Newsletter

AFFORDABLE CARE ACT ENROLMENT BREAKS RECORDS

This video from Straight Arrow News quotes the White House as saying nearly 24 million people signed up for ACA health insurance as of December. However, the video also mentions that legislation will be needed to continue the current level of tax subsidies in 2026 and future years.  

HOW REPUBLICANS COULD CHANGE THE AFFORDABLE CARE ACT

President Trump stated in the Presidential debate that he no longer favored repealing the Affordable Care Act but has said that he favors efforts to make the ACA more cost effective.

This article that appeared in Inc. shortly after the election contains the best analysis we’ve seen to date on what might be in store for the Affordable Carre Act under the new administration.

We believe the following are possible changes that may be entertained:

1. Reduction of Affordable Care Act subsidies: ACA subsidies were improved under the American Rescue Plan Act (ARPA) and continued under the Inflation Reduction Act, but the enhanced subsidies are scheduled to sunset as of December 31, 2025. Percent of income requirements were lowered for all poverty levels, and those making over 400% of the Federal Poverty Level were limited to paying 8.5% of their income for the second lowest cost Silver plan in their area (this is referred to as the “benchmark" plan).  

Here is a comparison of the calculations used prior to ARPA and the calculations presently used to determine subsidies:

Subsidy Calculations—Before And After ARPA

(Households Making Above 400% Of the FPL Are Now Eligible For Subsidies)

Subsidies could revert back to what they were prior to passage of ARPA or otherwise modified. This means that there would be no subsidies to anyone making more than 400% of the Federal Poverty Level, and subsidies for those making between 100 and 400% of the Federal Poverty Level would be lowered.

2. There has been speculation that the Republicans may propose establishment of high-risk pools for people with expensive medical conditions (i.e., those with high-cost pre-existing conditions would pay higher premiums).

3. Some applicants have misrepresented their income to obtain higher tax subsidies. Republicans may propose some kind of penalty for misrepresentation or incorrect projection of income (i.e., an additional charge beyond the requirement to reconcile income against actual earnings). They may also restrict the ability of applicants to automatically re-enroll into Affordable Care Act plans from the previous year into the current year.

4. President Trump championed liberalizing the rules on short-term health insurance, but the Biden Administration established rules in September 2024 that limited duration of short-term health insurance to a maximum of three months plus a one-month extension. We expect one of the first changes the Administration will make is to liberalize the rules for short-term health insurance.

5. We expect the Administration to permit introduction of ACA plans that do not require plans to include all ten essential health benefits.

WHAT KIND OF PLANS ARE AVAILABLE NOW THAT OPEN ENROLLMENT HAS ENDED?

Affordable Care Act Open Enrollment ended January 15, and individuals and families must now experience a Qualifying Life Event to enroll for an ACA plan in 2025. 

The following alternatives are available for those who don’t have a Qualifying Life Event or who are looking for less expensive alternatives. Except for dental, vision, and hearing plans, all of these plans require answering some form of health or other questions and have pre-existing condition limitations. None of these plans provide tax subsidies (i.e., advance premium tax credits):

1. Group plans are available to individuals or families (either through Association membership or as independent contractors).

2. Limited benefit or fixed benefit indemnity plans. These are not traditional major medical plans and do not provide all ten essential health benefits required by the Affordable Care Act.

3. Supplemental plans such as critical illness, cancer, hospital indemnity, and accident plans.

4. Short-Term Health Insurance: short-term health insurance is available for a maximum of three months plus a one-month extension. Requirements and availability vary by state.

5. Medical cost sharing plans: these are uninsured programs where members share medical expenses. They are meant for healthy individuals who are willing to be more active in managing their health care. Monthly share contributions can be 50% or less than traditional medical insurance plan premiums. 

6. Dental, vision, and hearing plans. These plans can be bought on either an insured or discount plan basis.

None of these plans have restricted enrollment periods and all can be bought on a year-round basis. Please call us at 786-970-0740 if you are interested in one of these plans and/or if you need help in enrolling.

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.