Missed Open Enrollment? Take Advantage of This Rare Opportunity To Get Health Insurance

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If you don’t have health insurance at work, you’ll have a special opportunity to buy a policy on your own from Feb. 15 to May 15, 2021. This can be a good time to get health insurance if you don’t have coverage, and you may be able to switch policies if your income or healthcare needs have changed. If your income has dropped, you may qualify for a substantial subsidy to cut your premiums.

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You usually can only buy health insurance from the Affordable Care Act marketplaces during open enrollment, which runs from Nov. 1 to Dec. 15 each year, or if you qualify for a special enrollment period. For example, if you lose your job, you have 60 days after losing your employer’s health insurance to buy a policy on your state’s insurance marketplace. But President Joe Biden recently signed an executive order reopening the insurance marketplaces from Feb. 15 to May 15, 2021.

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The order applies to the 38 states that use the Healthcare.gov marketplace, where you can buy new coverage or switch policies. Most states that run their own marketplaces are also reopening for a similar time period. A few of those states are only allowing people to buy new health insurance if they were uninsured, but not switch policies if they already had coverage, said Rachel Schwab, a research associate with the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms. Start by going to Healthcare.gov to find out which marketplace, timeframe and rules apply to you.

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Who can this new open-enrollment period help? For people who don’t have health insurance, this will be an opportunity to get coverage. With a pandemic going on, this is an especially risky time to go without insurance. And if you already have coverage, this can be a good time to see if you can find a better deal (in most states). If you discovered that your doctor or drugs aren’t covered by your policy this year, or that your copayments for your care are high, you can see if another policy will provide better coverage for your needs. If your income has dropped, you may qualify for a subsidy — or a larger subsidy – -to help reduce your premiums.

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But be careful before switching plans if you’ve already used some coverage toward the deductible this year. “It’s worth noting that changing to a new plan may very well mean that things like the deductible and limits on out-of-pocket spending will re-start, so it’s not always a clear-cut choice to change your plan just because you can,” Schwab said.

Who qualifies for a subsidy to reduce premiums, and how much can it help? You can qualify for a subsidy if your modified adjusted gross income is 100% to 400% of the federal poverty level — in 2021, you can qualify for a subsidy if your income is less than $51,040 for singles, $68,960 for a couple, and $104,800 for a family of four. A subsidy can cut your premiums significantly. For example, a 35-year-old couple in Chicago who earns $80,000 per year and has two children could qualify for a subsidy of $416 per month. If they bought a silver-level (a mid-level) policy, they’d pay about $655 per month in premiums, even though the full price is $1,071. They could buy a bronze-level policy (which usually has higher deductibles) for about $418 per month.

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If you lost your job and have a much lower income this year, you can qualify for a larger subsidy. For example, if that same family has $40,000 in income for the year, they’d qualify for a subsidy of $929 per month, bringing the cost of a silver-level plan down to $142 per month. They could get a bronze-level policy for $0 per month. (If you earn less than 100% of the federal poverty level, you don’t qualify for a subsidy but you may be eligible for Medicaid, depending on your state).

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You can run your numbers through the Kaiser Family Foundation’s subsidy calculator to estimate your subsidy and premiums. Go to Healthcare.gov for links to your state’s marketplace, where you can find out how much you’d pay (before and after the subsidy) for the specific policies available in your area.

What if my income changes? The subsidy is an advance premium tax credit based on your 2021 income. You need to estimate your income for the full year when you apply for a policy, which will determine how much of a subsidy you’ll receive. If your income ends up dropping later in the year, you can update your income with the marketplace and get a larger subsidy. If you end up getting a new job and earning more than expected by the end of the year, you may have to pay back some of the subsidy when you file your 2021 income-tax return next spring.

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What is the difference between a premium subsidy and a cost-sharing subsidy? There are two types of subsidies based on your income. If your income is less than 400% of the federal poverty level then you qualify for a subsidy to reduce your premiums. If your income is less than 250% of the federal poverty level, then you can also qualify for an additional subsidy — a cost-sharing subsidy, which can reduce your deductibles and copayments.

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You can qualify for a cost-sharing subsidy in 2021 if your income is less than $31,900 if you’re single, $43,100 for a couple, and $65,500 for a family of four. However, you can only receive the cost-sharing subsidy if you buy a silver-level policy.

What is a silver-level and bronze-level policy? Policies sold on the health insurance marketplaces come in four metal levels: Bronze policies generally have the lowest premiums but the highest deductibles and copayments. Silver policies are mid-level policies that usually have slightly higher premiums but lower deductibles and copayments. Gold and platinum policies tend to have the highest premiums and the lowest cost-sharing.

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If you qualify for a cost-sharing subsidy, however, you may end up paying less out of your pocket during the year for a silver policy than you would for a bronze policy. If your income has changed and you now qualify for the cost-sharing subsidy, it’s a good time to reassess your coverage options.

How should I choose a policy? Go to Healthcare.gov to buy coverage or find links to your state’s marketplace. Input information about your age, family size, ZIP code and income to find out how much you’d pay for each policy. “People can fill out some screening questions and then look at the plans available on Healthcare.gov to see the premium prices, provider networks, and cost-sharing amounts that would apply to them,” said Cheryl Fish-Parcham, director of access initiatives at Families USA, a national, nonpartisan consumer healthcare advocacy organization.

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Focus on the after-subsidy premiums, not the list price. Look at the deductibles, copayments for your typical care, the out-of-pocket maximums (the most you’d have to pay for copayments and deductibles during the year), and how any prescription drugs you use are covered. Also find out if the doctors and hospitals you use are included in the plan’s network and what happens if you go to an out-of-network provider — some plans have higher copayments and deductibles for out-of-network care, but others don’t cover out-of-network providers at all except for emergencies.

If you need help navigating the marketplace site or have questions about choosing a policy, you can get help from a local navigator — see Get Extra Help at Healthcare.gov.

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Last updated: Feb. 15, 2021

About the Author

Kimberly Lankford has been a financial journalist for more than 20 years. As the “Ask Kim” columnist at Kiplinger’s Personal Finance Magazine, she received hundreds of reader questions every month about insurance, taxes, retirement planning and other personal finance issues. Her financial articles have also appeared in the Washington Post, U.S. News & World Report, AARP Magazine, Boston Globe, PBS Next Avenue, Bloomberg Wealth Manager and Military Officer Magazine, and her syndicated columns were published regularly in the Chicago Tribune, Denver Post, Baltimore Sun and other papers.

Missed Open Enrollment? Take Advantage of This Rare Opportunity To Get Health Insurance
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