Open enrollment for 2017 Obamacare health plans is taking place through Jan. 31. If you’re one of the 13.8 million people who will shop for your own health insurance this year, here are five important things to know.
1. This is the time to shop
After Jan. 31, you won’t be able to purchase a health plan unless you have a qualifying life event such as a marriage or a new baby.
“Given the option, most people wouldn’t purchase health insurance until they need it,” says Tom Mulnix of Upshaw Insurance Agency in Richardson, Texas. A specific enrollment period exists so people don’t wait to buy health insurance until they need to make claims, Mulnix says.
Current federal law requires almost all Americans to have health insurance. It’s possible that Obamacare will repealed by the end of 2017, but for now the lawful choice is to choose a plan by the deadline.
2. There’s a penalty for not buying health insurance
You’ll pay a tax penalty for not having health insurance when you file for the tax year. For 2016, the penalty was 2.5% of annual modified adjusted gross income, or $695 per adult and $347.50 per child, whichever is higher. For 2017, the flat rate will go up.
The Obamacare penalty kicks in if you go three or more full, consecutive months without insurance. But it’s important to note that:
- Only full calendar months count against you, such as all of January, February and March.
- If you have insurance for one day in any month, that counts as a month with health insurance.
3. You only get subsidies if you shop on an exchange
Rates are going up an average of 22% this year for silver Obamacare plans on the Affordable Care Act exchanges, the Department of Health and Human Services says. Of the bronze, silver, gold, and platinum plan levels offered on the exchanges, the majority of consumers — 70% — choose silver.
Many ACA plan buyers won’t see a big increase; 84% received tax subsidies to lower their premiums this year. Higher monthly rates mean higher subsidies, so if your premium goes up, so will your subsidy.
To get subsidies, you have to purchase your plan on the federal exchange or your state’s exchange (depending on where you live). All exchanges can be accessed from Healthcare.gov.
4. Don’t count on keeping your current Obamacare plan
Health insurers are canceling their plans in many areas, leaving consumers with fewer choices for 2017. If you have a health plan from 2016 that’s no longer going to be available, it’s your insurer’s duty to notify you. If you have a 2016 health plan that will be available again in 2017, you may be automatically re-enrolled if you don’t choose a new one by Dec. 15.
Even if your plan was the cheapest choice for 2016, it might not be the cheapest in 2017.
5. Pick a plan by Dec. 15 to start coverage Jan. 1
If you want coverage starting New Year’s Day you must purchase a plan by Dec. 15. Plans purchased after that might not be in force until Feb. 1 or later.
Even if you think you can skip coverage in January, don’t wait until the last minute to pick a plan, advises Susan L. Combs, a New York City insurance agent authorized to sell ACA plans in 27 states.
“If you have to call an insurer and ask any questions on the last day, you’re going to be waiting on the phone for hours,” she warns.
Signing up isn’t the last step
Even after you sign up for a health plan, you have to pay your first premium to activate the plan. This year, 13% of consumers who signed up for plans on the exchanges lost coverage in the first three months because they didn’t pay their first premium bill, a government report says.
Make sure you pay your premium on time so you’re enrolled in the plan.