Open enrollment for 2017 started on Tuesday, November 1 for the Affordable Care Act (ACA or Obamacare) Marketplace. If you’re one of the nearly 14 million Americans expected to sign up for a marketplace plan in 2017, it’s time to make a decision.
You may have heard that Obamacare plan premiums are expected to increase by an average of 25%, which sounds scary—but it isn’t all bad news. Below, we break down what you can expect for 2017, and what you need to know to keep your costs down.
How much will my monthly cost actually go up?
There’s no question that you could see a big increase in your plan costs for 2017. Half of you who buy plans through the Healthcare.gov exchange will see your monthly payment go up by 16% or more, with an average increase of 25%. It could be much higher depending on where you live though—Phoenix, AZ is expected to see the biggest monthly increase at 145%.
To compare: monthly premiums increased by an estimated 2% in 2015, and 7% in 2016. Not good news for 2017.
Overall, the average monthly premium for adults is estimated to be $302 next year, up from $242 this year, according to a report from the Department of Health and Human Services (DHHS).
Why are prices increasing so much?
According to the Kaiser Family Foundation, premiums are going up in some areas because insurance companies are dropping out of the market, meaning you will have fewer options this year. Some companies are also raising rates because the premiums they charged initially were too low to cover the costs they faced.
Insurers are reporting that more people are buying exchange plans than expected—and they’re using more services than predicted.
There is also speculation that the low number of young, healthy people enrolled is contributing to rising costs. In 2016, only 28% of Americans enrolled in exchange plans were in the 18 – 34 age group—and that number hasn’t really increased since 2014.
Can I choose a different plan to lower my costs?
Maybe. Around 21% of consumers shopping in the federal exchange will find plans from only one insurance company, compared with 2% in 2016.
The DHHS also reports that on average, consumers can choose from 30 total plans in their county—down from 47 plans in 2016.
Yes, less choice is a bad thing. But keep things in perspective—you would likely have fewer choices with an employer-sponsored plan. According a 2015 survey, 30% of Americans with insurance through their employer were only offered a single plan from a single provider.
However—even with fewer options, you can still try to change your plan to lower your monthly costs. The DHHS report estimates that if all consumers switched from their current plan to the lowest premium plan in the same “metal” level (Silver, Gold, Bronze, or Platinum), the average 2017 monthly premium after tax credits would be $28 less than 2016.
Obviously, this could mean a decrease in your coverage as well, but if your goal is to lower your monthly premium, it’s worth considering.
What about subsidies?
Subsidies are discounts on your monthly payment meant to reduce your out-of-pocket cost if your income is under a certain amount. You qualify for these discounts if you are under 65 and making between 100% and 400% of the federal poverty level (FPL).
If you make under 250% of the FPL, you’re also eligible for reductions on silver plans—and if you make under 138%, you’re eligible for Medicaid.
84% of people buying a plan on the exchange qualified for at least some subsidy in 2016, and it should stay about the same in 2017.
What if I would rather pay the penalty?
As you probably know, there is now a penalty fee for being uninsured. Be aware that the penalty could top $700 per person or $2100 per household in 2017. In 2016, your penalty for being uninsured was 2.5% of the total household adjusted gross income, or $695 per adult and $347.50 per child. The maximum penalty in 2016 was $2085.
In 2017, the 2.5% percentage will stay the same, but the flat fees will be adjusted for inflation.
Are there ways to avoid the penalty and still not pay for insurance?
There are a few ways to claim an exemption from the penalty, including:
- The most affordable coverage available to you costs more than 8% of your household income.
- You are exempt from filing a tax return because your income is too low.
- You were uninsured for fewer than three months of the year.
- You qualify for a hardship exemption (due to issues like homelessness, bankruptcy, or eviction).
You can check for more ways to qualify and apply for an exemption on Healthcare.gov.
I want to get a plan through the exchange—what else can I do to save?
- Shop around on the exchange. More than 70% of current marketplace enrollees should be able to find a plan for $75 or less in premiums per month, after applicable tax credits in 2017. 77% will be able to find a plan for less than $100 per month (including rebates).
- Need a particular prescription, procedure, or type of care covered? Do your research—go online or call the plan provider to find out if the plan you’re considering offers coverage that will work for you.
- Find other ways to save. If you’re paying out of pocket until you hit a high deductible, GoodRx can help you compare prices, and potentially help with your prescription costs. Also consider pharmacy membership programs—many pharmacies offer free or discounted generic prescriptions (like atorvastatin, lisinopril, metformin, and some antibiotics)—and manufacturer discounts.
- Free preventive care. Vaccinations and screening for many common conditions are free for all adults, and contraceptives are free for women. Some plans will even provide breastfeeding equipment and counseling for pregnant and nursing women.