2023 Medicare Open Enrollment Marketplace & Employer Plans
Cooler weather and leaves changing color hint at another meaning in the health insurance world — open enrollment season is around the corner. Whether it is a private employer-provided plan, a Marketplace Plan, or even Medicare, October and November are the months to seriously explore health insurance options.
The biggest health insurance news this year comes courtesy the Inflation Reduction Act, which extended the expanded federal subsidies for Affordable Care Act individual plans. Those subsidies were bumped up as part of the American Rescue Plan during the pandemic but were slated to expire this year. With the extension, those more generous tax benefits will continue at least through 2025.
The Inflation Reduction Act also gave Medicare the greenlight to negotiate the price for some prescription drugs, which is scheduled to begin for a handful of medications in 2023. The act also capped out-of-pocket costs for insulin and prescription drugs for Medicare participants.
So, as people begin to shop for their health coverage, this guide will serve as a checklist of what to look for, what to watch out for, and how to go through the process of signing up for coverage for another year.
Marketplace Plans
The Affordable Care Act provides policies for individuals and families who are not covered by employer-sponsored health insurance, which accounted for more than 35 million people at last count.
People shop for Marketplace Plans either through their state-sponsored marketplace or through the federal marketplace Healthcare.gov.
Affordable Care Act policies are provided by private insurers, following the guidelines set by federal law and regulated by each state’s insurance commissioner.
Affordable Care Act policies are offered according to “metal tiers” — platinum, gold, silver, and bronze.
Each metal tier offers the same quality of care. The difference between them is how much different services cost, what deductibles must be paid, and what co-insurance costs are shared by whom. Bronze plans offer the lowest premiums but the highest out of pocket costs, while platinum plan premiums are the highest but sport the lowest out-of-pocket costs, and so on. Applicants younger than 30 can also qualify for catastrophic plans, which pay very little for routine care, but offer a low-premium backstop against catastrophes for otherwise healthy young adults.
Marketplace plans are available to everyone, but subsidies are only available to people without access to employer-provided care and whose income is within specified ranges. Premium subsidies are on a sliding scale based on family income.
To enroll in a Marketplace Plan, families typically need to gather up all the vital data for each of the members of the household and anyone who is claimed as a dependent — that includes names, dates of birth, social security numbers, as well as the most recently filed tax returns and expected income and earnings for the coming year.
Open enrollment for Marketplace Plans begins Nov. 1 and runs until Jan. 15, however, for coverage to begin in full force by Jan. 1, families need to enroll by Dec. 15.
For 2023, analysts expect premiums to rise by about 10%, though each policy’s pricing depends on the state of residence among other factors.
If families who were previously enrolled in a Marketplace Plan take no action, they will most likely be rolled over and continue their current coverage in their previous plan, but experts strongly discourage just letting coverage ride from year to year. By going through the open enrollment process in full each year, families are able to ensure they are not only in the best plan for their situation, but also that they are claiming all the potential premium subsidies they are eligible for.
Employer Plans
As a rule, employers with more than 50 people working fulltime must offer health insurance that complies with the minimums set out in the Affordable Care Act.
Employer plans also typically follow similar “metal tiers” found in Marketplace Plans, offering the same level of service at every tier, but with higher tiers trading higher premiums for lower out of pocket costs.
Although many employer plans set their open enrollment periods to coincide with the Marketplace Plan open enrollment, that is not strictly a requirement, and open enrollment can correspond with whenever the plan year ends.
The general rule for which plan works best often comes down to the expected health care usage for each family.
Families who have chronic health conditions often opt for higher premiums, because at the end of the year, the lower out of pocket costs for each service coupled with lower deductibles pay for the higher premiums.
But, unless there are specific health care concerns in each family, the medium, basic, or “silver” tier, (depending on the language of the policy) is often the best place to start comparing plans.
