Many people have heard of the Affordable Care Act (ACA), also known as Obamacare. However, understanding exactly what it can do for you and your family and how to take advantage of it during the Open Enrollment Period from Nov 1-Dec 15 can save you money. Here is our guide to the ACA and how to take advantage of it this open enrollment for 2021:
What is the Affordable Care Act?
The Affordable Care Act (ACA) was 2010 legislation that expanded health care coverage to Americans and restructured some of the ways the cost of health insurance plans is set up. It allows more people to be enrolled in private health insurance plans, and subsidizes the costs of those plans for people below a certain income level.
What are the changes the ACA made?
The ACA made changes to healthcare law with three primary goals. The first was to extend tax credits to many families that couldn’t afford private health insurance, which help offset some of the cost of monthly premiums. The second was to expand the Medicaid programs to cover many more people. The third was to support innovative health care delivery methods.
ACA also introduced a less expensive marketplace of private health insurance plans for people buying outside of their employers, and extended the age under which you could be covered by your parents to age 26. Initially there was a mandate, meaning a tax penalty for people not enrolled in any healthcare plan, but now this only exists in certain states (see below).
What can I do during open enrollment?
During open enrollment, you can sign up for a health insurance plan as an individual if you don’t have one through your family or employer. To sign up for a plan, go to the federal marketplace at healthcare.gov. If your state operates its own marketplace, this site can redirect you to those options. From there, sign up for one of the plans—generally there are bronze, silver, gold, and platinum plans available. Each has a different monthly premium and deductible cost, and plans also vary in terms of networks.
You choose a private health plan that fits your needs and budget during the Open Enrollment Period from Nov 1-Dec 15, and the coverage becomes active on Jan 1 of the following year when your first payment is due.
Though these plans are private health insurance plans that are purchased from major insurance carriers just like employer insurance, they can often be subsidized by either the state or federal government depending on your income level and where you live.
What does a plan from the marketplace cover?
The private plans you purchase on the marketplace are required to cover certain things like annual health care checkups, hospital care, pediatric care, outpatient care, preventative care, childbirth and pregnancy, mental health, prescription drugs, and emergency care. However, the number of doctor visits, deductible costs, and whether your health plan has a network of preferred providers depends on which plan you purchase.
Generally you can get more comprehensive care and more doctor visits per year if you buy into plans with higher monthly premiums. High-deductible low-cost plans tend to have about 2-3 free doctor visits per year and higher out-of-pocket costs, while higher-premium plans may offer more out-of-pocket coverage for additional doctor visits, lab tests, and prescription drugs.
When does the coverage I get during open enrollment go into effect?
Open enrollment coverage goes into effect on Jan 1 of the following year after you sign up for it—meaning, if you sign up for a new plan on the marketplace between now and Dec 15, 2020, you will begin coverage on Jan 1, 2021. This coverage will take you through the entire calendar year of 2021 unless you miss premium payments.
Is there a penalty if I don’t enroll?
It depends which state you live in. There is a $0 federal penalty, but in a few states there is a penalty come tax season if you don’t have some type of health care coverage for the calendar year. The states that have a penalty for not having a health plan are: Massachusetts, California, Rhode Island, New Jersey, and the District of Columbia (Washington D.C.).
To avoid a penalty in these states, you need a health care plan of some kind. This could be through insurance given to you by your employer or a spouse, Medicare, Medicaid, or some other program like the VA. However, if you don’t have any of these things you need to purchase a marketplace plan through ACA.
Can I change plans after I sign up?
No, generally after you sign up for an ACA plan you can’t make changes to it until the following calendar year’s Open Enrollment Period. However, some people with special circumstances may qualify for a Special Enrollment Period allowing them to make plan changes in the middle of the year. Special circumstances may include getting married, having a child, losing coverage through a divorce, moving, or qualifying for another form of coverage such as a plan through your employer.