insurance

Employer Insurance Unfazed by Health Care Battle

Politics aside, employer plans won’t change much.

Despite warnings that Obamacare would implode if Congress didn’t repeal and replace it, the Affordable Care Act lives on. But even though the Senate couldn’t muster enough votes to dismantle the ACA, the 12 million people who buy health insurance on the exchanges face uncertainty—and several unresolved issues could affect availability and rates.

The vast majority of people—the more than 175 million workers who get health insurance from their employers—can rest easy. They won’t see big changes to their coverage for 2018. Large employers expect average health care costs to rise by 5% in 2018, to $14,156 per family, similar to increases in the past five years, according to the National Business Group on Health. Employers generally cover almost 70% of the cost, leaving employees to pay about $4,400 for family coverage. The spiraling cost of specialty drugs is primarily to blame for the increase.

Employers continue to make changes to their plans to help mitigate their costs, such as by raising deductibles and shrinking provider networks. When choosing a plan, make sure that your doctors are covered, and compare your out-of-pocket costs in addition to premiums. The median in-network deductible will be $1,300 for employee-only coverage and $3,000 for families, and nearly 40% of employers will offer only a high-deductible plan.

You can ease the pain of deductibles by signing up for a tax-advantaged health savings account, especially if your employer helps to seed it. Employers are offering a median contribution of $650 per employee and $1,070 per couple in 2018.

The Affordable Care Act has different rate-setting rules for small-employer plans (plans with 50 or fewer employees), which could be affected by any changes to the law. But many of these plans have locked in coverage for the next 12 months, or were “grandmothered,” which means they weren’t subject to all of the rules (in states where that’s allowed), says Suzy Alberts, an insurance broker in Southfield, Mich.

For individuals who buy coverage on the exchanges, the primary question is whether the government will continue to pay insurers cost-sharing reduction subsidies, which help cover deductibles and co-payments for lower-income people. Because of a federal lawsuit, the Trump administration could discontinue these subsidies without a vote from Congress. The resulting uncertainty has created huge disparities in insurers’ proposed rates on the exchanges. In Pennsylvania, the average rate increase in 2018 would be 8.8% with the subsidies, but 20.3% without them. The average 12.5% rate increase proposed in California could double without the subsidies. If premiums rise substantially, however, some people will qualify for bigger tax credits to offset some or all of the hike.

Rates must be finalized in early fall. “If we still don’t know at the time whether the cost-sharing reductions will be funded, we expect that insurers will use the higher rates,” says Janice Rocco, California’s deputy insurance commissioner.

The final plans and premiums for the exchanges will be revealed in early October. “There’s never been a more critical time to shop the marketplace,” says Heather Korbulic, executive director of Nevada’s Silver State Health Insurance Exchange.

You will also have less time to pick a plan. Open enrollment for 2018 runs from November 1 to December 15, instead of January 31.

Most Popular

Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy still in trouble, tax policy takes on added importance in the 2020 election. So, let's take a look at what Joe Biden wants to do abou…
October 22, 2020
How to Be Happy (Not Bored!) in Retirement – Starting Today
happy retirement

How to Be Happy (Not Bored!) in Retirement – Starting Today

Here are 12 ways to prepare now for retirement so that you’ll be happy, active, fulfilled and never, ever bored.
October 21, 2020
2 Credit Card Gotchas to Watch Out For
credit cards

2 Credit Card Gotchas to Watch Out For

After an infuriating wake-up call with her own credit card company, one financial services consultant wants consumers to know something: It’s smart to…
October 20, 2020

Recommended

How Much Insurance Should You Get? A Lawyer’s Advice
insurance

How Much Insurance Should You Get? A Lawyer’s Advice

The advice to “Only pay for what you need” sounds good. But when it comes to home, auto and business insurance coverage, four guidelines could help de…
October 12, 2020
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare.
October 1, 2020
11 Costly Medicare Mistakes You Should Avoid Making
Medicare

11 Costly Medicare Mistakes You Should Avoid Making

If you don't make the right choices to fill in the health coverage gaps, you could end up with high Medicare premiums and big out-of-pocket costs.
October 1, 2020
Your Guide to Open Enrollment
health insurance

Your Guide to Open Enrollment

Your options may look a little different this fall. Meanwhile, the cost of coverage continues to climb.
October 1, 2020