Millions to Lose Coverage During the ‘Unwinding’

For individuals or families that get — or could get — health insurance through the public marketplace, the opportunity to choose coverage for 2023 is nearing.

Open enrollment, when you can pick a health plan for next year, runs Nov. 1 through Jan. 15 for the federal marketplace at HealthCare.gov and most state exchanges. Generally speaking, people who get coverage this way are self-employed or can’t get workplace insurance, or they don’t qualify for Medicaid or Medicare.

Nearly 13 million of the 14.5 million people enrolled in private health insurance through the public marketplace — which was authorized by the Affordable Care Act of 2010 — receive subsidies (technically tax credits) that lower what they pay for premiums. Some people also may qualify for help with cost-sharing such as deductibles and copays on certain plans, depending on their income.

Here’s

what they need to know for 2023.

Premiums are rising by 4% to 5% on average

Be aware that premiums are rising nationally next year by about 4% to 5% on average, said Cynthia Cox, director for the Kaiser Family Foundation’s Affordable Care Act program.

However, she said, there is a lot of variation among states. For example, in Virginia, premiums are dropping by an average of 18% and in New Mexico they’re rising by 14%, Cox said.

“Most fall between a 1% and 7% increase,” she said.

If you have marketplace coverage and are facing a large premium increase, you can always check to see if there’s a more affordable option available, Cox said.

More generous subsidies are still in effect

However, more generous financial help remains in place.

That is, temporarily expanded subsidies that were put in place for 2021 and 2022 were extended through 2025 in the Inflation Reduction Act, which became law in August.

This means there is no income cap to qualify for subsidies, and the amount anyone pays for premiums is limited to 8.5% of their income as calculated by the exchange. Before the changes, the aid was generally only available to households with income from 100% to 400% of the federal poverty level.

The marketplace subsidies that you’re eligible for are based on factors that include income, age and the secondlowest-cost “silver” plan in your geographic area (which may or may not be the plan you enroll in).

Be sure to give a good estimate of 2023 income

Because the amount of your subsidies is based at least partly on your income, you’ll need to estimate it for 2023 in the signup process.

Giving a good estimate matters. If you end up having annual income that’s higher than what you reported when you enrolled, it could mean you’re not entitled to as much aid as you’re receiving. And any overage would need to be accounted for at tax time in 2024 — which would reduce your refund or increase the amount of tax you owe.

“You don’t want a nasty surprise when you do your taxes the next year,” Cox said.

Likewise, if you are entitled to more than you received, the difference would either increase your refund or lower the amount of tax you owe.

Either way, at any point during the year, you can adjust your income estimate or note any pertinent life changes (birth of a child, marriage, etc.) that could affect the amount of subsidies you’re entitled to.

The ‘family glitch’ is generally fixed, starting in 2023

Workers who don’t get employer-sponsored health insurance that’s considered “affordable” — no more than 9.61% of income this year — are permitted to sign up for a plan through the marketplace. However, the measurement of affordability is based on the cost of employee-only coverage.

That’s the case even if a worker wants their dependents covered too — meaning the actual cost of family coverage could far exceed that threshold.

As of 2023, here’s how it will work: If the workplace coverage for a family would be unaffordable, the employee would need to stay on the employer plan, while the spouse and kids would be covered by the marketplace — and eligible for subsidies, Cox said.

“That means families would be split between two or more health plans, which would mean having multiple premiums and deductibles,” she said. “Not all the people in the family glitch will actually be better off moving onto subsidized coverage.”

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