Obamacare: A Guide for the Self-EmployedBy
Open enrollment for 2015 health insurance under the Affordable Care Act starts this Saturday, Nov. 15. Here’s what self-employed business owners should know.
Will the online signup system actually work this year?
“One would hope so, but all we can do is guess until it actually goes live,” says Michael Mahoney, senior vice president at GoHealth, a private health insurance exchange that facilitates signups through the state and federal marketplaces. “We’ve been working hand-in-hand over the summer and they’ve made a lot of improvements. Of course, the bar was set really low last year.”
Does that mean self-employed people should give the federal or their state marketplaces a try?
Well, if they don’t, they could miss out on the government subsidies that a majority of marketplace enrollees took advantage of this year, according to the Department of Health and Human Services (PDF). Individuals making up to $46,680 and families of four making up to $95,400 annually could be eligible for a tax credit to reduce their monthly premiums.
That’s the carrot. Here’s the stick: The penalty for not buying insurance is going up. The $95 penalty in 2014 wasn’t enough to persuade some uninsured people to wade into the marketplaces and buy coverage. In 2015, that number goes up to $325 or 2 percent of household income, whichever is greater. “When you look at how much pay you have left after rent, your cell phone bill, and other fixed expenses, spending 2 percent on a penalty”—and still not having insurance and preventive care—is a bad deal, Mahoney says.
How happy have first-year enrollees been with their coverage?
They got comfortable with insurance exchanges more quickly than expected, according to a survey released in October by consulting firm Strategy&. More than half said they were highly satisfied with the experience of buying on an online health-care exchange; 22 percent reported dissatisfaction. The majority, including 57 percent who purchased their coverage on a public exchange, say they’ll stick with the same insurer next year.
How happy will they be when their rates go up?
The website is open now for shoppers to browse 2015 plans and rates. Unless you live in a rural area dominated by one insurance carrier, rates will probably go up 5 percent or less. An Urban Institute study (PDF) compared 2015 silver plan rates released so far in 17 states and Washington, D.C. The report found that average rates for the cheapest silver plans will go down in six states, rise 5 percent or less in 10 states, and increase more than 5 percent in two states.
More competition for patients often means better rates. “A lot of health insurance companies sat on the sidelines last year waiting to see how things would work out. Now there are 77 new insurers entering the marketplaces, which means a 25 percent increase in plan availability,” Mahoney notes.
What if you slogged through enrollment last year and can’t bring yourself to do it again?
Do nothing and you’ll automatically be reenrolled in your existing plan on Dec. 15. Sounds easy, right? But experts recommend shopping around. Maybe there’s a cheaper plan with better coverage available this year. Or maybe your income changed and that will affect your subsidy for next year. Worse yet, if the plan you had this year isn’t available next year, the system will enroll you in a similar plan and notify you after the fact. “If your doctor isn’t in the [new] plan, you’ll lose your doctor” under that scenario, Mahoney says.
So, no more uncertainty—Obamacare is here to stay, right?
Not so fast. About 7.1 million people got 2014 health coverage through the Obamacare marketplaces; the Department of Health and Human Services estimates that between 9 million and 9.9 million people will get marketplace coverage in 2015. But the new Republican majority in Congress is still talking about repealing the law. Though that would surely meet a veto from President Obama, a more serious development could throw the ACA into disarray. The U.S. Supreme Court said last week that it will hear another challenge to the law that could end subsidies for people in states that didn’t build their own health insurance marketplaces. Stay tuned.