Recent Healthcare Marketplace Important Changes

The Healthcare Marketplace Special Enrollment Period (SEP) has been modified because of an executive order signed by President Biden.  On March 23 it was announced that the Centers for Medicare & Medicaid Services (CMS) will be extending the SEP by three months to give consumers more time to purchase coverage. The SEP began on February 15 and was scheduled to end on May 15, but now the May 15 date has been extended to August 15, effectively giving consumers a six-month enrollment period.  This extended enrollment period allows consumers to take advantage of the benefits of the additional premium tax credits included in the American Rescue Plan.

The Healthcare Marketplace is currently available in 36 states. The remaining states have state-level marketplaces and consumers in these states need to check their state’s website to see how the SEP affects their plan.

According to the March 23 press release from CMS:

“Every American deserves access to quality, affordable health care – especially as we fight back against the COVID-19 pandemic,” said HHS Secretary Xavier Becerra. “Through this Special Enrollment Period, the Biden Administration is giving the American people the chance they need to find an affordable health care plan that works for them. The American Rescue Plan will bring costs down for millions of Americans, and I encourage consumers to visit and sign up for a plan before August 15.”

A Brief Explanation

This is wonderful news for those people struggling with their situations during the pandemic – not only is the availability of healthcare plans extended, but the costs are reduced through premium tax credits included in the American Rescue Plan. Based on information from CMS, premiums after these new savings will decrease, on average, by $50 per person per month or by $85 per policy per month. Four out of five enrollees will be able to find a plan for $10 or less/month after premium tax credits, and over 50% will be able to find a Silver plan for $10 or less. Coverage for those who enroll during the special enrollment period will start on the first day of the next month. And those who are currently enrolled will be able to change their plans as well during the SEP

To further explain how this works – The Marketplace premiums and tax credits are based on the Federal Poverty Level scale (FPL). The entire scale is available on the website. To give an idea, the FPL for a family of four is $26,500 for 2021. Families with household incomes between 300 and 400% of the federal poverty level (FPL) will not have to pay more than 8.5% of their income for the second-lowest-priced silver-level plan in the marketplace, which, of course, is the reference plan that determines the amount of the premium tax credit. Previously, these families were capped at 9.83% of their household income.

Now, even people with household incomes above 400% of the FPL will be capped at 8.5% of their income for the benchmark plan. Previously, there were no tax credits for people who earn more than 400% of the FPL, so this is a huge development that should make it much easier for consumers to purchase plans who were previously struggling with high premiums.

Sometimes the information available can be confusing as to how it applies to your particular situation. With this extra time thanks to the SEP, you can educate yourself and be sure to make the right choices. For more detailed information on these recent updates and changes, you can contact us and speak to a licensed specialist who can fully explain what your options are.

Healthcare Solutions Team is a wholly owned subsidiary of the National General Insurance Group and the Allstate Insurance Company.