ACA Open Enrollment 2025: Expert Insights
Robert Powell: The Affordable Care Act's annual open enrollment season begins November 1 and lasts through January 15, 2025. Here to talk with me about what's new is Jae Oh, author of "Maximize Your Medicare." Jae, welcome.
Jae Oh: Thanks for having me, Bob.
Powell: It's a pleasure. So I should start by saying in most states, the annual open enrollment begins November 1st and lasts through January 15th. But what is it from your perspective that people need to know about what's new and what to watch out for?
Oh: I think your first point is an excellent one, which is to remember that insurance is ultimately regulated by the state. What we have is a federal guideline, but certain states have wider enrollment windows than the generally accepted national one, which is, as you rightly stated, November 1st through January 15th. This will vary from state to state. We can now see the plans that are available on the federal marketplace at healthcare.gov or other quoting systems available online.
Powell: Are there some trends that you're seeing as we head into open enrollment?
Oh: I looked at my own instance. I knew that rates would be higher; that is clear. We have seen a steady stream from carriers, for example, when they are Medicare eligible, about the higher usage rates of healthcare services driving up prices. It takes a lot to surprise me, but in this instance, I was mildly surprised at the rate of increase. In my specific case, it was higher than I suspected, even though my expectations were elevated. People should be prepared for that. That said, there are assistance programs to help lower your premium as well as possibly lower the cost-sharing details. That's called the Advanced Premium Tax Credit. I've written a research note as part of the Alliance for Lifetime Income, where we are trying to make healthcare cost planning a very important part of overall financial planning.
Powell: I should note, according to a KFF analysis, the median increase for premiums was estimated at 7%. But they also noted, as you just did, that the Advanced Premium Tax Credit could offset some of that increase in the premiums. So I guess good news, bad news, or bad news, good news, perhaps.
Oh: As always on these matters, I know it's human nature to set it and forget it. But when this amount of money is involved, increases of $100 a month plus can certainly occur per person. You'll want to check because your income changes, and you've also gotten one year older. They kind of counterbalance each other, meaning that the size of the Advanced Premium Tax Credit varies a lot based on your age, your location, and your household income.
Powell: And it's a somewhat complicated formula, not necessarily easy for the average person to understand, but there is a formula that you can check to find out where you'd fall for the credit.
Oh: In addition to that, on healthcare.gov, you can go through the process for preview and get a "sneak peek," if you will. From there, as usual, especially under the ACA, you'll want to check your network providers and try to match the plan with those doctors and hospital systems that accept the plan. It's critical under the ACA.
Powell: One bit of advice that KFF, and I'm sure you as well, would agree with is this notion of shopping around as you would for any health insurance plan is critical, especially if you're a first-time purchaser of an ACA plan.
Oh: It is very important. I've stated to people that, in fact, Medicare is cleaner. When it comes to the ACA, it's actually notably complicated. In many zip codes, over a hundred ACA-compliant plans are available on the marketplace. So within there to filter and to get to the plan which fits your needs best, your budget best, and your healthcare services needs the most appropriately, shopping is in order. I think that's very fair.
Powell: In terms of the signup process, Jae, I'm curious, there have been 200,000 complaints about the process of enrolling taking much longer than they anticipated or expected. Have you seen that in your practice? And if so, what advice do you have for people when they do sign up?
Oh: What we do is meet with people virtually to make sure that they know they're qualifying for the APTC, for example, and that the process goes smoothly. It can be tricky, meaning that if you misclick or answer a question wrongly, then the degree of the subsidy can be inaccurate. It can lead to tax issues later. We are trying to help people avoid those types of outcomes. Even above and beyond selecting the individual plan, there are multiple attachment points. So I think caution is certainly warranted. That said, the carriers are going to be following the federal rules. Sometimes there can be technology hiccups, delays between healthcare.gov and the specific carrier where you live. But ultimately, the enrollment rules are known to the carriers for sure. If the marketplace reconciles it in your favor, meaning that this is a valid application and the first payment has been made prior to the first of the month, then ultimately the carriers will certainly stand up to that and honor that application. That said, it can be unsettling for persons who believe they can click around unassisted without the practical experience of knowing that's the way it works.
Powell: It's my understanding that there are 29 states that are served by the federal marketplace by healthcare.gov. The other states have their own marketplaces. For those folks who aren't served by healthcare.gov, where do they need to go in order to find the ACA plan for them in their particular state?
Oh: It is an important point that you've raised, Bob. If you are trying to capture the Advanced Premium Tax Credit in your state, you need to use either healthcare.gov or the state-specific portal. It's very important because you cannot get the Advanced Premium Tax Credit if you do not use that pathway.
Powell: So, Jae, we've covered a lot of ground about the ACA's open enrollment period. Anything else worth mentioning or emphasizing?
Oh: Well, I think that this is an important time. The APTC is very powerful for those people who qualify, and it's important to be very careful about it. It is technically oriented because this is an upfront tax credit that you are getting on a running basis. As a result, we use a lot of our time to concentrate on making sure that our estimates, even if estimated, are as accurate as possible so that you can get the health insurance plan that you want. That is the ultimate outcome here. Sometimes that takes work, sometimes that takes preparation, sometimes it's just very easy, but there are nuances there. So at least knowing in advance is proper guidance for everybody.
Powell: We're recording this on October 28th before the federal election. And there has been discussion depending on who gets into office, whether changes or not will be coming to ACA. Is there anything that you can do to sort of help people anticipate what, if any changes would come depending on who wins the election?
Oh: Well, in the absence of a crystal ball, Bob, I don't have one. Maybe you do. But the Inflation Reduction Act has widened the eligibility for these tax credits, notably increasing the eligibility all the way up to 400% of the federal poverty level. Whether or not these specific details are under threat, depending on a possible administration change, it is possible that some of those provisions of the Inflation Reduction Act are withdrawn. I spoke at the Financial Planning Association annual meeting in Columbus, and what I stated was if anything, that means the financial planning implications are even greater so that you can prepare for certain outcomes. One of those could be that the very large APTC that is available today ends at the end of 2025 and is not extended. That, of course, changes your overall cost of living and then all of the other moving parts around it. So if anything, it has increased the need for considering how the APTC works. And for those people who have financial plans or like to think and plan for the future, know that this particular tax credit may be at risk.
