By and large the Affordable Care Act, which you probably know best as Obamacare, had as bifurcated of a start as you can imagine. At its low point Obamacare was running well in excess of 1 million enrollees behind schedule due to technical glitches in the software that supported Healthcare.gov, the federally run health exchange marketplace. By the time enrollment closed at the end of March, Obamacare had enrolled more than 1 million people beyond the initial estimates offered by the Department of Health and Human Services.
However, Obamacare's ultimate success or failure isn't going to be determined by the number of people it enrolls in a single year. Instead, Obamacare will ultimately be weighed by how well it controls medical cost inflation over the long run and how successful it is at continuing to lower the uninsured rate.
For consumers, though, each year is essentially a new beginning as a number of factors are subject to change, including insurance rates. Today we'll take a look at three things you need to be aware of when you're enrolling for Obamacare in 2015.
No. 1: This year's open enrollment starts more than six weeks later than last year.
The first big change that you may or may not be aware of is that the open enrollment date is much later this year than it was last year. If you recall, Oct. 1 was the first day you could enroll for 2014. This year Nov. 15 will be the official kickoff for 2015 enrollment.
Ask around and you're liable to get plenty of opinions as to why this date was chosen, but I suspect it boils down two particular reasons. First, we have midterm elections during the first week of November, and the elections could act as an unnecessary distraction for consumers. Secondly, it'll give Accenture (NYSE:ACN), the company responsible for ensuring the functionality of Healthcare.gov, plenty of time to test its software and handle additional integrations for 2015.
In other words, you only have three months to enroll in 2015!
No. 2: You'll automatically enroll in the same plan unless you do something about it.
Here's something I'd venture a guess you probably didn't know: If you don't opt out of your existing health plan or choose a different plan, you will be automatically enrolled in your existing insurance plan for another year. If most Americans are anything like me (where they tend to let their bills be paid by auto-debit) it's quite possible we could have a number of surprised auto-enrollees.
In addition to auto-enrollment, the premium you'll pay is likely to change. Right now you're probably thinking, "Tell me something I don't know!" Well here's that something: if you enrolled in the cheapest bronze plan you could find in your state last year there's a really good chance that your plan is no longer the cheapest this year.
According to a recent study released by the Kaiser Family Foundation, out of the 16 locales it's received complete premium data on (15 states plus Washington D.C.), 12 had a new lowest-priced plan for 2015. The reasoning behind these fluctuations likely has to do with the emergence of additional competition on the exchanges as well as having a number of first-time participants in the individual insurance market last year that have had to adjust their pricing for 2015.
The lesson here is that if you're trying to pay close attention to your premium costs in 2015, you'll need to be proactive about searching the exchange in your state for the best rates.
No. 3: The penalty for not having insurance will, at minimum, double.
Lastly, if you choose not to purchase health insurance in 2015 be prepared to open up your wallet significantly wider than you did in the previous year.
If you recall, penalties for violating the individual mandate – the actionable component of the ACA that requires citizens to purchase health insurance – in 2014 was the greater of $95 or 1% of your annual income. In 2015, those penalties will jump by somewhere between 100% and 242%, with the non-compliance penalty being the greater of $325 or 2% of your annual income.
On a side note, keep in mind that you won't be taxed 2% of your annual income if you make a million dollars for example. The most you are on the line for as a citizen is the annual cost of a bronze-level plan. Similarly, there are a number of ways a citizen can be exempt from this penalty, including situations where there is an economic hardship, as well as in situations where you'd be forced to pay too much of your annual income toward your healthcare premiums. The point being, if you aren't planning to sign up for health insurance, prepare to pay a steeper fine when you file your taxes in April 2016 for the 2015 year.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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