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Acute Confusion As Exchange Enrollment Nears

If the comments on Covered California’s Facebook page are any indication, you’re all suffering from acute health insurance confusion:

“I wanted to sign up again this year. … I’m hesitant now because of what Trump has done. Should I still consider?”

“Does the removal of subsidies mean we might lose our premium tax credits during the year?”

“So you’re telling me that [Trump’s] executive order didn’t do anything? I am so confused.”

I don’t blame you. Choosing a health plan will be doubly hard this year given President Donald Trump’s recent move to cut off federal payments for a key consumer subsidy, his administration’s decision to shorten exchange open-enrollment periods in most states to 45 days, Congress’ failed attempts to repeal Obamacare and the departure of some insurers from certain markets.

Let me ease your mind straightaway on three critical points:

1. In California, open enrollment for individuals and families who buy their 2018 plans through Covered California and in the open market lasts three months, from Nov. 1 to Jan. 31.

2. You won’t lose the tax credits that help you — and the vast majority of Covered California enrollees — afford your premiums, assuming you still qualify.

3. The same goes for the cost-sharing subsidies that reduce out-of-pocket costs for some Covered California members, despite Trump’s decision to stop funding them.

But shopping will be challenging. Anthem Blue Cross is pulling out of a large swath of California’s individual market, on and off the exchange, forcing hundreds of thousands of consumers to find new plans. And in addition to regular, annual rate hikes — averaging 12.3 percent statewide — silver-level plans will bear an additional 12.4 percent average surcharge to make up for the loss of federal funding for the cost-sharing subsidies.

Remember, those are averages. Your actual premium will depend on several factors, including where you live, your income, what level of coverage you choose and which insurer you pick.

In an unexpected twist, some people may actually benefit from the surcharge because it could bring plans with more robust coverage within financial reach.

Before we get into all that, my most important piece of advice remains the same this year as before:

Don’t do this alone. Help from certified insurance agents and enrollment “navigators” is free. You can find local options by clicking on the “Find Help” tab on Covered California’s website, www.CoveredCA.com.

Silver-Plan Surcharge

Nearly half of Covered California enrollees qualify for cost-sharing subsidies, which lower their copays, deductibles and coinsurance. The subsidies are paid directly to insurers, and are separate from the tax credits that reduce monthly premiums.

These discounts are available only to silver-plan enrollees whose annual income falls between 139 percent and 250 percent of the federal poverty level — about $34,200 to $61,500 for a family of four. That’s why Covered California added the 12.4 percent average surcharge only to silver plans amid Trump’s threats — and ultimate decision — to stop funding the subsidies.

Covered California estimates that 78 percent of subsidized consumers will pay the same as — or less than — this year, despite the surcharge, because their tax credits will rise with their premiums. About half of the remaining 22 percent will see increases of less than $25 per month.

“This is potentially good news for both insurers and consumers,” says Greg Fann, a senior consulting actuary based in Murrieta. “And bad news for taxpayers,” who are footing the bill for the increased tax credits.

Fann offers advice to consumers based on their income.

Covered California enrollees with incomes up to roughly 200 percent of the federal poverty level — or about $49,200 for a family of four — should probably remain in silver plans, he advises, because they qualify for significant cost-sharing reduction subsidies.

Policyholders who make between 200 and 400 percent of the federal poverty level (400 percent is about $98,400 for a family of four) should consider ditching silver plans and applying their higher tax credits to gold or platinum plans, he says. Tax credits are pegged to the cost of silver plans, which means that all subsidized enrollees will benefit from higher tax credits as silver premiums rise, regardless of which plan they ultimately purchase.

Gold and platinum plans are more expensive than silver plans, but they offer higher levels of coverage and lower out-of-pocket costs.

In some cases, “the gold may be cheaper than the silver,” Fann says.

You could also apply your increased tax credits to bronze plans, which have lower premiums and higher out-of-pocket costs. According to Covered California, three-quarters of enrollees can sign up for bronze coverage for less than $10 a month.

“I suspect a lot of people are going to downgrade their plans to high-deductible plans,” says Helena Ruffin, an insurance agent in Playa Vista.

Finally, there are about 65,000 Covered California enrollees with silver plans who don’t receive premium tax credits, says exchange spokeswoman Amy Palmer.

People in this group must pay the entire cost of their premiums.

“These are the ones in the middle class that are … getting hammered,” Ruffin says.

If you’re in this category, avoid the surcharge by buying a bronze, gold or platinum plan. Or, opt for a newly created silver plan sold off the exchange that won’t be subject to the surcharge — if you’re confident your income will remain above the threshold to qualify for premium tax credits.

“There may be better options off the exchange,” Palmer says. But if your income fluctuates, “it may be better to stay on the exchange so that you can receive tax credits if you become eligible,” she adds.

Health Plan Departures

Anthem will pull out of 16 of California’s 19 pricing regions, affecting about 300,000 policyholders who purchase from the individual market, both on and off the exchange.

Its departure will leave about 60,000 Covered California consumers with one option — Blue Shield of California. If you do not select a new plan by mid-November, Covered California will automatically enroll you in one. If you’re not satisfied with its decision, you can change it before the end of open enrollment, assuming you have a choice.

For those of you losing your insurer, you’ll want to know whether your existing providers are in any other Covered California plan networks.

Unfortunately, “the doctors networks are smaller and smaller all the time,” says Tom Freker, an insurance broker in Fountain Valley.

Covered California this year has debuted a revamped online directory that will allow you to search five doctors, hospitals or pediatric dentists at once.

It’s part of the agency’s “Shop and Compare” tool that allows you to enter your personal details to retrieve your plan choices and costs.

Because the directory is new, I urge you to cross-check with your plan and/or your provider.

Also, if you’re in the middle of treatment for a complex medical condition and lose your insurer, you may have options. A new state law will allow some seriously ill patients to continue seeing their current providers for a limited time.

Your new insurer may also be able to work with your existing provider to finish your treatment. Covered California advises you to call your new health plan to explain your situation.

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