This week on Saturday, November 1st, the annual open enrollment period for individual health insurance plans will begin in almost all states across the United States. Millions of people will start choosing their health insurance plans for the upcoming year. However, this year’s enrollment season is heavily influenced by politics, as the healthcare insurance market faces triple pressure of rising premiums, reduced assistance, and government shutdown.
Due to the deadlock between the Democratic Party in Congress, pushing for an extension of the enhanced healthcare insurance tax credits introduced by the Biden administration during the pandemic, and the Republican Party demanding the government to resume operations before negotiations, both parties are at an impasse, leading to the federal government shutdown since the beginning of this month.
It is expected that many individuals will face the largest premium increases in years and may be forced to switch insurance plans.
Here are the issues that enrollees are currently facing:
In most states, individuals can select their insurance plans for 2026 until January 15th of next year; however, if they wish to have coverage starting from the beginning of the year (January 1st), they must complete their selection by December 15th.
For those purchasing individual insurance, this is the prime opportunity each year to choose a plan for the following year.
Individuals can purchase new insurance with income-based tax credits through insurance exchanges set up by each state. The Biden administration had expanded subsidy eligibility and amounts during the COVID-19 pandemic, enhancing the tax credit incentives. However, unless there is an agreement between the two parties in Congress to extend these tax credits, they will expire by the end of this year.
Enrollees can also seek insurance plans outside the marketplace, which may have lower premiums but do not qualify for tax credit subsidies.
The Kaiser Family Foundation (KFF) stated that premiums are expected to increase by an average of about 20% next year. However, if the current tax credits expire, some individuals could see their premiums more than double.
The increase in premiums is due to rising healthcare costs, which is a major concern for Americans. Insurance companies have priced in the assumption that the enhanced tax credits will not be extended, and individuals who have been paying very low premiums in 2025 may not renew their coverage next year due to the rising costs.
Karan Rustagi, a healthcare actuary at the Wakely Consulting Group, mentioned that even if Congress reinstates the enhanced tax credits before the enrollment period ends, premiums may not adjust immediately. Insurance companies require several weeks to finalize rate approvals with regulatory agencies and update their systems and customer service materials.
The Centers for Medicare and Medicaid Services (CMS) cut funding for a federal program by 90% in February. This program was responsible for providing navigators who help individuals find suitable insurance plans. This reduction will result in over 20 states reducing free assistance, as these states rely on the federal government to operate their healthcare insurance markets.
This move will make it more challenging for first-time insurance buyers who need to estimate income to apply for tax credits to choose a health insurance plan. For seasonal workers and individuals with fluctuating incomes, this task becomes particularly daunting.
In the absence of navigators, healthcare insurance brokers or agents can also offer assistance. They are compensated by the insurance companies with commissions, which are typically a fixed fee.
Enrollees can view the available options in their state’s insurance marketplace. Visit healthcare.gov to access the platform.
Sara Collins, an insurance expert at The Commonwealth Fund, recommends starting the process from this website instead of using Google. A Google search might redirect you to someone selling limited short-term insurance plans.
Joshua Brooker, an independent insurance agent in Lancaster, Pennsylvania, suggests starting by completing the tax credit application. This will help determine if you currently qualify for subsidies. If the enhanced tax credits are extended, the subsidy amounts will automatically update.
Next, choose an insurance plan. Look beyond just premiums and consider potential out-of-pocket costs, the network of doctors and hospitals included by the insurance company, and the coverage for prescription drugs.
Do not wait for the resolution of the tax credit dispute, as it may not be resolved within your enrollment period. If the dispute is resolved, you can always opt to change your plan.
Insurance agents point out that many people procrastinate on enrolling, making it harder to get assistance as the deadline approaches.
(Adapted from the Associated Press report)