Open enrollment 2021: Answers to five key questions

Open enrollment for Affordable Care Act (ACA) plans runs from Nov. 1-Dec. 15, 2020 in most states for 2021 health plans.

The federal government’s rule gives people shopping for 2021 individual health coverage on the federal exchange, or directly with insurers, 45 days to sign up. However, some states that operate their own exchanges offer more the time that people have to buy health insurance for themselves. 

Here are the open enrollment dates:

Americans are no longer fined if they don’t have health insurance. Congress wiped out the individual mandate penalty as part of its major tax bill in 2017. Of course, having health insurance is one of the most important purchases you make. You still have multiple options.

If you’re not covered through your employer, your employer’s spouse or another way like Medicare or Medicaid, you can get an individual health plan through the ACA exchanges or buying directly with health insurance providers to cover you and your family.

Here’s what you need to know about open enrollment:

What do health plans cover?

There was a time not too long ago when low-cost health insurance plans offered limited coverage. However, the ACA required health insurance plans on the ACA exchanges to cover essential health benefits, including:

• Outpatient care
• Chronic disease management
• Emergency care
• Hospitalization
• Pregnancy and newborn care
• Mental health and substance abuse services
• Prescription drugs
• Rehabilitation services
• Lab tests
• Preventive and wellness services
• Dental and vision care for children

The plans offer more protection for you and your family, but with that additional coverage usually comes a higher price tag than what you would have paid for health insurance just a few years ago when insurers could offer plans with limited benefits.

Health insurers’ plans vary greatly based on premiums, out-of-pocket costs, deductibles and provider networks. You can find out the specifics about each plan offered by reviewing the Summary of Benefits and Coverage on each plan’s website or your ACA marketplace may provide side-by-side comparisons.

What can you do during open enrollment?

You can keep your current health insurance plan or choose a new plan through the ACA exchanges or with a health insurance provider directly.

If you’re enrolled in a marketplace plan, it will automatically renew. However, you still want to research plans to see if the insurance company made any changes to the provider network and out-of-pocket costs like copays and deductibles. It’s a good idea to review that information to make sure your plan still makes sense for you and that your providers are still part of the plan.

ACA plans are divided into four types: Bronze, Silver, Gold and Platinum. These plans vary by premiums and out-of-pocket costs. 

Bronze plans have the highest out-of-pocket costs and the lowest premiums. You can think of them kind of like high-deductible health plans that have become common for employer-based health insurance. Platinum has the lowest out-of-pocket costs, but also higher premiums. A good way to look at it is the higher premiums you pay, the lower you’ll have to spend on out-of-pocket costs during the year.

According to eHealth, the average monthly monthly premium for an individual was $456 in 2020. That was a slight increase from an average of $448 in 2019. Unlike previous years, which saw huge hikes, the average premium increased have slightly increased each of the past two years. 

Here are the average premiums for individual coverage by metal level, according to eHealth:

• Bronze — $448 (an $8 average increase from 2019)
• Silver — $483 (a $2 average increase from 2019)
• Gold — $596 (a $27 average decrease from 2019)
• Platinum — $732 (a $26 increase from 2019)

For family coverage, the average premiums were $1,152 in 2020, which was a $2 decrease compared to 2019. Here is how they broke down by plan tier:

• Bronze — $1,041 (a $39 average decrease from 2019)
• Silver — $1,212 (a $32 average increase from 2019)
• Gold — $1,437 (an $11 average increase from 2019)
• Platinum — $1,610 (an average $150 increase from 2019)

eHealth said the most popular plan in the individual market is Bronze. Forty-two percent of people with plans have a Bronze plan. Silver is second with 34%. Fourteen percent picked Gold plans and only 2% chose a Premium plan. These numbers were nearly identical to 2019. 

Health plans also vary by their benefit design. The three most common types of plan design in the ACA marketplace are health maintenance organization (HMO), exclusive provider organization (EPO) and preferred provider organization (PPO) plans. PPOs are the most common type of plan in employer-sponsored health insurance. However, HMOs are the top plans in the ACA marketplace and insurers have increasingly offered more EPO plans in recent years. 

