Understanding Health Insurance Changes for 2018

What's changing about my health insurance for 2018?
Yuri Arcurs/Getty Images

Healthcare reform has been in the news almost non-stop throughout 2017, so if you're confused about what's happened and what will happen in 2018, you're certainly not alone. Let's take a look at what's changing, what's staying the same, and what you can expect in terms of your health insurance in 2018.

Proposed Changes Not Enacted

Despite the ever-present headlines about health care reform in 2017, most of the proposed changes have withered on the vine.

The American Health Care Act (AHCA) was passed by House Republicans in May in an effort to repeal the Affordable Care Act, but the Senate's version, the Better Care Reconciliation Act (BCRA), failed in July. In fact, Senate Republicans tried to pass three different versions of the bill—"skinny" repeal, the Obamacare Repeal Reconciliation Act, and the BCRA—and none garnered enough support to pass.

In September, the Graham-Cassidy-Heller-Johnson amendment was introduced as the Senate's updated version of the ACA repeal legislation, but its success seemed doubtful after Senator John McCain (R, Arizona) announced his opposition.

Senator Rand Paul (R, Kentucky) had already expressed opposition, and Senators Lisa Murkowski (R, Alaska) and Susan Collins (R, Maine) were leaning towards opposition. September 30 is the deadline for the Senate to use the budget reconciliation process that would allow them to repeal the ACA with 50 votes (plus a tie-breaker vote cast by the Vice President) and avoid a filibuster.

And if three or more Republican Senators oppose the measure, it won't pass.

So although there have been numerous pieces of legislation introduced in 2017—and the House did pass the American Health Care Act—none of them have been enacted.

That means the ACA is still fully in effect, including the premium subsidies, the cost-sharing reductions (aka, cost-sharing subsidies), Medicaid expansion, the individual mandate, the employer mandate, protections for people with pre-existing conditions, essential health benefits, medical loss ratio rules, etc.

Cost-sharing subsidies will continue to be available in 2018, regardless of whether the federal government provides funding for insurers to cover them (the funding issue has been a cause of considerable uncertainty throughout 2017). Insurers in many states are incorporating the cost of providing cost-sharing subsidies into the premiums they'll be charging for 2018, and those higher premiums will be offset for most enrollees by larger premium subsidies. Eliminating cost-sharing subsidies altogether (or premium subsidies) can only be done via legislation.

Changes Due to Market Stabilization Rule

In April 2017, HHS finalized the market stabilization rule that they had proposed in February. Although the rule was ostensibly aimed at stabilizing the individual health insurance market, it didn't address the two factors that have been the most destabilizing for the individual market: lack of robust enforcement of the individual mandate (real or perceived, as the impact is still fewer healthy people enrolling in coverage and a risk pool that has worse overall health), and ongoing funding of cost-sharing reductions.

Not only were those issues not addressed in the market stabilization rule, they have continued to cause significant market uncertainty in the subsequent months, and have played a prominent role in some insurers opting to leave the market at the end of 2017 or file much higher premiums for 2018 than they would otherwise have charged.

But the market stabilization rule did address several other issues, albeit much less pressing ones than the individual mandate and the cost-sharing reductions. The changes generally apply to people who buy individual market coverage, on or off-exchange:

  • In most states, open enrollment has been shortened to just over six weeks and will run from November 1 to December 15, with all plans effective January 1, 2018. But there are nine state-run exchanges that have extended the deadline to enroll, so make sure you know how it works in your state.
  • If your policy was canceled for non-payment of premiums in 2017 and you re-enroll with the same insurer (or another insurer owned by the same parent company) during open enrollment, the insurer will be able to require you to pay your past-due premiums before effectuating your new coverage. In general, it should only be one month of past-due premiums owed, as premiums are not charged after the plan was terminated.
  • The allowable actuarial value range for each metal level of coverage in the individual and small group market has been expanded. Bronze plans will have a -4/+5 range, while silver, gold, and platinum plans will have a -4/+2 range. Bronze plans have an actuarial value of about 60 percent, silver about 70 percent, gold about 80 percent, and platinum about 90 percent. But they can vary according to the allowable de minimus ranges, which have been widened for 2018. This just means that there could be more variation from one plan to another within a given metal level, so individuals and small businesses will want to carefully compare the various options that are available for 2018.

