Nov 11, 2022
Whether you belong to a health care plan at work or buy insurance on the open marketplace, the clock is ticking on your coverage plans for 2023.
The next several weeks mark your one chance this year to lower your premiums, raise (or lower) the level of coverage you pay for, and make sure your preferred doctor is part of the plan.
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It’s an especially important time of the year, because health care plays a large role in your overall personal financial picture. Premiums eat away at the size of your paycheck. Deductibles can have a huge impact if you get sick or are injured.
If you belong to an employer plan, investments in tools like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) can carry significant tax advantages and keep you ready for a rainy medical day.
But while there are an assortment of options at every price point, just about everybody opting to keep their health care choices the same in 2023 will end up paying more out of pocket. Here’s why.
There’s some good with the bad
As of early 2022, the Kaiser Family Foundation (KFF) says 16.9 million people have signed up for individual market coverage through the marketplace.
Heading into the 2023 open enrollment period, the KFF’s Affordable Care Act researchers anticipated this period “could be among the busiest yet” with marketplace enrollment “at a record high.”
And this year, unsubsidized plans are going up across the country. That shouldn’t be a huge surprise to those who use the marketplace: Annual increases were a fact of life before today’s inflationary economy.
But this year even companies that had been able to maintain steady premiums and/or deductibles are giving in to higher costs and passing those down to you.
Don’t panic. For marketplace buyers especially, there are some beneficial changes that could soothe some of that inflationary sting.
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The KFF adds that it may take some leg work, but some of the other planned changes this year may help shield Americans from those higher prices.
Better premium subsidies
The Inflation Reduction Act provides key relief through increased subsidies for people who buy their own coverage through the marketplace. The act both increases the amount of financial help available to those who are already eligible and expands subsidies to middle-income earners — many of whom were previously priced out of coverage.
Crucially, the act also removes the so-called “family glitch” that left an estimated 5.1 million Americans ineligible for subsidized insurance policies in the past.
Now, if an employee has access to an employer-based insurance plan that is considered affordable for a single person (meaning the premium is less than 9.12% of your income), it won’t necessarily disqualify their family members if it’s not affordable for the household as a whole.
This is important because the highest allowable out-of-pocket limit goes from $8,700 in 2022 to $9,100 in 2023. Every little bit of subsidy will help.
Plenty of choices, and help understanding them
More enrollees — an estimated 92% — will be able to choose from three or more qualified health plan issuers, up from 89% this year.
But more choices can make the task of picking a plan that much harder. Consumer advocates have hailed restored funding, after cuts during the Trump Administration, for navigator programs which help consumers — especially in marginalized communities — make better choices and even complete applications for financial help for coverage in the marketplace.
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Act now
If you’re considering what the marketplace offers, you have until Dec. 15 to pick a plan that begins coverage on Jan. 1, 2023.
A second deadline exists, Jan. 15, to start coverage on Feb. 1.
If you’re ready to getting going on the search for insurance, the healthcare.gov website contains helpful links and tips about the marketplace, along with a handy checklist of things you’ll need when you’re ready to enroll in a plan.
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
