Consumers can begin signing up for health insurance today in the Affordable Care Act (ACA)’s marketplaces, for coverage beginning on January 1, 2022. Because of policy changes made by the Biden administration and Congress this year, consumers will find a far friendlier marketplace and more affordable health plans compared to past years. This is likely to boost enrollment even after a banner year in 2021 — by August, more than 12 million people signed up for marketplace plans.
Here is what consumers can expect:
More affordable health plans. The federal pandemic relief act, the American Rescue Plan Act (ARPA), greatly reduced marketplace premiums that consumers pay by increasing subsidies. People with incomes under 150 percent of the federal poverty level ($19,320 for an individual, $39,750 for a family of four) pay no premiums, and people with incomes above that pay much less than in the past. For the first time, no one enrolling in a marketplace plan will have to spend more than 8.5 percent of their income on a plan. Congress has proposed extending these subsidies through 2025 in the proposed Build Back Better legislation.
Choice of plans with lower cost sharing. Higher subsidies mean that comprehensive gold and platinum plans are more affordable this year, enabling those who choose them to potentially lower their out-of-pocket health care costs. This would be a big help to people who expect to use a lot of health care in 2022.
More time to enroll. The Biden administration lengthened the open enrollment period by a month, which means people have until January 15 to enroll. Another big change: people with incomes under 150 percent of poverty will be eligible to enroll in any month in most states.
More help. The administration dramatically increased funding for “navigators” — people who help prospective enrollees navigate the marketplaces. Navigators will be out in full force to assist people who need help understanding the differences among the often-dizzying array of health plans available.
Marketplace choices for some consumers will depend on the Build Back Better legislation that is nearing completion in Congress. Consumers who are potentially affected include:
Unemployed workers. The ARPA allowed people claiming unemployment insurance in 2021 to qualify for zero-premium marketplace plans. But that provision expires at the end of the year. Congress has extended eligibility for these workers in the proposed legislation. If Congress does not extend it, many enrollees may see their premiums increase. About 209,000 people had enrolled under this provision by September, including 34,000 who would not have been eligible for subsidies because they are in coverage gap in states that have not expanded Medicaid.
People in the Medicaid coverage gap. People with incomes under 100 percent of poverty who live in states that have not expanded Medicaid are not eligible for premium subsidies. Congress has proposed a pathway to coverage through the marketplaces in Build Back Better. The proposal will make this group of people eligible for marketplace plans with zero premiums and zero cost sharing.
People in high-cost employer plans. Currently, people in employer plans who pay 9.83 percent of income or more for a single plan are potentially eligible for subsidized marketplace plans. The proposed bill under consideration in Congress would lower that threshold to 8.5 percent of income to be consistent with another proposal in the bill, enhanced marketplace subsidies. In addition, the Biden administration is considering fixing the so-called family coverage glitch, which has made millions of people in employer family plans ineligible for marketplace subsidies. Together these two changes will increase coverage options for people in high-cost employer plans.
Making enrollment easier and premiums more affordable in 2021 had an impact: 2.8 million people enrolled in marketplace plans by the end of the special enrollment period in August. The administration’s outreach efforts, combined with these changes, also helped to enroll more people of color. With the ARPA subsidies still in place and a longer time to enroll, the marketplaces could break their own record this year.
This is important. As of 2020, nearly 30 million people remained uninsured. The Build Back Better bill’s provision to fill the Medicaid coverage gap will finally allow the more than 5 million uninsured people in the 12 states that have not expanded their Medicaid programs a way to get health insurance coverage. The vast majority of the remaining uninsured are eligible for either marketplace subsidies, Medicaid, or employer plans. Surveys show that affordability and lack of awareness of coverage options are the primary reasons people lack insurance. Doubling down on outreach efforts and looking at options like continuous eligibility in Medicaid and autoenrollment will help consumers get the coverage they need and are eligible for by law.