Health Issues

If you’ve received notification that you’re losing Medicaid eligibility, you’re certainly not alone. Millions of Americans will get similar notices in 2023 and 2024, now that states are once again disenrolling people from Medicaid after not doing so between March 2020 and March 2023.

(If you need help to understand why you lost Medicaid, how to avoid loss of coverage or appeal lost coverage, please visit our article explaining Medicaid redeterminations.)

But that doesn’t make it any easier to find out your health coverage is ending. You’re still left with a big question: What to do now that you’ve been declared ineligible for Medicaid and dropped from the program? Let’s take a look.

Louise Norris is an independent individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

Enrollment in ACA marketplace plans has surged, thanks to expanded eligibility for ACA marketplace subsidies. Leading that surge: buyers with higher incomes.

After the American Rescue Plan (ARP) expanded eligibility for premium subsidies in the ACA marketplace in 2021, enrollment in 2022 plans increased by 21%. Enrollment in 2023 plans is on pace to grow by another 13%, to about 16.4 million by the time the open enrollment period ends in all states. Plainly, Americans who lack access to affordable employer-sponsored health plans, Medicaid, or Medicare are recognizing that the ARP made health plans in the ACA marketplace far more affordable.

The ARP increased premium subsidies in the ACA marketplace at every income level and removed the income cap on subsidy eligibility, which had been 400% of the Federal Poverty Level (FPL) since the ACA marketplace launched in 2014. In 2023, 400% FPL is $54,360 for an individual and $111,000 for a family of four. Enrollees with income above that level used to pay the full premium without subsidy. Now they receive premium subsidies if the unsubsidized benchmark Silver plan premium would cost them more than 8.5% of annual family income.

The table below shows the enrollment increase at each income level for 2022 plans in the 33 states that use HealthCare.gov, the federally run exchange. While enrollment in 2022 coverage rose by double-digit margins at all reported income levels, the growth rate increased with income and was highest at incomes over 400% FPL – i.e. among those formerly ineligible for subsidies. (Information about 2023 enrollees’ income is not yet available.)

A note on one data limitation: the chart combines enrollment by those with incomes below 100% FPL and above 400% FPL because that’s the way CMS reported income in 2021, when enrollees with incomes over 400% FPL were not eligible for subsidies. In 2022, 146,297 enrollees in HealthCare.gov states had income below 100% FPL, while 655,944 reported income above 400% FPL – so likely almost all of the increase in that combined category is attributable to enrollees with incomes above 400% FPL.

An obvious surge in enrollment at income levels over 400% FPL

In 2022, the first year in which there was no income cap on subsidies, enrollment at incomes above 400% FPL more than doubled. When you look at premiums with and without subsidies for enrollees of different ages, as shown below, it’s not hard to see why.

Coverage is much more affordable at incomes above 400% FPL than it was prior to 2022 – far more so than many people who looked at marketplace offerings before they became subsidy eligible probably recognize.  Note also that the number of enrollees who did not report income plummeted. That’s doubtless because the ARP dramatically reduced the number of enrollees who earn too much to obtain a subsidy.

Source: 2022 Marketplace Open Enrollment Public Use Files / CMS.gov

The enrollment surge, illustrated

Let’s take a closer look at one of the ACA’s hottest markets: Houston, Texas. Enrollment in 2022 coverage in Texas increased by 42%, and enrollment in 2023 plans is on pace to increase another 32%. The chart below shows what premiums now look like for couples of different ages with an annual income of $74,000 – slightly above the 400% FPL threshold – compared to what those couples would pay if they were ineligible for subsidies, as they would have been in years before 2022.

The source for all premiums quoted below is the “See plans and prices” tool on HealthCare.gov.

Impact of the American Rescue Plan on ACA premium subsidies

Monthly premiums paid with and without ARP subsidy increases: Houston, TX in 2023

Notice that the premiums that the older couple will pay (after subsidy) for Bronze and Gold plans are much lower than those paid by the 40-year-olds. That’s because premiums before subsidies are credited rise with age: At age 64, they are three times the premium for a 21-year-old and more than twice the premium for a 40-year-old.

But subsidies are structured so that everyone with the same income pays the same amount for the benchmark Silver plan: An enrollee with income at >400% of FPL receives a subsidy in a fixed amount that enables the enrollee to pay not more than 8.5% of their income for the benchmark, regardless of age. So the subsidy for the older couple is bigger than for the younger couple.

When the subsidy gets bigger, it covers a larger share of the premium for plans that cost less than the benchmark plan. Since the “spread” between the benchmark plan’s premium and the premiums for cheaper plans (one Silver and many Bronze plans) increases in proportion to the age of enrollees, older enrollees get bigger savings on cheaper plans.

Louise Norris has more on how the ARP has decreased premiums for older enrollees. For eligible higher income and older enrollees, the ARP subsidy boosts are not just an “8.5% solution.” Coverage, including sometimes Gold coverage, is often available for much less.

What do the lowest-cost Bronze, Silver and Gold plans shown above look like? Below are some key features. Note that in ACA marketplace plans, select features may not be subject to the deductible, meaning you don’t have to pay full price before you meet your deductible (i.e. a service may be free or you may pay only a co-pay).

• The lowest-cost Bronze plan in this market from Blue Cross Blue Shield of Texas, has a deductible of $7,400, and an annual out-of-pocket maximum of $9,100 (the highest allowable by law). Primary care doctor visits are free regardless of whether the plan’s deductible has been met, and generic drug prescriptions are $5, also before the deductible.
• The lowest-cost Silver plan, from Ambetter, has a $5,800 deductible and an $8,900 out-of-pocket max. Primary care visits are $40 and generic drug prescriptions are $20, both before the deductible, and other services (urgent care, specialist visits) are also not subject to the deductible.
• The lowest-cost Gold plan, from Blue Cross Blue Shield, has a deductible of $1,100, an out-of-pocket max of $9,100. Primary care doctor visits are free and generic drug prescriptions of $5, neither subject to the deductible.

Bargains are Gold-plated in Texas and a handful of other states

The tables also show an extra benefit in the Texas marketplace. In 2022, the Texas legislature unanimously passed a law, signed by Gov. Greg Abbott, instructing the Department of Insurance to issue regulations that would ensure that insurers price Gold plans lower than Silver plans. How can that be?

Well, most marketplace enrollees have incomes below 200% FPL, and below that threshold, Cost Sharing Reduction (CSR) subsidies give Silver plans lower out-of-pocket costs than Gold plans. In Texas in 2022, 88% of Silver plan enrollees had income below 200% FPL. So, setting Gold plan premiums below Silver premiums is a major benefit to enrollees with incomes above 200% FPL, for whom Gold plans have lower out-of-pocket costs than Silver.

At least six states have taken measures to have Gold plans consistently priced below or on a rough par with Silver, and in other states and regions, insurers have done so on their own. This post by Charles Gaba spotlights states and counties in which the economic upsides for Gold plans are most extreme.

Pricing CSR directly into Silver plan premiums is a practice known as “silver loading,” which began in 2018 after the federal government stopped paying insurers separately for the value of CSR. Silver loading creates discounts in Bronze as well as Gold plans – often wiping out the Bronze premium entirely, as the chart above illustrates in the case of the 63-year-olds. Insurers in all states except Mississippi and Indiana practice Silver loading to some degree.

When premiums go high, so does subsidy eligibility

At an income of $150,000 per year for a couple of 40-year-olds – more than 800% FPL for a two-person household –  the unsubsidized benchmark Silver plan in Houston costs less than 8.5% of income. The premium would be the same if the ARP were not in effect.

For two 60-somethings, however, the benchmark premium rises so high that it’s more than 8.5% of income even for a couple earning $150,000.  Subsidies therefore kick in even at this high income.

Those prohibitively high unsubsidized premiums may seem like an extreme case, but they’re not unusual for older enrollees. Providing affordable insurance to people who retire or are laid off before they’re eligible for Medicare is a major function of the ACA marketplace. In 2022, 28% of all enrollees were aged 55-64.

The ARP of course made plans significantly more affordable at every income bracket below 400% FPL as well.  Examples of how the subsidy increases affect enrollees at various income levels are laid out in this post.

The American Rescue Plan was originally designed as COVID-19 relief, and the subsidy increases in the ACA marketplace were only granted through 2022. The Inflation Reduction Act, enacted in August 2022, extended the increased subsidies through 2025. Beyond that point, their future is uncertain, though they have plainly helped to reduce the uninsured population nationwide.

At least through 2025, if you need to find insurance in the individual market and have not yet examined your options, you’re likely to be pleasantly surprised – particularly if you were jolted by unsubsidized premiums in the past and now find yourself eligible for subsidized coverage.

Andrew Sprung is a freelance writer who blogs about health care policy and ACA implementation at xpostfactoid and at healthinsurance.org. His articles have appeared in publications including Health Affairs, The American Prospect, USA Today, The New York Times, The Incidental Economist, Mother Jones, The Atlantic and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Health Care Digital Media Award and holds a Ph.D. in English literature from the University of Rochester.

