Last-Minute Consumers Face Ticking Clock to Buy Health Insurance

Editors' pick: Originally published Jan. 30.

Consumers who have not purchased health insurance only have two days left to buy coverage through a government exchange or marketplace or face a tax penalty or the possibility of hefty medical bills.

The nationwide open enrollment period ends on January 31. Consumers who decide to forgo health insurance will not be able to purchase coverage unless they experience a qualifying life event such as moving or changing jobs and will encounter a hefty tax fine under the Affordable Care Act.

Despite the imminent deadline, consumers should still opt to allocate time to research and determine if they want to buy the same plan or find a a new one which is more suitable.

"People should sign up for health insurance now before the end of the open enrollment period because no one knows what the future of health insurance will look like in the United States a year from now," said Nate Purpura, vice president of consumer affairs at eHealth.com, an online health insurance exchange based in Mountain View, Calif. "With many Obamacare rules still in place for the foreseeable future, you should get a health insurance plan while you still can."

Subsidies Still Available

Options remain plentiful since consumers have an average of 30 health insurance plans to select from and an October report stated that 72% of shoppers in states using HealthCare.gov can find inexpensive, subsidized plans with a premium under $75 each month and 77% will find plans that are under $100 each month, according to the Department of Health and Human Services.

HHS Secretary Sylvia Burwell said in a prepared statement that as of early 2016, the percentage of Americans without health insurance declined to 8.6%, the lowest level in the history of the U.S.

Tax credits encourage Americans to purchase coverage by lowering the amount of the premium such as allowing a 27-year-old in Dallas with an income of $25,000 to pay only $159 a month in 2017, an increase of $16 per month from last year for a silver plan, which is the benchmark and second lowest option. Tax credits given to consumers also rose to compensate for increases in premiums. Out of the current marketplace, 85% of consumers receive tax credits and an estimated 2.5 million who have paid full price could also qualify for them.

"If you sign up now, you may still qualify for Obamacare subsidies to make your coverage more affordable, depending on your income," he said. "Going without health insurance can leave you open to crippling medical bills in case of an unexpected illness or injury."

Consumers need to obtain coverage now, because the outcome of the new administration's plan to alter health insurance remains murky and unknown.

"Signing up now is a good idea because Republican reform proposals may once again allow insurance companies to deny you coverage or charge you more, based on your personal medical history," said Purpura.

If new plans become available later on this year, consumers who already have coverage will likely experience fewer issues attaining another plan, which is called "creditable coverage," he said.

Consumers should not automatically assume the plan they purchased last year resembles the one on the marketplace, because your doctor could have changed networks and your medical needs may be different also.

"You will need time to talk with someone if you have any questions since insurance is complex," said Purpura. "You may have questions that can't be answered by a Google search."

Procrastinators should not overlook the details of a plan because some of the out-of-pocket costs for a doctor or hospital can add up quickly.

"Find time to choose a plan with a deductible and copays you can actually afford since these costs are just as important as your monthly premiums," he said.

While waiting to purchase insurance on January 31 means coverage does not begin until March 1, the mandates of the ACA ensure that every plan offers free preventive healthcare. In the majority of plans, the initial two or three primary care visits are inexpensive and consumers pay a co-pay of $30 to $50 compared to hundreds of dollars for lab tests if they did not have coverage.

"People often say insurance is expensive until you need it," said Noah Lang, CEO of Stride Health, the San Francisco health insurance exchange company. "The thing I hear most from people who have gotten sick or had emergencies is how glad they were to be covered."

Determine what kind of prescription drug coverage fits your needs. If you tend to take generic drugs, a plan with inexpensive medicine may not be a priority.

If you miss open enrollment, the fee for 2017 remains the same as 2016. Each person pays $695 and the fee for children under 18 is $347.50 with a maximum penalty of $2,085 or 2.5% of household income, whichever is higher. The fee is paid when you file your federal tax return.

Waiting until the last day means you might get stuck in online queues, because thousands of people are attempting to submit their applications.

"In the last-minute crush you could get stuck trying to submit your application for hours and there's a chance your enrollment won't go through in time," Purpura said.

Consumers who miss open enrollment can enroll during the special enrollment periods only if they experience a qualifying life event. When a qualifying life event occurs, it triggers the special enrollment period of 60 days for enrollment in a new plan. These events include losing coverage from your employer or your COBRA coverage ends, getting divorced or married, having a child, turning 26 and losing coverage under your parents' plan.

Other qualifying life events include moving to a new coverage area or major changes to your income where you can qualify for government subsidies under Obamacare.

Premiums Rose

During the past ten years, the cost of health insurance has risen steadily and increased by 147% for individuals and 177% for families, according to data from eHealth.com.

In 2008, the average premium for an individual was $159. By the first two months of Obamacare's 2017 open enrollment period, the premium for a non-subsidized shopper increased to $393.

Over the same period, the average monthly health insurance premium for families increased from $369 to $1,021.

Other Stopgap Insurance Products

While these plans fail to provide comprehensive coverage like the ACA-compliant plans, these other insurance products are available year-round and prevent consumers from being saddled with major medical bills. Since the insurance coverage does not qualify under the ACA, consumers still must pay the penalty.

Short-term health insurance plans are popular, but they do not cover pre-existing conditions or preventive care and some do not include prescription drugs. These gaps provide consumers with coverage for major injuries and unexpected illnesses so they don't face expensive bills. The coverage ranges from one month to 12 months.

Accident insurance plans only provide a payment if consumers are victims in a covered accident and critical illness insurance plans mirror accident insurance plans in case you are diagnosed with a serious medical diagnosis.

"The money goes directly to you rather than to your medical care providers, so you can use it to pay medical bills or pay for things like rent or your mortgage while you're in the hospital," Purpura said.

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