Benefit and coverage changes in the individual and small group market will happen just as they have in past years, with adjustments to deductibles and out-of-pocket limits, along with provider networks and covered drug lists. Don't assume that the plan that you picked last year will still be the best option for you in 2018—it's always wise to compare the options available to you during open enrollment, and make changes if necessary.

Less Marketing and Enrollment Assistance

If you live in a state that doesn't have its own health insurance exchange and relies instead on HealthCare.gov, you may notice that marketing, outreach, and enrollment assistance are more limited during the open enrollment period for 2018 coverage than they've been in the past.

HHS announced in late August that they would be cutting the marketing budget for HealthCare.gov down to $10 million this year, from $100 million last year. They also noted that they would be cutting the budget for the Navigator program, which provides in-person enrollment assistance to people in states that don't run their own exchanges. State-run exchanges fund their own Navigator programs, and their budgets aren't impacted by the federal budget cut.

Health plans in the individual market have also been reducing broker commissions for individual market coverage over the last few years, eliminating it altogether in some cases. This is due in large part to the non-profitable nature of the individual market for many insurers, now that the ACA has changed the rules; some insurers have decided that they don't want to pay brokers to bring in business that ultimately is a money-loser for the insurer. Commissions are generally the only way for brokers to get paid, so some brokers have opted to not work with individual market coverage because they can't afford to work for free.

All of this means that individual market enrollees in some parts of the country may find that there isn't as much enrollment assistance available as there used to be. There will still be help available, but enrollees will need to plan ahead and not wait until the last minute—keeping in mind that the last minute will arrive much sooner in most states this year than it did in previous years.

It also appears that HealthCare.gov, the exchange enrollment portal used by people in 39 states, will be down for scheduled maintenance for a large chunk of most Sundays during open enrollment this fall, and even overnight on the first day of open enrollment, November 1. This is a highly controversial move, and could end up changing before open enrollment. But for now, people with individual market coverage would be wise to plan for enrollment or plan changes to take longer than usual this year.

Enrollment Platforms and Plan Availability

If you have coverage in the individual market, on or off-exchange, you may need to pick a different plan for 2018 due to your insurer exiting the market, or you may find that you have access to new plans due to an insurer entering the market in your area (here's a list of the major exits and entrances).

Although there has been ongoing talk of "bare" counties in 2017, every county in the country has at least one insurer lined up to offer 2018 coverage in the exchange as of mid-September. That could still change, but it's noteworthy that in every state where there were initially counties without insurers slated to offer coverage for 2018, insurers have since stepped up to fill in the bare spots (this happened in Ohio, Wisconsin, Nevada, Virginia, Indiana, KansasMissouri, and Washington).

The insurance exchanges themselves are not changing for 2018. All of the states that run their own exchanges in 2017 will continue to do so for 2018, and all of the states that use HealthCare.gov in 2017 will also continue to do so.  Only 12 states have their own enrollment platforms; the rest—including states with partnership exchanges, federally-run exchanges, and state-run exchanges using the federal platform—all use HealthCare.gov.

However, consumers in many states may find that it's easier to enroll "on exchange" via a third-party web broker's site, as the federal government is allowing a "proxy direct enrollment pathway" beginning this fall that will eliminate the need for applicants to go back and forth from the web broker's site to HealthCare.gov. Consumers will still have to create an account on HealthCare.gov, but will be able to complete the rest of the process on the web broker's site.