In case you missed it during a frenzied election season, the annual open enrollment period for ACA marketplace plans (which are  ACA-compliant health coverage) in 2023 kicked off on November 1. You may also have missed that last year, the American Rescue Plan Act made coverage in private plans sold in the ACA marketplace far more affordable than it used to be, and that the improved premium subsidies will continue at least through 2025, thanks to the Inflation Reduction Act passed in August 2022.

If you’re a citizen or legally present noncitizen, are under 65, can’t get health coverage through your employer or your spouse’s employer, and are not on disability Medicare, you really should check out what’s available to you in the ACA exchanges. HealthCare.gov, the federal exchange that serves 33 states, reports that four out of five people who enroll can find a plan for $10 per month or less (though many will choose a plan that costs more).

While you may be pleasantly surprised by what the ACA exchanges have to offer, it’s best not to be too surprised. That is, it’s important to go in with some awareness of what you’re likely to get at different income levels.

The most basic rule is, the higher your income, the more you’ll pay for coverage, ranging from zero in the lowest income brackets (for Medicaid or free private-plan coverage) to 8.5% of household income for a benchmark Silver plan if your income is well above average.

Before you shop, it’s good to absorb two rules of the road:

1. Small differences in projected income can have a large impact on available benefits.
2. The income you report is an estimate for the coming year – and so for many people, there’s some built-in wiggle room.

The poet Robert Frost said that writing poetry without rhyming was like playing tennis without a net. Applying for ACA coverage without knowing the income levels at which benefits change is like playing tennis without any lines. And when you don’t see the lines, it’s easy to hit the ball out.

In the ACA application, your estimate of your gross (before-tax) household income for the coming year will place you in one of several income brackets, defined as a percentage of the federal poverty level (FPL). (The ACA application slightly modifies the “Adjusted Gross Income” you see on your annual tax form.) How much you’ll pay – and in some cases, the kind of coverage available to you – depends on what bracket you’re in. Let’s look at some key “break points” where benefits shift.

100% FPL – the minimum income required to qualify for private plan coverage in 11 states

• $13,590 per year for a single person
• $18,310 for a two-person household,
• $23,030 for a family of three
• $27,750 for a family of four

It’s a cruel reality that in 11 states* – Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, and Wyoming – most adults who estimate household income below the 100% FPL threshold get no help from the government in obtaining health coverage.

As first drafted, the ACA made Medicaid available to most adults with an income below 138% FPL. In 2012, however, the Supreme Court ruled that the federal government couldn’t force states to expand Medicaid eligibility in that way. The states listed above have refused to date to go along, and in those states, most adults with incomes below 100% FPL get no help paying for any kind of coverage. (In the November election, South Dakota voted by referendum to adopt the expansion, and Medicaid enrollment under the ACA eligibility rules will begin there in July 2024.)

In a drafting inconsistency that turned out to be lucky, the ACA pegged the minimum income for subsidy eligibility in the marketplace at 100% FPL rather than 138% FPL. So, in states that have not expanded Medicaid, having an income of at least 100% FPL moves you out of the “no help” territory.

As discussed in more detail below, a low income is often an uncertain income, and applicants in the “nonexpansion” states with income likely to be anywhere near the 100% FPL threshold should leave no stone unturned to get a good-faith estimate of next year’s income over the eligibility threshold. Knowing the threshold is the key first step – especially since marketplace coverage with low out-of-pocket costs is available for free to applicants with income in the 100-150% FPL range.

138% FPL – the upper income threshold for Medicaid in most states

• $1,563 per month for a single person
• $2,106 for a two-person household
• $2,648 for a family of three
• $3,191 for a family of four

In the 38 states** that have enacted the ACA’s Medicaid expansion, most citizens and legally present noncitizens*** with income below 138% FPL qualify for Medicaid. That makes them ineligible for marketplace coverage.

Medicaid eligibility is determined on a monthly basis, which means (in expansion states) that if your income drops suddenly – after a job loss, for example – and isn’t likely to recover soon, you become eligible.

For most people near this income level, Medicaid is a good option, as there’s almost never a premium (a few states charge a small one at the top of the income bracket) and out-of-pocket costs range from zero to minimal.

Some people with income near the Medicaid eligibility threshold may prefer marketplace coverage, however – which, in some markets at least, allows for a wider choice of doctors and hospitals. While out-of-pocket costs are higher in the marketplace’s private plans than in Medicaid, they are comparatively low in Silver plans at low incomes, thanks to a secondary subsidy called cost sharing reduction (CSR) that attaches to Silver plans for lower income enrollees (more on CSR below). And the two cheapest Silver plans in each region are free to enrollees with income up to 150% FPL.

Since marketplace eligibility and subsidy level is calculated on an annual income basis, an applicant who’s suffered a sudden loss of income may qualify for Medicaid by citing current monthly income – or for marketplace coverage by estimating annual income. The HealthCare.gov application enables the latter when current monthly income is low (or high), providing a section in which you can estimate total annual income and/or a total for the coming year that may be different from income in the current year.

There is one particular case in which an applicant might want to stay out of Medicaid. In more than 20 expansion states, any Medicaid enrollee who is over age 55 is potentially subject to Medicaid Estate Recovery upon their death. If the deceased enrollee owns any significant assets, the state may seek to recover from their estate the value of the services that Medicaid covered, or, if the state contracted with a Medicaid managed care organization, all of the money that the state paid to that organization to administer the person’s coverage.

Once again, knowledge of a key income threshold may in some cases give cause to steer toward one side or the other of it.

200% FPL – the maximum income at which strong Cost Sharing Reduction (CSR) enriches benefits.

• $27,180 per year for a single person
• $36,620 for a family of two
• $46,060 for a family of three
• $55,500 for a family of four

(Note that these income limits are applicable for 2023 coverage; they rise annually.) At incomes up to 200% FPL, cost sharing reduction – which attaches only to Silver plans – raises the value of a Silver plan to a roughly Platinum level (a bit above Platinum at income up to 150% FPL, a bit below at 150-200% FPL). Above the 200% FPL threshold, the value of CSR drops off sharply, and it’s not available at all at incomes above 250% FPL.

At incomes below 200% FPL, CSR makes a big difference in the out-of-pocket costs you’re exposed to. In 2022, deductibles in CSR-enhanced plans average just $146 for people with income up to 150% FPL, and $756 for those with incomes in the 150-200% FPL range. That’s well below the average deductible for Gold plans ($1,600) and in a different universe from Bronze plans ($7,051).

Perhaps more to the point for our “know your thresholds” mantra, Silver plan deductibles take a major jump at the 200% FPL threshold, to an average of $3,215 for enrollees with income in the 200-250% FPL range.

Equally important is the annual cap on maximum out-of-pocket (MOOP) costs that attaches to plans at different metal levels – and, for Silver plans, at different income levels. Up to 200% FPL, the highest allowable MOOP for Silver plans in 2023 is $3,000. In 2022, MOOP in Silver plans averages $1,208 at incomes up to 150% FPL and $2,591 in the 150-200% FPL range. Again, there’s a big jump at the 200% FPL threshold, to an average of $6,436 at the weakest CSR level.

The median MOOP in 2022 for Gold plans is $7,500, according to the Commonwealth Fund, and $8,500 for Silver with no CSR (close to this year’s maximum allowable, $8,700). Bronze MOOP is comparable to Silver.

Bottom line: Affordable marketplace coverage is far more comprehensive for a single person estimating an income of $27,000 per year – a little under 200% FPL – than for the same person estimating an income of $28,000. The strong CSR available at incomes up to 200% FPL is really valuable.

During the ACA’s annual open enrollment period (Nov. 1 – Jan. 15 in HealthCare.gov states), benefits for the coming year are based on an estimate of future gross (pre-tax) income, modified in some cases by deductions. Those who qualify for a special enrollment period outside of open enrollment also estimate their income for the year in progress.

The estimate may be straightforward adults with one stable job and a fixed salary. For others, including most low-income people, the estimate may involve considerable uncertainty – and therefore allow for wiggle room. That’s the case if you’re paid by the hour, and/or rely in large part on tips, or work more than one job, or are partly or wholly self-employed.

If you underestimate your income and take your full subsidy, in the form of an advance premium tax credit (APTC) used to pay your premiums as they are billed (you can opt to take only a portion of it in advance for this purpose), you will owe the difference between the APTC you received and the APTC to which you prove to have been entitled at tax time in the year following (early 2024 for 2023 coverage). CSR will not be clawed back after the fact. The exchange may reduce your APTC and CSR going forward, however, if outside data sources – such as a regular paycheck – indicate that your income is higher than estimated.

