Ultimate Guide to Buying Health Insurance for 2020

Buying health insurance is not an easy job. You have to look at numerous healthcare plans and find out what makes you eligible for one. The good news is that the year 2020 will not bring any significant change in the premiums. This does not mean that the rates didn’t increase! The change is, or shall we say ‘will be,’ not too drastic.

 

 

So, what’s driving up the healthcare cost?

Prescription drugs and medical services! With technological changes on the rise, a new mix of medical services that required a lot of work hours can now be done in just a few hours. Plus, the specialty drugs still cost too much. With medical problems on the rise, the need for in-patient and out-patient has risen significantly. Hence, it’s more imperative than ever to buy health insurance for the next year.

Here’s a quick recap of the Open Enrollment Period for the next year’s healthcare coverage:

• Early signs are that the increase in rates will be modest
• The plan will take effect on the 1st of January (if you are not qualified for a plan, you should consider buying a short-term plan for the remaining 3 months of 2019)
• If your application proves that you are eligible for reductions such as cost-sharing, then you will receive in the next year’s plan too
• You won’t be subjected to any penalties for not having a healthcare plan. However, you should still buy coverage
• There won’t be any widespread promotion by the Trump Administration regarding the open enrollment 

Plenty of cuts have been made in the enrollment assistance program by the Trump Administration. So, don’t expect to see any sort of marketing. Until this administration is in action, things will continue as they are. The funding for Navigator programs is already down to $10 million from $63 million. Since these programs helped US citizens find out which health insurance plan will work best for them, there’s a lot of confusion right now. This guide will tell you all about the 2020’s health insurance Open Enrollment Period.

Let’s talk options. There are two ways to get Obamacare: you can either change your plan or enroll in a completely new one. But first, you will have to qualify for the Special Enrollment Period. Since the 2019 Open Enrollment Period is over, you can make the changes through a marketplace plan. There are certain circumstances that make you eligible for this. Let’s go over them in detail:

 

Changes in Household

 

You will qualify for the Special Enrollment Period if anyone in your house has gone through the following changes in the last 60 days:

Got Married: Send in the application by the end of the month and the cover will kick in the next day from the 1st.

Adopted a Child/Had a Child/Took in a Kid for Foster Care: The cover will kick in the moment you have the baby or the kid through foster care.

Legally Separated/Divorced – Lost Health Insurance: If you got divorced but still have your health insurance, then you are not eligible for the Special Enrollment Period.

Death: If someone on your current marketplace plan has died and left you in a lurch, then you qualify for the Special Enrollment Period. This is only possible if you no longer have your previous health plan.

 

Changes in Residence

 

The following household moves make you eligible for the Special Enrollment Period:

• If you bought a new house and are moving to another state or country (if the ZIP code changes, so does the plan)
• If you are moving from a foreign country to the US
• If you are moving to a new place after finishing school
• If your work takes you places, where you not only work but also settle for a couple of years
• If you are moving from a shelter to a house

Note: If you are moving to a medical treatment facility or changing houses for vacation, then you will not be eligible for the Special Enrollment Period.

In order to make sure that you are indeed enrolled for the cover, you have to give proof of the previous health coverage, which you had in those 60 days. Here, you don’t have to give proof about your move to the US from a foreign country.

 

You Lost Your Health Insurance

 

If anyone in your family lost health coverage in the last 60 days, or might lose it in the next 60 days, then they are eligible for the Special Enrollment Period.

Following situations make you an eligible candidate:

• If you lost coverage provided by your workplace
• If you lost health coverage that you bought yourself
• If you lose eligibility for Medicaid, Medicare or the Children’s Health Insurance Program (CHIP)
• If you lose coverage due to one of your family members

 

More Qualifying Changes

 

A few other circumstances make you eligible for the Special Enrollment Period:

• Life changes due to which you are not eligible for CHIP or Medicaid anymore
• If you gain membership in the Alaska Native Claims Settlement Act (ANCSA)
• You just became a US citizen and qualify for Marketplace coverage
• Leaving incarceration
• Ending or starting service as NCCC, VISTA or AmeriCorps State and National member

 

Open Enrollment for 2020

 

The Obamacare, also known as the Affordable Care Act, is still causing confusion and making headlines. After 2 years of steep rate increases and carriers exiting markets, 2019 proved to be a great year. The increase in rates was lower than what people saw in 2017 and 2018. While the 2020 proposals are not available everywhere, they are shaping to be modest, with an increase that is less than 4%.

 

The Start and the End

 

 

The open enrollment will start on the 1st of November 2019 and end on 15th December 2019. Colorado and California have extended their enrollment date and other states might follow the same line. The enrollment process is not that different from what people went through in 2019. However, if you are a resident of Nevada, you will be a little surprised. The state has decided to create its own enrollment platform instead of going with HealthCare.gov.

 

When Will the Plans Take Effect?

January 1st, 2020

 

No matter when you buy the plan during the Open Enrollment Period, it will take effect on the 1st of January 2020. However, if you currently have a market plan and are trying to enroll for a new plan, then your previous plan will come to an end on 31st December 2019. It will be a smooth transition if you make the remaining premium payments on time.