When it comes to employer-provided plans, not all plans are created equal. If both spouses work full time, it is possible that they both qualify for coverage from their own employer’s policy. How to handle that must be evaluated on a case-by-case basis. That is because employers typically offer large subsidies for their own employee’s health care but don’t always extend that same subsidy to their family.
So, the employee may only pay for a fraction of their own coverage, but then be on the hook for the full price for their family’s coverage. In that case, each spouse likely should take advantage of their own employer’s subsidy, and they should have two policies — one for each spouse.
On the other hand, some employers offer generous subsidies for both the employee and their family. In that case, a closer examination must be made to decide if one policy or two policies would be best..
And when it comes to the kids, it may make sense to put them all on one spouse’s policy as “family” coverage, or it may make sense depending on the way the subsidy is structured to split them up and have each spouse opt for the “employee and child” option, rather than the “employee and family” option.
As an additional wrinkle, some employers who do offer generous family subsidies also charge a surcharge for spouses who forego their own employer’s coverage and opt for their spouse’s plan. That said, even with the surcharge, the more generous subsidy may make it worth it.
The bottom line is that it makes sense to take a close look at all the options and combinations each year.
Other Coverage
Medicare has a similar window for enrollment each year, but instead of open enrollment, they call it the “annual enrollment period.” This year’s AEP runs from Oct. 15 to Dec. 7.
During that window, Medicare enrollees can switch between classic Medicare Parts A & B and instead opt for a so-called Medicare Advantage (Part C) plan managed by a third-party insurer. They can also switch back to classic Medicare if they so choose.
This is also the time to examine the prescription portion of Medicare — Part D. For some people, largely depending on what medications their doctors prescribe, classic Medicare along with the Part D option makes the most sense. For other people, an all-in-one Medicare Advantage plan, complete with a prescription drug policy included in it makes the most sense.
The other types of coverages many families encounter are the state-run Children’s Health Insurance Plan — CHIP, and Medicaid.
Both CHIP and Medicaid are limited by income restrictions and are designed to cover those with the lowest incomes. Medicaid and CHIP also have rolling enrollment, meaning families can enroll at any point, provided they qualify. They don’t have to wait for a particular time of year.
Other concerns
Families who miss out on the open enrollment periods may have to wait a full calendar year for another chance to sign up — with a few exceptions. There can be one more window to sign up for either a Marketplace Plan or an employer-sponsored plan, if they have a qualifying life event.
Qualifying life events are things such as the birth or adoption of a child, loss of a job, or a permanent move to another zip code. These special enrollment periods aren’t permanent, though, so families should act quickly if their life situation changes.
Another change in life event that families need to be aware of is if a child is about to move away for college.
In these cases, the coverage area of the family’s policy may or may not allow for their care while junior is away at school.
When it comes to employer plans, families may be allowed to pay to extend the coverage area. If the family is covered by a marketplace plan and the child moves out of state, the family may need to purchase a second plan for the child alone. In this case the costs for both the child’s and the family’s plans will be combined and considered when it comes to the maximum out-of-pocket costs used to calculate the family’s subsidy.
Another often-affordable option is a school-sponsored healthcare plan that many universities include in the cost of tuition — unless families opt out by proving they have coverage elsewhere.
Regardless of who is looking for coverage, one thing to be wary of is so-called short-term health insurance. Many states have begun allowing short-term policies, which are exempt from the guidelines set out by the Affordable Care Act. And while these often cost significantly less than ACA-compliant policies, they don’t tend to offer much coverage either. Before opting for a short-term policy, it is a good idea to talk to a knowledgeable insurance agent, or even a federally funded healthcare navigator to get a full understanding of what is, and what is not covered by that plan.
Final thoughts
There are more options for health care now than there were 20 years ago, and through a bit of shopping and by considering all the options available, families can make the most informed decisions to keep everyone covered.
But, as a general rule, when it comes time to think about Halloween costumes, it is a good idea to start looking out for a benefits packet at work or thinking about logging on to Healthcare.gov.
Michael Giusti, MBA, is a senior writer and analyst for InsuranceQuotes.com
