HealthCare.gov to signup period extended into August

The Biden administration is giving consumers three extra months to sign up for health coverage through HealthCare.gov.

HealthCare.gov will be extending the current, broad COVID-19 emergency special enrollment period, which expires May 15, to Aug. 15.

The extension of the enrollment period to give consumers more time to understand and use the health insurance premium subsidy provisions in the new American Rescue Plan Act, the administration stated.

Related: American Rescue Plan Act: Impact on employee benefits

Consumers can use the enrollment period to apply the new subsidy increases to coverage that’s already in force as well as to apply for new coverage.

“The American Rescue Plan will bring costs down for millions of Americans, and I encourage consumers to visit HealthCare.gov and sign up for a plan before August 15,” said. Xavier Becerra, who was confirmed as the secretary of the U.S. Department of Health and Human Services last week, said in a statement.

American Rescue Plan changes

One temporary provision in the act will cap what ACA exchanges expect people to pay for exchange plan coverage at 8.5% of income. In areas where insurance premiums are high, that change may make ACA premium tax credit subsidies available to some families with $200,000 or more in annual household income.

That provision will start to take effect April 1.

Another provision in the act provides a big increase in premium tax credit subsidies for ACA exchange plan users who are unemployed. HealthCare.gov and other ACA exchanges will trea tthose users as if they had income at 133% of the federal poverty level.

That means that, temporarily, even high-income unemployed people may be able to get exchange plan coverage for an out-of-pocket cost that will be close to zero.

The extra premium subsidy for unemployed people will take effect in early July.

The extra subsidy for unemployed people can help “consumers who have received or have been determined eligible to receive unemployment compensation for any week during 2021,” officials say.

Other states

The new American Rescue Plan subsidy rules apply in all states, but the new enrollment period extension applies only in the 36 states that use the HealthCare.gov ACA exchange administration system.

States with a locally run exchanges can set their own enrollment schedules.

In California, for example, Covered California officials said last week, before the HealthCare.gov enrollment period extension was announced, that Covered California will offer a broad special enrollment period lasting from April 12 through the end of the year.

The background

Since Jan. 1, 2014, the ACA has prohibited issuers of major medical insurance from refusing to cover sick people, or from charging sick people more for their coverage.

From 2014 till the time the COVID-19 pandemic struck, health insurers, public exchange programs and regulators used an “open enrollment period calendar” system, or limits on when people could buy health coverage without showing they had what the government classified as a good reason to be shopping for coverage.

In recent years, many exchanges were using annualized open enrollment periods that ran from Nov. 1 through Dec. 15.

Exchanges and insurers hoped to push young people to buy coverage during the open enrollment periods, even if they felt fine, by raising the possibility that a 25-year-old could break a leg Dec. 16, and have no practical way to get help from health insurance with paying the bills.

Many have predicted that, without an open enrollment period system in place, healthy people will pay for coverage only in months when they’re worried about getting sick.

The open enrollment period system has not applied to non-ACA health insurance products, such as short-term health insurance, critical illness insurance and hospital indemnity insurance, but issuers of the non-ACA products can use other strategies to limit their exposure to health risk, such as rejecting people with health problems, excluding or limiting coverage for pre-existing conditions, and charging higher premiums for people with known health problems.

What enrollment period changes might mean

Up until now, America’s Health Insurance Plans and the Blue Cross Blue Shield Association have expressed support for use of long, broad special enrollment periods as a way to respond to the COVID-19 pandemic.

One implication of the new enrollment period changes is that insurers and regulators may move away from efforts to use an open calendar system to manage health claim risk.

Another implication is that companies that have focused on selling short-term health insurance, hospital indemnity insurance and other non-ACA products outside the open enrollment period may end up facing year-round competition from sellers of fully ACA-compliant major medical insurance.

(Image: Igor Negovelov/AdobeStock)