What if you’re hovering near the 100% FPL threshold in a nonexpansion state, or near the 138% FPL threshold in an expansion state and you don’t want Medicaid? There is no downside to a good-faith estimate that errs on the optimistic side. If you live alone and estimate your 2023 gross income at $14,000 (a little over 100% FPL), and eventually, your tax return shows it to have been, say, $12,000, your subsidies will not be clawed back (unless the estimate is made with “intentional or reckless disregard for the facts”).

And while you may be asked as part of the application process to document your income, your estimate will not be disallowed if outside data sources indicate that your real income is lower than estimated. See this post for more tips on making sure that you’re fully accounting for all allowable income sources.

Your income estimate must be made in good faith. But if you have good cause to be genuinely uncertain how much you earn, you are fully within your rights to use your knowledge of the ACA’s income break points to your advantage.

* * *

* One nonexpansion state – Wisconsin – offers Medicaid to adults with income up to 100% FPL, as opposed to the 138% FPL threshold in expansion states. Wisconsin therefore has no “coverage gap” – those who lack affordable access to other insurance are eligible either for Medicaid (up to 100% FPL) or subsidized marketplace coverage (over 100% FPL).

** Alaska and Hawaii have different FPLs, viewable on pages 3-6 here.

*** Washington, D.C. extends Medicaid eligibility to 215% FPL. New York and Minnesota run Basic Health Programs – Medicaid-like low-cost programs – for residents with income in the 138-200% FPL range, as well as for legally present noncitizens who are time-barred from Medicaid eligibility. Connecticut extends Medicaid eligibility to parents with incomes up to 160% FPL.

**** Legally present noncitizens who have been in the U.S. for less than five years are ineligible for Medicaid, but eligible for free Silver marketplace coverage if their income is in the 0-150% FPL range.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

The tenth annual open enrollment for ACA-compliant individual/family health coverage is just around the corner. It starts November 1, and will continue through January 15 in most states.

Millions of Americans will enroll or renew their coverage for 2023 during open enrollment. Some have been buying their own health insurance for years, while others are fairly new to the process. And some are currently uninsured or have been covered by plans that aren’t ACA-compliant – such asa  healthcare sharing ministry plan or short-term health insurance.

This article will give you an overview of what to expect during the open enrollment period. For even more information about open enrollment, check out our comprehensive guide to open enrollment.

ACA open enrollment will look mostly familiar this fall

In general, this year’s open enrollment period will be fairly similar to last year’s, but with some changes that we’ll address in more detail below:

• Each state will continue to use the same exchange/marketplace platform it used last fall (HealthCare.gov in 33 states, and a state-run platform in DC and the other 17 states). And most states will continue to use the same enrollment schedule they used last year.
• The Inflation Reduction Act has extended the American Rescue Plan’s subsidy enhancements through 2025, so the subsidy rules that were in effect for 2022 will continue to be in effect for 2023. (There’s no “subsidy cliff” and the percentage of income that you have to pay for the benchmark plan is lower than it used to be.)
• Because the subsidy enhancements have been extended, the record-high enrollment we saw this year is likely to continue, and the improved affordability that the American Rescue Plan created will also continue. But that doesn’t mean your premium will stay the same — more on this below.
• Brokers and Navigators will continue to provide assistance with enrollment. And Navigator funding is higher than ever before, in an effort to increase outreach and enrollment assistance.
• The insurers offering health plans through the exchanges (and outside the exchanges) will generally be the same insurers that offered plans for 2022. But there are several insurers joining the exchange or expanding their coverage area for 2023, and some insurers that are shrinking their coverage areas.
• The IRS has proposed a fix for the “family glitch” which will make some families newly eligible for premium subsidies in the marketplace.

Open enrollment dates and deadlines for 2023 plans

By now, most people are accustomed to the fact that individual/family health coverage is no longer available for purchase year-round, and instead uses open enrollment and special enrollment periods, similar to those used for employer-sponsored plans. The same open enrollment schedules apply to plans purchased through the exchange/marketplace and to plans purchased from insurance companies through private channels (ie, “off-exchange”).

Open enrollment begins November 1, and in nearly every state, it will continue through at least January 15. (Note that Idaho is an exception: Open enrollment in Idaho starts and ends earlier, running from October 15 to December 15. Idaho is the only state where open enrollment for 2023 coverage will end before the start of the year.)

So in most states, the enrollment schedule will follow the same timeframe that was used last year. And in most states, you’ll need to enroll by December 15 in order to have your coverage take effect on January 1. Enrolling after December 15 will generally result in a February 1 effective date.

One caveat to keep in mind: If your current health plan is terminating at the end of 2022 and not available for renewal, you can select a new plan as late as December 31 and still have it take effect January 1.

Although open enrollment continues through at least mid-January in most states, it’s generally in your best interest to finalize your plan selection in time to have the coverage in force on January 1. We’ve explained this in much more detail here.

In most states, that means you’ll need to enroll or make a plan change by December 15. In terms of the effective date of your coverage, there’s no difference between enrolling on November 1 versus December 15. But waiting until the last minute might feel a bit more stressful, and you might have trouble finding an enrollment assister who can help you at that point. You don’t need to be the first person in line, but it’s good to give yourself a bit of wiggle room in case you run into glitches with the enrollment process or find that you’d like assistance with some or all of it.

Rest assured, however, that open enrollment continues until at least mid-January in most states. So if there’s no way for you to get signed up in the earlier part of the enrollment window, you can most likely complete the process after the start of the year and have coverage in effect as of February.

As is always the case, there will be some fluctuation in terms of which insurers offer individual/family health coverage for 2023. For the last several years, the general trend has been toward increased insurer participation in the exchanges. Here’s more about what we saw in 2020, 2021, and 2022.)

That trend is continuing in 2023, with new insurers joining (or rejoining) the exchanges in many states. But there are also some insurer exits that existing enrollees need to be aware of.

Several insurers are joining exchanges in the following states for 2023:

But there are also some insurers exiting the marketplaces in several states, including:

And even in states where the participating 2023 insurers will be the same ones that offered coverage in 2022, there may be service area changes in some states. This could result in an insurer’s plans becoming newly available in some areas, or no longer available in some areas.

Last year, we detailed the things that people need to keep in mind if a new insurer is joining the exchange. All of those points are still applicable for people in areas where new insurers will offer plans in 2023.

The main takeaway point is that it’s important to actively compare your available plan options, as opposed to just letting your existing plan auto-renew. One of the new plans (or another existing plan) might end up being a better fit for your needs. But it’s also possible that the benchmark plan’s pricing could change significantly, affecting the amount of your subsidy. If the price of your current plan shoots up, a comparable plan will likely be available for about what you paid this year (if your income and family size haven’t changed).

It’s also worth keeping in mind that the insurer’s estimate of what you’re likely to pay in the coming year, provided in a letter this fall, may be inaccurate – again, because of a shift in its pricing relationship to this year’s benchmark plan. You’ll get a separate letter from the exchange with details about your subsidy amount for 2023 and the amount you’ll pay if you let your current plan renew. But it’s also essential to log onto the exchange, update your information, and learn what your current plan and alternative plans will cost in 2023.

The ‘family glitch’ fix will help some buyers

Ever since ACA-compliant plans debuted in the fall of 2013, people have been ineligible for subsidies if they’re eligible for an employer-sponsored health plan that’s considered affordable. And the affordability determination has always been based on the cost of employee-only coverage, without taking into account the cost to add family members to the plan. But if the employer-sponsored plan was deemed affordable, the entire family was ineligible for subsidies in the marketplace, as long as they were eligible to be added to the employer’s plan. This is known as the “family glitch,” and it has put affordable health coverage out of reach for millions of Americans over the years.

Earlier this year, the IRS proposed a long-awaited fix for the family glitch, which is expected to be in place by the time open enrollment gets underway. Under the proposed rule change, the marketplace will do two separate affordability determinations when a family has access to an employer’s plan: one for the employee, and one for total family coverage. If the employee’s coverage is considered affordable but the family’s is not, the rest of the family will potentially be eligible for subsidies in the marketplace.

Some families will still find that they prefer to use the employer’s plan, despite the cost. But some will find that it’s beneficial to put some or all of the family members on a marketplace plan, even while the employee continues to have employer-sponsored coverage.

The main point to keep in mind here is that it’s important to double check your marketplace options this fall – even if you looked in the past and weren’t eligible for subsidies due to an offer of employer-sponsored coverage.