In the case where you are not insured, the cover will take effect after 2 months of approval. There’s no need to panic. In the mean time, you can go for a short-term plan to bridge the gap. The good thing about these plans is that they take effect the next day after your purchase. If you do end up having an emergency, you will be covered for the months of October, November and December. 

You are probably wondering what will happen to your ACA-compliant plan. As mentioned earlier, the enrollment for the ACA plan starts on 1st November. You can purchase a short-term health insurance plan on the same day. This plan will cover you for 2 months and on the 1st of January, the ACA plan will kick in.

 

Premium Subsidies Will Fall In Line With the Standard Plan Cost

 

In terms of premium subsidies, 2020 will prove to be the most beneficial. In ACA, the subsidies are designed in such a manner that they will keep up with the benchmark plan cost. A rise in the premiums will also bring a rise in the premium subsidies. In 2018, the groundwork was laid down for this design. This happened due to the difference in the handling of cost-sharing reductions (CSR) for the loss of federal funding. Each state handled this differently. For example, in Delaware and Colorado, insurers were told to spread the CSR cost across premiums, but it was supposed to be added to silver plans only. This resulted in larger premium subsidies.

This design will continue in 2020, which is why now is the best time to look in to ACA. You might want to check your eligibility chances once more, just to be sure that you qualify. With a small but steady rise in poverty levels every year, the subsidy eligibility with regard to the income cap has risen. In 2020, the cost will be $13,000 for families with just four members.

This is why it is important to shop around. Your current plan might not give you the subsidy you are looking for, which indicates that it’s time to look for a different plan. As said earlier, you will keep receiving the CSR benefits, even though the federal government is no longer funding this design. However, state regulators and insurers have figured a way around it. The benefits are being added to the silver plan premiums. You can know all about the ACA’s cost-sharing subsidies here.

Here’s an example of how your subsidy is calculated:

Let’s assume that you live in Hartford, Connecticut.

• ZIP Code: 06100
• Age: 60 years old
• Family Members: 4

*Modified Adjusted Gross Income (MAGI): $75,000

Subsidized health insurance through the marketplaces is calculated using a household’s MAGI.

This is what you need to calculate your MAGI:

Include

• Wages, salaries, tips, etc. 
• Taxable interest 
• Taxable amount of pension, annuity or IRA distributions and Social Security benefits
• Business income, farm income, capital gain, other gains (or loss) 
• Unemployment compensation 
• Ordinary dividends 
• Alimony received under settlements executed before 2019 
• Rental real estate, royalties, partnerships, S corporations, trusts, etc. 
• Taxable refunds, credits, or offsets of state and local income taxes 
• Other income (this does not include veterans’ disability payments, workers’ compensation and child support, pre-tax contributions like those for child care, commuting, employer-sponsored health insurance and retirement plans such as 401(k) and 403(b))

Deduct

• A few self-employed expenses
• Student loan interest deduction 
• Educator expenses
• Penalty on early withdrawal of savings 
• Health savings account deduction 
• IRA deduction (traditional IRAs) 
• Moving expenses for military members who are active
• Alimony paid under settlements executed before 2019 
• Certain business expenses of reservists, performing artists, and fee-basis government officials 

 

Estimated Annual Subsidy

$3,547

 

 

No Penalty – Hurrah!

 

No more penalties… that is what 2020 will bring. There’s a catch. Yes, you will not be charged with a penalty for not having a health insurance— however, this applies to only those states that are following the standards set by HealthCare.gov. States that have their own individual mandate have different rules.

Individuals will not face a penalty— however, organizations will. 

Employers who fail to offer healthcare Coverage to 95% of their full-time employees will face a penalty of $2,570. The penalty will come into effect if the employer has 30 employees working under him. This amount represents an increase of 2.8% as compared to the 2019 penalty amount of $2,500. 

If the coverage offered fails to offer minimum value coverage, then the penalty will be $3,860 for each employee. Since these employees are being forced to buy healthcare from an ACA marketplace, the employer will be held liable on the grounds of neglect. This amount represents an increase of 2.9%– compared to the 2019 penalty amount of $3,750. 

To conclude, all signs point out that you must buy healthcare coverage. With so many benefits being offered for the New Year, buying healthcare insurance will be in your favor. If Medicaid is not in your cards, then it’s possible that you might qualify for CHIP. The state agency will send you information immediately after renewing your Medicaid application.

If you don’t want to enroll in the ACA, then you have the option of a short-term plan. In 2018, changes were made to such insurance plans. The initial duration of a short-term policy is one year. However, the renewal option allows the insured to extend the period by 2 years. 

It’s worth repeating — get that coverage, ASAP! The Open Enrollment Period comes around only once a year. What if you have an emergency the next year, which brings with it huge medical expenses? You will have to wait an entire year to enroll in the ACA. In the meantime, you will have to buy an insurance policy from somewhere else. But there are drawbacks to these plans and you need to be extra careful when reading the contract.

If you are looking for a high-rated insurance company, then visit Pawson. The company provides different types of health insurance policies for families and individuals. To know more about their policies, contact them at 203-481-8898.