Here’s the break down by plan type:

• HMOs — 49% of ACA plans (down from 56% in 2019)
• EPOs — 33% of ACA plans (up from 26% in 2019)
• PPOs — 16% of ACA plans (the same percentage as 2019)

PPOs are usually more expensive. Those plans don’t require doctor referrals to see specialists and allow you to get care outside of your provider network — though at a higher price than in-network. HMOs and EPOs don’t pay for care outside of provider networks. 

People can also enroll in low-cost, low-coverage health plans called called catastrophic health plans. Only young people and those who couldn’t afford any other health insurance are eligible for catastrophic plan coverage. 

Catastrophic plans offer the same level of coverage as other ACA plans. However, they have must high deductibles, which you have to pay before the plan chips in money to pay for care. 

The average individual premium for catastrophic care was $195 in 2020 — a $2 average increase from 2019. 

Regardless of what plan you choose, spend the time to review your options and pick the right plan for you and your situation.

Think about the past few years of your healthcare services, as well as the healthcare provided to your spouse and family. Then, think about the year ahead.

Some things to think about:

• Do you regularly visit your provider for a chronic illness?
• Have you been dealing with occasional health issues that may require more healthcare services?
• Do you take costly prescription drugs?
• Do you plan on starting a family in the next year?
• Do you have enough money set aside to pay for potentially high deductibles?

That all goes into what’s the best plan to choose for your situation. Generally, higher premium/lower out-of-pocket costs like Platinum plans could make more sense if you expect to need healthcare services. However, if you’re young and healthy and would rather pay more for using healthcare services than paying a higher monthly premium, then a Bronze plan or even a short-term plan could be right for you.

It’s critical that you give this much thought because you won’t be able to change the plan again for a year.

Bill Green, managing agent at Green Insurance Agency Corp., said deciding on a health plan depends on whether you want to pay higher premiums or more out-of-pocket costs. Some people would prefer saving on the monthly premiums and pay more as they, while others want a lower premium with the understanding they’ll pay more out-of-pocket costs when they need health care services. 

“People who have health issues who are likely to use and potentially hit the max out of pocket are generally very much driven by lower cost coverages than by premiums. Many times people with health concerns are not able to qualify for those additional plans and therefore have to make sure that what they pick covers them as much as possible,” Green said. 

Is open enrollment the same for other types of health insurance plans?

Open enrollment for ACA plans and individual health plans in most states is Nov. 1-Dec. 15, but it’s different for other type of health plans.

For instance, if you’re covered by your employer, you will likely have a different open enrollment period. There is no standard open enrollment period for businesses. They choose their own. Many are in the fall or winter, but yours may be in the spring. Check with your employer’s benefits department to find out your open enrollment.

If you’re in Medicare, your open enrollment is Oct. 15 to Dec. 7, 2020. During open enrollment for Medicare, you can keep the same coverage, change Medicare Advantage or Part D prescription drug plans, switch Medicare Advantage plans or even swap from Medicare to a Medicare Advantage plan.

For those who qualify for Medicaid or the Children’s Health Insurance Program, there is no open enrollment period. Instead, you can enroll at any time of the year.

What if you miss the open enrollment period?

If you don’t sign up or don’t make changes during open enrollment, you won’t be eligible to switch plans for a year unless you qualify for a special enrollment.

Some events that trigger a special enrollment is if you get divorced, married, have a child, adopt a child, your spouse dies, your spouse loses a job or even if you are in an HMO and you move outside its coverage area.

How much are the penalties for not having insurance?

There is no longer an individual mandate penalty, so you won’t get penalized for not having a recognized health plan at tax time. Previously, you could pay a nearly $700 penalty per adult and another charge for uncovered children, but Congress wiped out that tax penalty.

However, a handful of states have their own individual mandate, which requires you to have health insurance. If not, you can get fined at tax time.

Here is who has an individual mandate in 2021:

• California
• District of Columbia
• Massachusetts
• New Jersey
• Rhode Island
• Vermont

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