• Across most of the states, the preliminary average rate change for 2023 amounts to a 7.7% increase, according to ACA Signups. Final rates aren’t yet available in many states, but we’re generally seeing final rates that tend to be a bit lower than the insurers proposed. (This is partly due to the Inflation Reduction Act — which was enacted after insurers filed their rates and which will result in slightly smaller-than-proposed rate increases for some plans — and partly due to state regulators’ actions to reduce rates during the review process).
• That’s a little larger than the overall average rate increases we’ve seen for the last few years (3.5% for 2022, less than 1% for 2021, and a slight decrease for 2020). But an overall average rate change only gives us a big picture; it doesn’t tell you how much your own plan’s premium will change or how much your net premium will change, and it also doesn’t account for the new plans that will be offered for 2023.
• If the benchmark (second-lowest-cost Silver plan) premium in your area goes up, subsidy amounts will also go up. Conversely, if the benchmark premium goes down, subsidy amounts will also go down. This is independent of what your own plan’s price does. It can be possible, for example, for your plan’s premium to go up while the benchmark premium goes down (perhaps because a new insurer takes over the benchmark spot), resulting in a more significant increase in the actual amount you pay each month. This is why it’s so important to pay close attention to the information you receive from your insurer and the exchange, and to carefully consider all of your options during open enrollment.

As open enrollment draws closer, we’ll continue to update our open enrollment guide and our overview of each state’s marketplace.

And if you’re currently uninsured or enrolled in non-ACA-compliant coverage, you’ll definitely want to look at the plan options that are available to you during open enrollment, and check your eligibility for subsidies. You might be surprised to see how affordable your coverage can be. The average enrollee is paying $133/month this year, and more than a quarter of enrollees are paying less than $10/month. Although specific plan prices change from one year to the next, this same overall level of affordability will continue in 2023.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

After months of stalled development, laws that would extend the American Rescue Plan’s overall health insurance coverage subsidy enhancements is again on the desk in the U.S. Senate. That is excellent information for the 13 million Us citizens who are suitable for premium tax credits (subsidies) that offset the price tag of marketplace (exchange) well being insurance plan.

The Inflation Reduction Act was announced in late July, and a vote in the Senate is anticipated next week. The legislation – which is both equally a weather and healthcare monthly bill – addresses numerous urgent priorities, including a a few-calendar year extension of the subsidy enhancements shipped by the American Rescue Approach.

Entire-selling price premiums will however adjust in 2023 throughout additional than 50 percent the states so considerably, the general proposed regular rate boost is about 8% – substantially of which is not associated to whether the ARP subsidies are prolonged. But most enrollees do not spend entire value. In 2022, about 89% of market enrollees receive premium subsidies. HHS estimates that 3 million men and women will get rid of their coverage completely – even though 10 million will see their subsidies decline or disappear – if the ARP subsidies are not extended below the Inflation Reduction Act.

To be obvious, even if the Inflation Reduction Act is enacted, there will be fluctuations in subsidy quantities and just after-subsidy premiums for renewing options. This comes about every year, depending on how significantly the benchmark quality improvements (preserving in mind that the benchmark system can be a unique system from a person year to the up coming) and how considerably the value of a specific approach modifications.

But with the Inflation Reduction Act, in general affordability will stay the identical as it is this yr, as the benchmark prepare would continue on to expense the exact percentage of money that individuals fork out this year. (We do have to keep in head that the benchmark program can be a distinctive program from a single 12 months to the up coming, new ideas may well be offered for the coming year, and fees for other plans relative to the benchmark plan can also adjust.)

Without the need of the Inflation Reduction Act, coverage would become a great deal considerably less cost-effective in 2023. HHS calculations exhibit that if the ARP subsidy enhancements hadn’t been in impact this yr, the premiums that enrollees paid out by themselves – just after subsidies have been used – would have been 53% bigger in the 33 states that use Healthcare.gov. That’s the sort of scenario that hundreds of thousands of marketplace enrollees would see in 2023 without the need of the Inflation Reduction Act.

But this normally differs from a person location to another depending on factors this kind of as new insurers moving into a sector, or point out reinsurance packages that deliver down total-cost costs and consequence in reduce subsidies. Even with the Inflation Reduction Act in location, that sort of subsidy and high quality fluctuation will however happen in some areas and for some strategies.

If the Inflation Reduction Act does not go, web rates will increase sharply for most present-day enrollees when their protection renews for 2023. Some enrollees will need to switch to lessen-price tag options in get to keep their rates affordable.

Irrespective of regardless of whether the ARP subsidy enhancements continue into 2023 or expire at the stop of 2022, it will be essential to diligently consider all alternatives throughout open enrollment. There will be shifting insurer participation in some spots, changing rates, and new program models.

People who purchase their personal wellness coverage will need to have to consider all of the out there designs and pick out the a person that finest fits their needs and budget. That could or may possibly not be the same prepare they had this calendar year, regardless of what happens with the ARP subsidy enhancements.

Louise Norris is an specific well being insurance policies broker who has been crafting about wellness insurance plan and health and fitness reform given that 2006. She has prepared dozens of viewpoints and academic parts about the Inexpensive Treatment Act for healthinsurance.org. Her point out health trade updates are consistently cited by media who go over health and fitness reform and by other health and fitness coverage authorities.

For many of the 155 million Americans who get their health insurance through an employer, the employer-sponsored plan feels like a security blanket. Look closely, as circumstances may well force you to, and the blanket may be full of holes. Tales of woe from patients who need intense care are plentiful – involving prior authorization hurdles, outright coverage denials for needed care or drugs, and until recently, surprise bills from out-of-network doctors or providers at in-network facilities (Congress at last banned most such billing in the No Surprises Act, effective January 1 of this year). High and rising deductibles, out-of-pocket maximums, and premiums also cause financial hardship for millions of mostly low-income workers.

Still, for the majority of employer plan enrollees whose plans cover about 85% of medical costs while the employer foots the lion’s share of the premium, the health insurance they have is not much of a worry. And people fear losing it.

That was my situation until this spring. While I am self-employed, my wife Cindy has worked at the same hospital for 25 years, which has provided family insurance. In that time we’ve been blessed with pretty good health, and when we’ve needed care, we’ve obtained it without significant hassle, including an operation to remove half my thyroid back in 2004.

Over the years our share of the premium crept up slowly, then jumped from about $200 a month to about $400 in 2016 when Cindy cut back her weekly work hours from 36 to 30 so she could help take care of her 90-something father. It’s now at about $450/month, which is manageable.

Into an ACA marketplace enhanced by the American Rescue Plan

But change comes. Cindy is retiring this month, a little shy of her 64th birthday. The Affordable Care Act was supposed to make this feasible – and since March of last year, when the American Rescue Plan provided a major boost to premium subsidies in the ACA’s health insurance marketplace, the ACA has a far more credible claim than previously to reducing “job lock.”

The ARP subsidy boosts only extend through 2022. Democrats in Congress have intended to extend them further, but with their Build Back Better legislation long stalled, extension now is far from certain.

The ARP reduced the percentage of income required to buy a benchmark Silver plan (the second cheapest Silver plan in each area) at every income level, and it removed the notorious income cap on subsidies. Before the ARP’s enactment in March 2021, people whose family income exceeded 400% of the Federal Poverty Level – currently $51,520 for an individual, $106,000 for a family of four – were ineligible for premium subsidies. Since premiums rise with age – -at age 64, they’re triple what a 21 year-old pays – paying full freight was especially challenging for 60-somethings like Cindy and me. At our age, unsubsidized benchmark premiums are typically $700-800 per month – each – and more in some states (that’s also about what COBRA would cost us).

Now, thanks to the ARP, for anyone at any income level who lacks affordable access to other insurance, a benchmark plan costs no more than 8.5% of income, and much less at lower incomes (in fact, benchmark coverage is free up to 150% FPL). The measure that determines premium subsidies is modified adjusted gross income or MAGI – basically the AGI familiar to tax filers, with a handful of additional income sources (e.g., tax exempt interest) counted.

Thanks to the ARP subsidy boost, with a large payment to my individual 401k reducing our MAGI, Cindy and I can get a benchmark Silver plan for about $400 per month. And unlike in many states, here in New Jersey the plans offered by the dominant marketplace insurers have decent provider networks.

What plan to buy? Comfort vs. math

Still, I am entering this individual insurance with some trepidation. Here’s why.

For years I’ve been closely observing and writing about the Affordable Care Act, on my blog, here at healthinsurance.org, and in various other publications. Brokers and other experts have drummed one salient fact into my head: For shoppers in the ACA marketplace with income over 200% FPL ($25,760 for an individual, $53,000 for a family of four), Bronze-level plans usually make the most economic sense. Bronze plans are the cheapest of four metal levels, and Bronze deductibles average over $7,000 for an individual, $14,000 for a family.

The picture is different for people with income under 200% FPL. Below that threshold, secondary cost-sharing reduction subsidies, available only with Silver plans and at no extra cost to the enrollee, reduce out-of-pocket costs to levels below those of the average employer-sponsored plans. CSR, which is strongest at the lowest incomes, reduces deductibles to an average below $150 at incomes up to 150% FPL and below $700 at an income in the 150-200% FPL. CSR weakens to near-insignificance at 200% FPL and phases out entirely at 250% FPL. While less than a third the population lives in households with income below 200% FPL, more than half of ACA marketplace enrollees do.