And if you're shopping for small group coverage in the exchange, you may see some differences, as HealthCare.gov has shifted to utilizing more of a direct enrollment process for small businesses. The small business health insurance exchange has never been particularly popular, however; most businesses have enrolled off-exchange—directly through the insurers—from the start.

Changes Due to Trump's Executive Order on the ACA

On his first day in office, Presiden Trump signed an executive order aimed at "minimizing the economic burden of the Patient Protection and Affordable Care Act pending repeal." At that point, the expectation among the Trump Administration was that an ACA repeal bill would be passed soon, which did not come to pass.

But the executive order directs federal agencies to be as lenient as possible—within the confines of the law—when enforcing the ACA's provisions.

The individual mandate, which requires most Americans to maintain continuous health insurance coverage or face a tax penalty, has been the subject of constant speculation since the executive order was signed. To be clear, the individual mandate is still in place in 2017, and it appears that will also be the case in 2018. Most of the ACA repeal bills that Republicans in Congress have introduced in 2017 (including the Graham-Cassidy-Heller-Johnson bill) would have reduced the individual mandate penalty to $0, retroactive to the start of 2016. But none of those bills have been enacted.

At Health Affairs, Tim Jost reported in August that the individual mandate was indeed still being enforced by the IRS, despite rumors to the contrary, and the IRS website notes that despite the executive order, "legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain obligated to follow the law and pay what they may owe. Taxpayers should continue to file their tax returns as they normally would."

However, the IRS did allow people to file 2016 tax returns in the spring of 2017 that didn't answer the question about whether the filer had health insurance in 2016. They had allowed that for 2014 and 2015, but had intended to reject such returns for 2016, and require all filers to answer the question. They reversed course on that change following President Trump's executive order, and continued to accept "silent" returns that didn't say whether or not the tax filer had health insurance coverage.

It's unclear whether the IRS will change their stance on this issue heading into the tax filing season in early 2018, but it's unlikely that they will, given Trump's executive order.

Large Group, Medicare, and Medicaid: Normal Annual Changes Apply

Most of the health care reform debates in 2017 have centered around the individual market, the small group market, and Medicaid. But as noted above, most of those debates have not resulted in any tangible changes. For people who get their insurance from large employers, Medicare, or Medicaid (taken together, that's most of the population), the changes for 2018 will generally be the same sort of changes that happen each year.

Open enrollment for Medicare Advantage and Medicare Part D runs from October 15 to December 7, with all changes effective January 1, 2018. Current plans will change somewhat for 2018—as they do each year—so it's important for enrollees to take time during open enrollment to compare the various available options and select the one that will best meet their needs in the coming year.

The same is true for employer-sponsored plans. Most employers have open enrollment in the fall, with benefit changes effective January 1. If your plan is experiencing changes for the coming year, or if there are new options available to you, open enrollment will be your opportunity to change your benefits if you choose to do so.

None of the health care reform proposals related to Medicaid were enacted in 2017, which means that eligibility will continue in 2018 largely unchanged from 2017, including the ACA's Medicaid expansion. No new states have expanded Medicaid eligibility in 2017, so the income levels for Medicaid expansion eligibility remain the same as they were at the start of the year. If you get a request from your state Medicaid agency to reverify your Medicaid eligibility, you'll want to provide the required documentation as soon as possible to avoid a lapse in coverage.

Sources:

Cassidy.Senate.gov. Text of Amendment 543 to H.R.1628 (Graham-Cassidy-Heller-Johnson amendment to the American Health Care Act). Introduced September 13, 2017.

Centers for Medicare and Medicaid Services. The Future of the SHOP. CMS Intends to Allow Small Businesses in SHOPs Using HealthCare.gov More Flexibility when Enrolling in Healthcare Coverage. May 15, 2017.

Department of Health and Human Services. Patient Protection and Affordable Care Act: Market Stabilization. April 2017.

Internal Revenue Service, Individual Shared Responsibility Provision.

WhiteHouse.gov, Office of the Press Secretary. Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal. January 20, 2017.

Continue Reading