Despite the ongoing COVID-19 pandemic, personal and family health insurance rates are staying stable going into 2021. In fact, it’s the third year in a row of premiums barely moving in most areas, while the number of insurers writing policies in the personal market continues to grow.
According to the ACAsignups.net website, which tracks enrollment, the average requested premium increase for 2021 is 2.1%, and in 18 states where regulators have approved rate hike requests, the average increase was just 0.4%. Under Affordable Care Act rules, each summer insurers must file proposed rates for the next year with the states they operate in. Some states take a hands-off approach to these filings, while others are more stringent.
Another study, by the Kaiser Family Foundation, also predicted a median rate increase across all individual and family plans of 1.1%, with no effect from the pandemic. Premiums are even decreasing in some states, like in Maine where the average individual and family plan rates are dropping by 13%. Other states, like Indiana, are seeing a 10% increase. Still, the average is expected to be in the 2% range.
Tips for open enrollment
Even if your health plan’s premiums for 2021 are stable or only slightly higher, you should still take the time to look at other plans. During the last few years, many markets across the country have seen an influx of insurance companies willing to offer health coverage. Some of those insurers are re-entering markets that they had abandoned when they thought offering health insurance in select areas would be a money-losing proposition. But it turned out not to be the case.
Understanding how subsidies are determined
For people who receive subsidies on health insurance exchanges, they need to be aware that they are tied to their region’s benchmark plan. Every region has one plan that is the benchmark for all the other plans on offer: the second-least expensive silver plan. If the cost of that plan goes down compared to this year, subsidies for all the plans will decrease, regardless of if they cost more. To avoid any subsidy or rate swings, some people stick with the benchmark plan.
Update reported income
It’s also important that members remember to update their income. This is especially important this year as many people have seen their incomes take a hit. If you’ve seen your income fall, you could be eligible for a larger subsidy, so make sure to update your financial info.
Check provider networks and formularies
Even if you plan to stay with your current plan, always check to make sure your doctor is still in the network and check the covered drug list to ensure any medications you need are still covered. If you are looking to switch plans, it’s even more important that you do this.
Review changes to cost-sharing
Additionally, check any changes to deductibles, copays, and coinsurance as they may change without notice on your plan. As always, a lower premium usually means a higher deductible and more out-of-pocket expenses on your part.
Interestingly, insurers are not citing COVID-19 treatment costs in their rate filings. That’s likely because health insurers have actually been paying out less in the aggregate in 2020 because of people delaying care out of fear of going to hospitals during a pandemic. Even so, your plan may be facing changes this year and it’s important that you understand any potential financial repercussions from those changes.