At higher incomes, Silver plan deductibles average more than $4,700, though in many plans a number of services, including doctor visits, are not subject to the deductible. That’s considerably lower than the Bronze average (over $7,000) – but generally not enough to justify the difference in premiums. That’s especially true because the annual out-of-pocket (OOP) maximum in Silver plans without CSR (that is, all Silver plans for people with income above 250% FPL) is generally not significantly below the Bronze plan OOP max. Both are usually north of $7,000 for an individual and often near or at the highest allowable, $8,700 per person.

Because premiums rise with age, the field tilts further toward Bronze plans for older enrollees. As the premium for a benchmark Silver plan rises, so does the subsidy, since all enrollees with the same income pay the same premium (a fixed percentage of income) for the benchmark plan. As the premium rises, so does the “spread” between the benchmark premium and cheaper plans. While my wife and I would pay $400 a month for benchmark Silver, we can get the cheapest Bronze plan on the market (from the same insurer) for about $10 per month.

Another consideration? HSAs

Still another factor points us toward that cheaper Bronze plan: it’s a so-called high deductible health plan (HDHP) that can be linked to a tax-sheltered health savings account (HSA). These plans, which are mostly Bronze-level, conform to special IRS rules. One is that they cannot exempt any services other than the free preventive screenings mandated by the ACA from the deductible ($6,000 per person in the Bronze plan we are likely to enroll in). That increases my anxiety: we’ll be paying cash for virtually all the medical care we access, unless we get ill or injured enough to hit the deductible. At the same time, HSA-linked plans, by statute, have lower out-of-pocket maximums than most Bronze or Silver plans, topping out at $7,050 per individual. That’s better than the two cheapest Silver plans, which both have OOP maxes of $8,700 per person. Finally, HSA contributions – up to $7,300 for Cindy and me – also reduce MAGI, and so the premium we will pay, as well as our taxes.

With the HSA contribution figured in (I left it out of my income estimate), the Bronze HSA plan we’ve settled on will probably ultimately be available for zero premium. The single-person maximum exposure, $7,050, is not much higher than what we pay in premiums in our employer-sponsored plans (about $5,400 annually) – or than what we’d pay for the benchmark Silver plan, which has a higher OOP max ($17,400 for two, vs. $14,100 for the HSA Bronze).

The cheapest Silver plan available would cost us about $300 per month, with a per-person deductible of $2,500. If both of us turn out to need a lot of medical care but not too much – say, $6,000 each – we could conceivably pay less on net under that plan, which pays 60% of most costs after the deductible is met, up to the OOP cap. But the odds of that are small. And again, if one of us needs tens of thousands of dollars in care – not unusual in U.S. medicine – we’ll pay less under the Bronze HDHP plan.

The chief argument against a high deductible Bronze plan is psychological, but real. Some years ago, Dr. Ashish Jha, currently the Biden administration’s COVID-19 policy coordinator, tried a personal family experiment – enrolling in a high-deductible plan – and wrote up the results. Jha suffers from supraventricular tachycardia, a condition that makes his heart race periodically. One morning, he woke up with his heart racing, and it persisted for about a half hour. He knew that going to the ER would cost him thousands; he also knew that he would advise a patient to go. Instead he rode it out, and his heart calmed down. “I was lucky — I had rolled the dice and things had worked out,” Jha writes.

Cindy and I are both 63. That’s a bad age to be loathe to go to the ER – or to hesitate to get an unfamiliar twinge somewhere in our bodies checked out. Perhaps having money sequestered in an HSA will reduce the psychological resistance – those funds are dedicated to medical fees. But it’s still real money: if we don’t spend it, we can roll it into our retirement funds when we reach Medicare age. Being willing to spend it still requires a psychological adjustment.

If a Silver plan for $300 per month were our only choice, I’d probably be reasonably content. The prospect of paying next to nothing for an HDHP Bronze plan makes me nervous. But it’s hard to escape the math.

Assessing the ACA marketplace

Two things are notable about the private plans subsidized by the ACA as enhanced by the ARP. First, for almost all comers, plans with an affordable premium are available – in fact, Bronze plans with zero premium, or close to it, are available pretty high up the income ladder, especially for older adults. Second, out-of-pocket costs are high. At incomes over 200% FPL, it’s hard to avoid out-of-pocket maximums below $7,000 for an individual and $14,000 for a couple or family.

Why are out-of-pocket costs in these subsidized plans so high? Several reasons. First, American healthcare is just expensive – we pay almost triple the OECD average per capita, while using less care per capita than the OECD average. Second, to avoid all-out opposition to health reform from the healthcare industry (and in a failed attempt to win Republican buy-in), the Democrats who created the Affordable Care Act created a marketplace of private plans, paying commercial rates to providers – which average about twice Medicare rates for hospital payments and perhaps 130-160% of Medicare for physicians. Finally, healthcare scholars advising the ACA’s drafters believed that subjecting enrollees to high out-of-pocket costs – giving them ‘skin in the game” – was an effective way to reduce unnecessary care and so control costs (an idea substantially discredited by multiple studies indicating that enrollees faced with high out-of-pocket costs skip necessary as well as unnecessary care).

My wife and I are entering what two or three decades ago might have been understood as a moderate or even mainstream Republican health insurance utopia. We are paying close to nothing in premiums, and we are massively incentivized to save a huge chunk of our income in tax-sheltered accounts to keep it that way. The federal government is kicking in $1400 a month. We are on the hook for up to $14,100 in out-of-pocket expenses. If we’re healthy and don’t come near that threshold, we’ll pay cash for every medical service we access except for free preventive screenings.

I am very glad that the ACA was enacted and that Republicans failed to repeal it in 2017. (My personal welfare aside, the ACA’s core programs saved the country from a surge in the uninsured population during the pandemic.) As Cindy and I enter our life’s final quarter (or third, if we’re actuarially lucky), I’m grateful that affordable coverage is available in the hold-your-breath-till-Medicare years that will shield us from costs that could seriously impact our long-term financial health.

I can imagine a simpler and more cost-effective system – one that pays uniform rates to healthcare providers and offers a very short menu of affordable choices with low out-of-pocket costs to all Americans. But given the health system we have, and current political realities, my personal ask is more immediate and plausible: extend the ARP subsidy boosts. They’ve given the ACA a credible claim to live up to its name.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

There are a lot of factors to consider when you’re shopping for individual health insurance coverage – from premiums to deductibles to on-exchange and off-exchange and ACA-compliant (or not). If you’re shopping in the individual health insurance market, you’ll definitely be making a choice of metal tier.

And – regardless of where you shop – you’re going to end up making a decision about a type of managed care that works best for your situation. As you’re selecting a health plan – whether it’s ACA-compliant or not – you’ll notice that the plans are labeled as either an HMO, PPO, EPO, or POS.

These acronyms stand for Health Maintenance Organization, Preferred Provider Organization, Exclusive Provider Organization, and Point of Service. They are categories of managed care, which is how virtually all modern health insurance is organized.

(The alternative is an indemnity plan, which doesn’t have a provider network. Indemnity plans are almost unheard of in today’s major medical health insurance market.)

• the number of providers from which a patient can choose,
• whether the patient has to use a primary care physician, and
• whether out-of-network care is covered under the plan.
• Some managed care plans attempt to improve health quality, by emphasizing the prevention of disease.

Indemnity plans – popular before the advent of modern managed care plans – have been largely replaced by managed care plans over the last several decades, and the vast majority of privately insured Americans are in some form of managed care plan.

Even in the Medicaid and Medicare systems, managed care is playing an increasingly large role: More than two-thirds of the Americans enrolled in Medicaid were covered under private Medicaid managed care plans as of 2019. And more than 45% of Medicare beneficiaries were enrolled in private Medicare Advantage plans as of early 2022 – a percentage that has been steadily growing over the past decade.

To a large degree, the differences involve access to providers. All HMO, PPO, EPO, and POS plans have networks of medical providers (doctors, hospitals, etc.) that have a contract with the health plan in which the carrier agrees to accept a negotiated price for the services they offer. Some plans will only pay for non-emergency care if you receive care from an in-network provider, while other plans may cover some of the bill if you see an out-of-network provider.

You’ll often see simple comparison charts that show the “rules” for the different types of managed care. In a nutshell, they’ll generally say that HMOs and POS plans require a referral from a primary care doctor in order to see a specialist, while PPOs and EPOs do not, and that PPOs and POS plans cover out-of-network care, while HMOs and EPOs do not. They will also often tend to say that HMOs have lower premiums, lower deductibles, and smaller provider networks, while PPOs have higher premiums, higher deductibles, and broader networks.

In reality, the lines tend to be more blurry, and these types of plan management have evolved over time. For example, this POS plan from Blue Cross Blue Shield of North Carolina does not require a referral to see a specialist. Neither does this HMO from Friday Health plans. And while it’s often true that employer-sponsored HMOs tend to have lower deductibles and premiums and potentially smaller networks, that does not hold true in the individual/family (self-purchased) market.

