you get what you pay for.

Since the new federal rules serve as minimum standards and states can set stricter rules, the rules now vary considerably from state to state. There are 11 states with no short-term plans and many other states with short-term plans, but they must adhere to stricter rules than those imposed by the Trump administration.

In Idaho, "Enhanced Short-Term Plans" debuted for 2020 and continue to operate in 2021. These plans are much more reliable than traditional short-term plans and can be seen as a compromise between short-term coverage and coverage that complies. with the ACA law.

Large group, Medicare and Medicaid

Much of the debate on health care reform in recent years has focused on the individual market, the small group market, and the expansion of Medicaid under the ACA (representing more than 15 million people, but still only a small fraction of the total). Medicaid population.) ). For people who get insurance from major employers, Medicare or Medicaid (combined, this is the majority of the population), The changes for 2021 were generally the same as for each year.

In recent years , Medicaid work requirements have gained traction in GOP-led states. But they are currently on hold after a federal judge struck them down in three states and the COVID-19 pandemic led to federal changes that prohibit states from ending Medicaid coverage during a public health emergency (this is true if the state receives expanded federal funding for Medicaid to address the pandemic, and all states receive this additional funding). And the Biden administration has told states that they are reviewing already approved Medicaid work requirements (and beginning a process to reverse those exemptions) and will not approve those that have not yet been reviewed.

Open enrollment for Medicare Advantage and Medicare Part D ran from October 15 to December 7, with all changes effective January 1, 2021 (this is the same program that has been used for several years) . The Medicare Advantage Open Enrollment Period was extended from January 1 to March 31, giving Medicare Advantage members the option to upgrade to another Advantage plan or Original Medicare.

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