Upcoming 2021 Open Enrollment Changes 

Open Enrollment 2021 will start on November 1st, and the health insurance marketplaces will remain open until December 15th. 

President Trump made it clear that one of his primary goals while in office was to fix America’s broken healthcare system. After many failed attempts to repeal and replace the Affordable Care Act (Obamacare), it appears that these new CMS rules will attempt to fix the current system rather than dismantle the marketplace. Here are the key changes you should expect for Open Enrollment 2021.

More Flexibility For States & Essential Health Benefits

Under the new CMS rules, Open Enrollment will be bring some changes to Essential Health Benefits. Under the Affordable Care Act, there were 10 Essential Health Benefits that all marketplace plans needed to cover in order to be considered qualified coverage and meet federal and state regulations.

The new rule will give states more flexibility. Rather than selecting from the 10 Essential Health Benefits, states will be able build their own Essential Health Benefits for benchmark plans. States will be able to choose from the 50 Essential Health Benefit benchmark plans that were used in other states in 2017.

With fewer regulations on benefits, the new rule will give health insurance companies more flexibility. With more flexibility, the Trump administration is hoping insurers will get creative with their policies, bringing more competition and options to the marketplace for consumers.

Health Insurance Exemptions For 2021

The individual mandate was repealed for 2019. Meaning, Americans without health coverage in 2019 and 2020 will not be subject to a tax penalty.

The new CMS rules, titled in true Trump fashion, “Final 2019 Payment Notice Rule To Increase Access To Affordable Health Plans For Americans Suffering From High Obamacare Premiums,” could potentially save you from paying a tax penalty this year. The new rule provides exemptions to residents living in counties where no health insurance companies offer coverage, or only one insurer offers coverage. 

However, a handful of states have their own individual mandate: 

• California
• District of Columbia
• Massachusetts
• New Jersey 
• Rhode Island
• Vermont

You may be fined at tax time if you don't have health insurance in those states. 

Verification For Premium Tax Credits

The final CMS rule is also going to attempt to improve the integrity of the Advanced Premium Tax Credits (APTC) program. It hopes to do this by “implementing stronger checks” that would take tougher measures to verify anyone applying for Advanced Premium Tax Credits earn the income they claim. The new measure is also going to disqualify any applicant who fails to file taxes or reconcile prior APTCs.

Bring Stability To The Marketplace

The Medical Loss Ratio (MLR) was put in place under the Affordable Care Act, with the purpose of ensuring health providers offer value to their members. The Medical Loss Ratio is scored from 0% to 100%, and measures the amount of money from member premiums spent by health insurers on members’ claims rather than overhead costs. For example, if a health insurance company allocates $0.90 of every dollar to cover medical claims, and the remaining $0.10 to cover overhead costs, the MLR score for that insurer would be 90%.

Obamacare had what it known as the 80/20 rule, which meant health insurance companies were required to have an MLR score of at least 80%. For health insurance companies offering group large group coverage (usually to 50 or more people), that minimum score jumped to 85%. The new CMS rule is going to loosen the Obama era MLR regulations, helping “ease the burden” for health insurance companies. This would allow more companies to enter the marketplace, and create more competition in an attempt to drive down costs.

Changes To Rate Review

The last major takeaway from the new CMS rule is the change to Rate Review. Under the Affordable Care Act, insurance companies had to justify any premium increase of 10% or more, but that number jumped to 15% in 2019. Also, the CMS final rule will get state regulators involved in the Rate Review process, and exempt student health insurance plans from federal Rate Review requirements.

What are your health insurance options?

Depending on your situation, you have the following options:

Renew your current policy

During open enrollment, you can keep your current health insurance as long as it's still offered. You may not have to do anything if you want to keep what you have. But your current plan may be changing. Watch the mail for a letter about any changes your plan intends to make in 2020.

Changes might not be acceptable to you. For instance, your doctor could be leaving the network or your drugs won't be part of its list of covered medications. You want to look for a plan that better suits your needs. If you need to switch, open enrollment is the time.

Buy an individual policy through a marketplace or directly from an insurance provider

You may want to sign up on the marketplace exchange in your state. That includes if you qualify for tax subsidies to help you pay your premiums. Qualifying depends on your family size and income. To qualify, your family income must fall between 100% and 400% of the federal poverty level (FPL).

Based on this formula, for 2021 coverage for a family of four, the income bracket between 100% and 400% is $25,750 to $100,3000. If you or your family are under 400% of the federal poverty level, you can find subsidized health coverage. About three dozen states also have Medicaid expansion. Those states let people with incomes 138% of the federal poverty level to get Medicaid. That's a low-cost option that provides full health coverage. 

Make changes to your employer-based group health insurance

If you get your health insurance through your employer, the open enrollment period for the government-run marketplaces and Affordable Care Act plans won't affect you.

You need to sign up for coverage during your employer's open enrollment period. Some employers will automatically renew the plan you had this year. Others require that you sign up each year during its open enrollment. Employers often change health insurance providers, so make sure you review your offerings. It likely changed since last year. Ask your employer its rules so you know what you have to do.

Change your Medicare plan

If you are enrolled in Medicare and want to make a change in your plan – such as switching to Medicare Advantage (Part C) or adding prescription drug coverage (Part D) – you must sign up during its open enrollment period.

Medicare open enrollment is Oct. 15 to Dec. 7, and coverage starts Jan. 1. Again, open enrollment for the government-run marketplaces doesn't affect you.

Buy a short-term health plan (for a long time)

Short-term health insurance plans were previously only available to young people or those who couldn't afford any other kind of health insurance. Starting in 2019, all people were given access to short-term plans. 

Starting in 2020, many states offered short-term plans for up to 24 or 36 months which is technically longer than an ACA plan. Many additional states have added this option in 2021 and have enhanced benefits while maintained or even lowered prices.

These plans aren't nearly as generous as ACA plans. They don't have to cover basic services, such as maternity, prescription and mental health. So, you need to dig into a plan's specific coverage before going with a short-term plan. 

A benefit of short-term insurance plans is that they're much cheaper than other plans. However, they don't offer as much coverage so you may get stuck paying with more or all of healthcare costs for some services.