It is generally true, however, that EPO and HMO plans will not cover out-of-network care unless it’s an emergency, while PPO and POS plans will provide some out-of-network coverage. But the out-of-pocket costs for out-of-network care will typically be substantially higher than the out-of-pocket costs for in-network care. For example, that POS plan from Blue Cross Blue Shield of NC has an in-network deductible of $8,700 for a single individual, but an out-of-network deductible of $43,500. And this PPO, offered by Ambetter in Oklahoma, has an in-network deductible of $8,600, but an out-of-network deductible of $20,000.

So although PPO and POS plans do generally “cover” out-of-network care, you might find that you only get a benefit from that if your out-of-network costs are particularly high. And it’s also common to see that plans with out-of-network coverage do not put any cap on total out-of-pocket costs for out-of-network care.

(The ACA requires health plans to cap out-of-pocket costs for essential health benefits obtained from an in-network provider – the cap is $8,700 this year – but there are no limits on how high out-of-network costs can be, even if the plan provides out-of-network coverage.)

Plans with lower deductibles are certainly available, although their premium costs are generally higher. But they will still tend to have much higher out-of-network deductibles. For example, this Medica PPO has an in-network deductible of just $750. But the out-of-network deductible is $9,900, and again, there is no cap on how high out-of-pocket costs can be for care received outside the plan’s provider network.

When you’re shopping for a health insurance plan – either through the health insurance marketplace or off-exchange – there are many factors to keep in mind. (This is also true if you’re selecting from among options offered by your employer, although there are likely to be far fewer choices in that case.) We’ve covered some of them here, and also have a detailed summary of things to keep in mind when deciding which metal level is right for you.

So should the HMO, PPO, EPO, or POS designation matter when you’re selecting a plan? Maybe, but it’ll depend on the specifics of the plans that are available to you and the coverage details that are important to you.

In general, you’ll want to have a general understanding of the different types of managed care, and understand whether your choice will include any coverage for out-of-network care (that’s generally only available on PPOs and POS plans). And you’ll want to make sure you understand whether your health plan will require referrals from a primary care provider. But as described below, there are several points to keep in mind as you’re comparing plans.

Also be aware of the fact that an out-of-network provider can and will balance bill you unless it’s an emergency or an out-of-network provider working at an in-network facility. (Here’s how the No Surprises Act protects consumers from surprise balance bills in those situations).

This means that although your health plan may pay for some of the service (assuming you’ve met the out-of-network cost-sharing requirements), the provider can bill you for the portion of their charges that were above the amount the health plan paid.

2. Narrowness of networks varies

All four types of managed care plans can have broad, narrow, or mid-size provider networks. Don’t assume anything. Instead, you’ll want to actively compare the provider networks of each plan you’re considering, to see whether your specific providers are in-network.

If you don’t currently have any providers, it’s a good idea to see whether each plan you’re considering has in-network hospitals and medical offices that would be convenient if you ended up needing medical care.

3. Managed care is different in the individual market

Individual/family plans aren’t the same as employer-sponsored plans, and that includes the provider networks and managed care rules. You may have had an employer-sponsored plan offered or administered by a particular insurer, but don’t assume that individual/family plans from that insurer will have the same provider network or managed care rules (for example, whether or not a referral is required).

4. Referral requirements vary

Although you may have heard that HMOs and POS plans require a referral from a primary care physician in order to see a specialist, that’s not necessarily true. Again, you’ll need to check the specifics of the plans you’re considering. (And there are pros and cons to referral requirements. On one hand, they mean an additional office visit, which adds to your costs. But on the other hand, your PCP can help to ensure that you’re seeing the correct specialist, and can coordinate the care you receive from multiple specialists.)

Referrals are sometimes confused with prior authorizations (pre-authorizations), but those are two different concepts. A referral comes from a primary care physician, whereas prior authorization has to be obtained from the health plan itself. Health plans can set their own rules in terms of which services require prior authorization. All four types of managed care plans — HMOs, PPOs, EPOs, and POS plans — can and do require prior authorization for various services. But there’s a lot of variation from one plan to another in terms of what services need prior authorization.

So it’s important to understand your plan’s rules, and to ensure that your doctor has your health plan information so that they can submit prior authorization requests on your behalf. And if in doubt, it’s best to contact your health plan before a particular service is scheduled, to make sure you know whether prior authorization is necessary, and if so, whether it has been granted.

If you’ve read this far, you may be wondering why a health savings account (HSA) isn’t listed here. It’s common to see comparison charts that include PPO, EPO, HMO, POS, and HSA (Health Savings Account). That leads many consumers to assume that the HSA acronym is a form of managed care – but it’s not.

HSA-qualified high-deductible health plans (HDHPs) allow enrollees to contribute pre-tax money to an HSA (you cannot contribute to an HSA unless you have active coverage under an HDHP). And HDHPs must conform to specific IRS rules. The IRS sets minimum deductibles and maximum out-of-pocket limits (which are lower than the maximum out-of-pocket limits that HHS sets for other plans), and limits the services that the plan can pay for before the deductible is met.

However, HDHPs can be PPOs, EPOs, HMOs, or POS plans. So this is an “and” scenario, rather than an “or” scenario. An HDHP will also be either a PPO, HMO, EPO, or POS plan.

The HDHP designation means that the plan conforms to the IRS rules for HSA-qualified plans. And the HMO, PPO, EPO, or POS designation describes the plan’s approach to managed care.

Don’t hesitate to ask questions about your managed care options

As always, you can turn to a broker or navigator if you need assistance with the process of comparing health plans and picking the one that will best meet your needs. Depending on when you’re applying for coverage, our guide to open enrollment and our guide to special enrollment periods will answer many of your questions.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

When shopping for a health plan in the ACA marketplace, it’s important to recognize that while Bronze, Gold and Platinum plans have the same value no matter who is shopping, the value of Silver plans varies with income. Accordingly, the metal level that will best suit your needs is also likely to vary with income.

A lot of factors may affect your choice of metal level – your health, locality (offerings and premiums vary a lot by state and even zip code) and risk tolerance among them. But very generally speaking, Silver is almost always the best choice at low incomes, while discounted Bronze or Gold plans often make sense at higher incomes. Below, we’ll examine how income affects choice at different levels, as well as why Bronze and Gold plans are discounted to varying degrees in the current marketplace.

At first glance, the metal level system looks simple. It’s based on actuarial value (AV), which is the percentage of a standard population’s total costs that a plan is designed to cover, according to a formula provided by the federal government. Bronze plans have an AV of roughly 60%, Silver 70%, Gold 80%, and Platinum 90%.

But a subsidy called cost-sharing reduction (CSR) is available at low incomes, and only with Silver plans. CSR raises the AV of a Silver plan to 94% at incomes up to 150% of the Federal Poverty Level (currently $19,320 per year for an individual, $39,750 for a family of four), and to 87% at incomes in the 150-200% FPL range ($25,760 for an individual, $53,000 for a family of four). CSR fades to near insignificance at the 200-250% FPL level, and is not available at incomes over 250% FPL.

The American Rescue Plan, which lowered premium subsidies at all income levels through 2022, made a benchmark Silver plan (the second cheapest Silver plan) free at incomes up to 150% FPL. That makes it almost inconceivable that another metal level makes sense for an enrollee with an income below this threshold. (There’s a good chance that Congress will extend the enhanced subsidies beyond 2022, but it’s not a sure thing.)

Boosted by the highest level of CSR, Silver plans at this income level have deductibles averaging about $160 and an annual out-of-pocket (OOP) max of about $1,200. Bronze plans have deductibles averaging over $7,000 and OOP maxes ranging from about $7,000 to the highest allowable, $8,700. Gold plan deductibles average $1,600, and Gold OOP maxes are usually above $5,000.

At an income in the 150-200% FPL range, Silver plans still usually make the most sense. A benchmark Silver plan in this income range costs 0-2% of income, topping out at $43/month for a single individual. Deductibles at this second level of CSR average about $660 and OOP maxes about $2,600.

Bronze plans are generally available for free at this income level – but their deductibles average ten times as high as those of Silver plans in this income bracket and their OOP maxes are about triple.

Gold plans in some states and regions cost less than Silver plans (more on that below), and in this 150-200% FPL bracket, they too may sometimes be free. But they have a lower actuarial value than Silver plans in this bracket (80% AV, compared to 87% for Silver with CSR), and their OOP maxes are usually at least twice as high as the highest allowable for Silver.

A Gold plan could sometimes make sense for a buyer in this income bracket – for example, if it costs less than a Silver plan from the same insurer, and that insurer has a good provider network. But Silver is almost always the right choice at incomes up to 200% FPL.

Trump’s move had been expected, and analysts forecasting the likely effects (including the Congressional Budget Office) expected that Gold plans would be consistently priced below Silver. A majority of marketplace enrollees, and a large majority of Silver plan enrollees, have incomes below 200% FPL, and so get Silver with AV of 94% or 87%. On average, then, Silver plan AV is well above Gold’s 80%. It should be priced above Gold.

But Silver loading stopped halfway. Competitive pressures led insurers in many markets to underprice Silver, since most enrollees have incomes below 200% FPL, and the lowest-cost Silver plans are the most popular. Discounts generated by Silver loading have been partial and haphazard. But they exist to some degree in every market. Generally, if you buy a Silver plan and you have an income where CSR is weak or not available, you’re paying for CSR that you don’t get

In some states, a monopoly insurer or dominant insurer has priced Gold plans below – sometimes well below – the Silver benchmark. This also happens in scattered regions of other states. In a few states, regulators have required insurers more or less directly to price Silver in a way that reflects the value of CSR, ensuring that Gold plans will be available at a premium below the Silver benchmark, and that Bronze plans will be heavily discounted. States that shape their markets in this way include Maryland, Pennsylvania, Virginia, New Mexico and, starting in 2023, Texas.

Let’s look at how choices shape up in some of these markets. It’s worth noting that while deductibles in the ACA marketplace tend to be high at incomes above 200% FPL, Silver and Gold plans often exempt many services – including doctor visits – from the deductible. Bronze plans sometimes do this too, though in a more limited fashion. Also worth noting: there’s often a tradeoff between the deductible and the annual out-of-pocket (OOP) maximum that enrollees can be charged for in-network services.

In each case below, we’ll look at pricing for a single 47 year-old (the median adult marketplace age) with an income of $33,000 – too high to qualify for CSR. At that income, a benchmark Silver plan costs $117 per month – everywhere.

There’s a catch, though: this low-cost Gold plan is designed so that an enrollee would be allowed to contribute to a health savings account (HSA). This means it’s subject to a set of rules that forbid any services to be provided that are not subject to the deductible, with the exception of the free preventive services mandated for all plans by the ACA. For some enrollees, this could be a drawback. But for those who want to be able to make pre-tax contributions to an HSA, the availability of a low-cost HSA-qualified plan will be a boon.

A Highmark Gold plan, for $88 a month, has a $0 deductible but an OOP max of $7,500. The cheapest Bronze plan is effectively free, with a deductible of $6,700 and an OOP max of $8,700.

These choices are complex, no getting around it. But Gold options clearly trump the Silver. Free Bronze might make sense for some – if they can cover several thousand dollars in unexpected expenses in the event of an unforeseen accident or illness.

The cheapest Bronze plan in this market is an HSAl-qualified plan available for $5 per month, with a $6,900 deductible and OOP max. For $19/month, a UHC Bronze plan has a $6,100 deductible, and doctor visits not subject to the deductible ($40 for primary care, $70 for a specialist).

Three Bronze plans are available in the Albuquerque market at less than $1 per month, and two more at less than $30 per month. Most of these plans offer doctor visits and/or generic drugs not subject to the deductible.

As the choices above illustrate, many factors besides premium and deductible should be considered while choosing a plan. The OOP max looms especially large for people who know they will need significant medical care – and as a risk factor for the healthy. Plans with more robust provider networks generally cost more than narrow network plans. The patchwork of cost-sharing for doctor visits, drugs, imaging and tests is also part of the mix, and those who expect to need certain services should check cost-sharing for them in those plans that they are considering.

Since premiums rise with age, so do the discounts on plans that cost less than the Benchmark Silver plan, as the “spread” between the benchmark and the cheaper plan increases proportionately. In states and regions where Gold plans do not cost less than the Benchmark, this makes Bronze plan discounts really salient for older enrollees – especially those who either don’t expect heavy medical costs or those who know that they will likely reach an out-of-pocket maximum with any plan. For people with enough savings to cover an OOP maximum in a bad year ($8,700 is the highest allowable in 2022), zero- or low-premium Bronze is often a viable option.

As New Mexico’s plan menu illustrates most clearly, the high value of CSR-enhanced Silver plans at low incomes should lead to discounted Gold and Bronze options for people with higher (often only modestly higher) incomes. The federal government could shape the national market to look more like New Mexico’s. If that doesn’t happen, other states are likely to follow New Mexico’s example, as Texas has for 2023.

Bottom line: if your income is below 200% FPL, you’re almost certainly best off in a Silver plan. If it’s above that threshold, look for discounts in Gold and Bronze. While only a few states have taken positive action to maximize those discounts, they exist to varying degrees in most markets.

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* PA’s regulatory scheme fails in the Philadelphia area, where the dominant insurer, Independence Blue Cross, skirts the regulation by not offering a Gold plan with the same provider network as its cheapest Silver plan. Ambetter, a cut-rate insurer, follows suit, to a more moderate degree: its cheapest Gold plan is $130/month, $13 above benchmark.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

In the 2022 open enrollment period for ACA marketplace plans, more Americans enrolled than in any previous year. An estimated 14.5 million people obtained 2022 marketplace coverage, an increase of 21% over 2021. And 89% of them were subsidized, with the federal government paying more than 80% of the premium on average in the 33 states that use HealthCare.gov, the federal platform.

The increased enrollment was mainly due to a boost to premium subsidies provided last March by the American Rescue Plan. (The boost extends only through 2022 and subsidy increases will expire next year unless Congress extends them.) The ARP did away with the ACA’s notorious subsidy cliff, which cut off subsidy eligibility at 400% of the Federal Poverty Level ($51,040 for an individual, $104,800 for a family of four in 2022). The ARP also reduced the percentage of income required to pay for a benchmark Silver plan (the second cheapest Silver plan in each area) at every income level.

In fact, the ARP made a benchmark Silver plan free at incomes up to 150%  FPL. A third of all marketplace enrollees – 4.6 million – have incomes below that threshold ($19,320 for an individual, $26,130 for a couple, $39,750 for a family of four).

That’s really good news. But not every low-income enrollee obtained the full value of the coverage available to them. A substantial number chose or remained enrolled in Bronze plans with much higher out-of-pocket costs.

At incomes up to 250% FPL, Silver plans are enhanced by cost-sharing reduction, which reduces out-of-pocket costs. CSR is particularly strong at incomes up to 150% FPL, where it reduces the average deductible to $146 and the average annual out-of-pocket maximum – the most an enrollee will pay for in-network care – to $1,208. Bronze plans – in prior years usually the only free option – have deductibles averaging $7,051 and OOP maxes usually in the $7,000-8,700 range.

Thanks to the ARP, every ACA market now has two Silver plans that are free to people with incomes up to 150% FPL, and often several more with single-digit premiums. Still, more than 600,000 enrollees with income below the 150% FPL threshold – 14% of enrollees in that income category – are enrolled in Bronze plans. Many of them may have been enrolled in those Bronze plans in 2021, when Silver plans were rarely free, and let themselves be passively auto-renewed, which happens if you take no action during the open enrollment period.

A small percentage of enrollees with income under 150% FPL may be ineligible for premium subsidies – for example, if they have an offer of insurance from an employer that’s deemed affordable by ACA standards but for some reason prefer to pay full cost for a marketplace plan. But the vast majority of the 618,575 low-income enrollees in Bronze plans are leaving serious money on the table – or, more exactly, exposing themselves to serious costs if they prove to need significant medical care.

At low incomes, a new opportunity to switch to Silver

Fortunately, if you find yourself in this situation – enrolled in a Bronze plan while a free high-CSR Silver plan is available to you – CMS (U.S. Centers for Medicare & Medicaid Services) has created a remedy that went into effect just this March. As Louise Norris recently explained on this site:

In September 2021, the U.S. Department of Health & Human Services finalized a new special enrollment period (SEP) in states that use HealthCare.gov (optional for other states), granting year-round enrollment in ACA-compliant health insurance if an applicant’s household income does not exceed 150% of the federal poverty level (FPL) and if the applicant is eligible for a premium tax credit (subsidy) that will cover the cost of the benchmark plan.

This SEP became available on the HealthCare.gov website (and enhanced direct enrollment entity websites) as of March 21, 2022.

Some but not all of the 18 state-based exchanges are currently offering this SEP. Several don’t need to, because they offer another type of free health insurance (Medicaid or a Basic Health Program) to enrollees with incomes up to 150% FPL or higher. See the note at bottom for details.

This newly instituted SEP also allows current enrollees with income below the 150% FPL threshold to switch into a Silver plan at any time. In fact, enrolling low-income people in Silver plans specifically is an express goal of the department of Health and Human Services, spelled out in its finalization of the rule establishing the SEP:

HHS proposed making this special enrollment period available to individuals based on household income level because enhanced financial assistance provided by the ARP for tax years 2021 and 2022 is such that many individuals with a household income no greater than 150 percent of the FPL have access to a silver plan with a zero dollar monthly premium.

If your income is below 150% FPL in particular, HHS wants you in a Silver plan:

… enrollees with a newly-enrolling dependent or other household member may not use the new monthly special enrollment period to change to a plan of a different metal level other than a silver-level QHP to enroll together with their newly-enrolling household member, but can stay in the same plan or change to a silver plan to enroll together with the newly-enrolling household member.

There is one downside to switching to a Silver plan during the plan year: any money you’ve already spent this year on medical care will not count toward your new deductible and out-of-pocket max. But the deductible, OOP max and copays or coinsurance are generally so much lower in Silver plans than in Bronze that this will rarely be a deterrent – unless you have already spent enough to have reached or nearly your current plan’s OOP max.

Bottom line: if your income is below the 150% FPL threshold (again: $19,140 for a single person, $32,580 for a family of four) and you are enrolled in a Bronze or Gold plan, strongly consider switching to Silver. The new SEP for low incomes makes switching easy.

SEP varies in state-based exchanges (SBEs)

Our prior post about the SEP for enrollees with income up to 150% FPL explains:

State-run exchanges (there are 18 as of the 2022 plan year) are not required to offer this SEP. But as of early 2022, several state-run exchanges (Colorado, Maine, Pennsylvania, New Jersey, California, and Rhode Island) had already debuted the new SEP.

Several other state-run exchanges have no need for this SEP, because they have other programs with year-round availability. This includes:

• New York and Minnesota, both of which have Basic Health Programs that cover people with income up to 200% of FPL
• Massachusetts, which offers Connector Care to people with income up to 300% of FPL (enrollment is open year-round to people who are newly eligible or who have not been covered under the program in the past)
• DC, which offers Medicaid to adults with income up to 215% of the poverty level

Some of the remaining state-run exchanges may decide to allow this SEP as of 2022, and others may choose not to offer it at all. Some state-run exchanges may find that it’s too operationally challenging to make this SEP available for 2022, and may postpone it until 2023 (assuming that the ARP’s subsidy enhancements are extended).

State-run exchanges have flexibility in terms of how they implement this SEP.

As noted above, some may choose not to offer this SEP at all. For those that do offer it, proof of income might be required in order to trigger the SEP, or they may follow the federal government’s lead and allow the SEP eligibility to be based on the income attested by the consumer.

Andrew Sprung is a freelance writer who blogs about politics and healthcare policy at xpostfactoid. His articles about the Affordable Care Act have appeared in publications including The American Prospect, Health Affairs, The Atlantic, and The New Republic. He is the winner of the National Institute of Health Care Management’s 2016 Digital Media Award. He holds a Ph.D. in English literature from the University of Rochester.

During the open enrollment period for 2022 health coverage, more than 14.5 million Americans enrolled in private health plans through the health insurance marketplaces nationwide. That was a record high, and a 21% increase over the number of people who enrolled the previous year.

The open enrollment period for 2022 was a month longer in most states, and the federal government spent significantly more money on outreach and enrollment assistance. But the primary factor driving the enrollment growth was affordability. Thanks to the American Rescue Plan (ARP) – which took effect last spring – self-purchased coverage is a lot more affordable for most people than it used to be.

Unfortunately, the improved affordability is currently set to expire at the end of 2022. Unless Congress takes action to extend the subsidy enhancements made by the ARP, the subsidy structure will revert to the basic Affordable Care Act subsidies as of January 1, 2023.

Although the Congressional Budget Office projected last year that the enhanced subsidies would increase marketplace enrollment by 1.7 million Americans in 2022, enrollment actually grew by 2.5 million people. Again, some of that was due to the longer open enrollment window and the additional federal funding for enrollment assistance and outreach. But the improved affordability of marketplace coverage is the primary reason for the enrollment growth.

If the ARP subsidy enhancements are not extended, nearly everyone with marketplace coverage will have to pay higher premiums next year. And the 2.5 million additional enrollees who signed up this year may no longer be able to afford their coverage in 2023.

The subsidy cliff would return, as subsidies would no longer be available to households that earn more than 400% of the federal poverty level. As we’ve explained here, some Americans with household income a little over 400% of the poverty level had to pay a quarter – or even half – of their annual income for health insurance before the ARP’s subsidy structure was implemented.

That’s untenable, obviously. (Before the ARP, people in that situation often went uninsured or relied on less expensive options that are not comprehensive coverage – such as a health care sharing ministry plan or short-term health insurance.)

If the ARP’s subsidy enhancements expire, coverage will also become less affordable for people with income below 400% of the poverty level. Although most of them will continue to be subsidy-eligible, their subsidy amounts will drop, leaving them with higher net premiums each month. This chart shows some examples of how the ARP increased subsidies; those subsidy boosts will disappear at the end of this year unless Congress passes legislation to extend them.

Across the 10.3 million people who enrolled through the federally run exchange (HealthCare.gov, which is currently used in 33 states), the average net premium this year is $111/month. HHS noted that without the ARP’s subsidy enhancements, the average net premium would be $170/month, so the ARP is saving the average enrollee $59 per month in 2022. At ACA Signups, Charles Gaba has some alarming graphs showing just how much more people will be paying for their health insurance if the subsidy enhancements aren’t extended.

And across all 14.5 million exchange enrollees this year, 66% are enrolled in Silver or Gold plans, versus 63% in early 2021 (prior to the ARP). Some of the people who were previously enrolled in Bronze plans have shifted to more-robust Silver and Gold plans this year.

Although those percentages are still in the same ballpark, we also have to remember that enrollment is considerably higher this year. The result is that 2 million additional people have coverage under robust Silver and Gold plans this year (9.6 million, versus 7.6 million last year). This is a direct result of the additional affordability created by the ARP’s subsidy enhancements. People generally prefer the most robust coverage that they can realistically afford, and the ARP made it easier to afford better coverage.

It’s particularly important to point out that the ARP subsidies allow people with income up to 150% of the poverty level to enroll in the benchmark Silver plan for free (for 2022 coverage, 150% of the poverty level is $19,320 in annual income; for a family of four, it’s $39,750). For these enrollees, robust cost-sharing reductions make these Silver plans better than a Platinum plan, with very low out-of-pocket costs. Prior to the ARP, people in this income range had to pay premiums of up to about 4% of their income for the benchmark plan. And without the ARP’s subsidy enhancements, many of these people would be unable to afford the coverage they have this year.

The availability of free Silver plans for this population has proven to be especially important in the dozen states that have not expanded Medicaid, since people in those states are eligible for marketplace premium subsidies with income as low as 100% of the poverty level (in states that have expanded Medicaid, Medicaid is available to people with income up to 138% of the poverty level, resulting in a much smaller segment of low-income enrollees being subsidy-eligible). Although enrollment in marketplace plans grew by 21% nationwide in 2022, the most significant growth tended to be concentrated in the states that have not expanded Medicaid, where it grew by an average of 31%.

If Congress doesn’t take action to extend the ARP’s subsidies, all of these gains will be lost. Millions of people will lose their coverage or be forced to shift to less robust coverage, because their current coverage will no longer be affordable in 2023.

It’s also worth noting that the new special enrollment period for people with income up to 150% of the poverty level would expire at the end of 2022 if the ARP’s subsidies are not extended. When HHS created this special enrollment period, they clarified that it will only remain in effect as long as people in that income range can enroll in the benchmark plan without paying any premiums.

Without the ARP’s subsidy enhancements, that would no longer be the case.

Last fall, the U.S. House of Representatives passed the Build Back Better Act, which called for a temporary extension of the ARP’s subsidy enhancements. Under that legislation, the larger and more widely available subsidies would have continued to be in place through 2025 (instead of just through 2022), and the legislation also called for a one-year extension of the ARP’s subsidy enhancements for people receiving unemployment compensation.

Unfortunately, the legislation stalled in the Senate, after being opposed by all 50 Republican Senators, as well as Sen. Joe Manchin, a Democrat from West Virginia. So the subsidy enhancements for Americans receiving unemployment compensation expired at the end of 2021, and the rest of the ARP’s subsidy enhancements are currently slated to expire at the end of 2022.

The Build Back Better Act is a massive piece of legislation, addressing a wide range of issues and costing more than $2 trillion. But Sen. Manchin supports the extension of the ARP’s subsidies, which means a smaller piece of legislation addressing just this issue would be likely to garner his support.

States can have insurers file two sets of rates for 2023, or file a single set of rates that explain whether they’re assuming the ARP subsidies will expire or be extended (Missouri is an example of a state taking this approach). Some states will tell insurers to simply base their rate filings on the current situation — ie, that the ARP subsidies will not exist in 2023 — and deal with potential revisions later on (Virginia is an example of a state that has instructed insurers to file rates based on the assumption that the ARP subsidies will expire at the end of 2023; this was clarified in a recent teleconference hosted by the Virginia Bureau of Insurance).

States and insurers have previously demonstrated the ability to turn on a dime, as we saw with the rate revisions that were implemented in many states in October 2017, after federal funding for cost-sharing reductions was eliminated at the eleventh hour. So if the ARP subsidies are extended mid-way through the rate filing/review process, insurers will be able to revise their rates accordingly, even at the last minute.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.