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How Can You Protect Yourself from Medical Debt? #GetCovered

Eva Stahl

Health insurance open enrollment season is in full swing. The Affordable Care Act (ACA) Marketplaces opened their doors for business on November 1st and will stay open until January 15th, 2023. In some states, the enrollment season is longer — a handful of states have extended the open enrollment permanently (see a full list of deadlines here). At Undue Medical Debt, we know that having comprehensive health insurance can help people avoid medical debt. While there is no full-proof way to avoid the high cost of our health care system, comprehensive health insurance and a good understanding of what it does and does not cover are key to staying financially, mentally and physically healthy. Research shows that there are a lot of barriers that prevent people from enrolling in health coverage. These range from language access and differing cultural norms to a general lack of trust in the health care system and complexity. The top concern, however, is affordability. Recent policy changes make ACA coverage more affordable — so if you have not already, take another look. There are some handy tools out there and words of caution that can help you select a plan that works best for you. The most important piece of advice is: Be active and seek out help. Let’s first recap what has changed since open enrollment last year.

ACA Plans: What is Different?

There are several policy changes that make the landscape for plan selection a little different this year. First, the passage of the Inflation Reduction Act (IRA) significantly reduces health insurance premiums for enrollees and for people with lower incomes, it provides cost-sharing subsidies that reduce the financial burden of using health coverage. In sum, the IRA extends the changes made by the American Rescue Plan Act (ARPA) for three additional years. For example, if you earn up to $20,385 or $41,625 for a family of 4 (150% FPL), your premium is zero (see chart below). For those who earn up to $54,360 individually or $111,000 for a family of 4 (400% FPL), the threshold that determines eligibility for subsidies is now 8.5% of income, creating a pathway to affordable coverage. These changes are helpful for both younger workers and older adults not yet eligible for Medicare. The handy chart below illustrates how much financial support people can access based on income (use this KFF calculator to find out eligible subsidy amount). For those accessing health plans in the ACA Marketplaces without subsidies, people should anticipate a 4 percent increase in premiums on average according to Kaiser Family Foundation. These premiums vary state by state so it may look different based on where you live — and some states may have additional financial support, so shop around.


A second change is that more of your people are eligible — yes, your family. The administration recently finalized a rule that eliminates something called the ‘family glitch.’ The family glitch is exactly how it sounds — it is a snag in the way health insurance affordability is calculated to access ACA Marketplace coverage (dig deeper into the background here). When individuals are offered health coverage through their employer and it’s deemed ‘affordable,’ (self-coverage that is less than 9.5 percent of their total income, indexed annually), they do not have access to ACA subsidies and plans. However, if that individual wants to enroll in family coverage and the coverage is 20 percent of their income (or any amount more than 9.5 percent), the affordability test remains the same. This leaves workers and their family members at financial risk — the family must absorb the higher cost of family coverage or leave some family members uninsured (many children have access to Medicaid or a state’s Children’s Health Insurance Program (CHIP) but about 3 million do not according to Kaiser Family Foundation).

According to researchers, over 5 million people are affected by the family glitch. The reinterpretation of the family glitch goes into effect in 2023. The new rule, according to the White House analysis, will help those left uninsured access Marketplace coverage and help people transfer to more affordable plans through the ACA Marketplaces. The administration signals that close to 2 million people will take advantage of this change, many of them families with children. You can learn more here specifically about how ditching the glitch can help mitigate the harm of medical debt.

A final exciting change is that in addition to the federal changes to affordability, ten states are launching programs to provide additional financial support to make sure you can purchase and use your coverage. Blogger and researcher Charles Gaba ticks through programs offered in each of the states here. These range from additional subsidies for youth (18–34) in Maryland to the creation of a Health Care Affordability Fund in New Mexico that brings health care premiums to zero for people living under 200 percent FPL.

All of these policy changes make health care more accessible and affordable AND can help protect people from medical debt.

Ready to Enroll? Some Tips from the Experts

There are several tip sheets out there for active shoppers. Here is a quick list of useful tools that are worth reviewing to help you make the best decision for yourself and your family and protect you from medical debt:

Kaiser Family Foundation: While this brief focuses on policy, it highlights a couple of things that should motivate you to shop. First, with the insurer landscape shifting, there are new opportunities to lower your premiums and out-of-pocket costs. Second, there is a lot of help this year in navigating plan selection and enrollment. Third, if you fell behind on your payments in the past that does not mean you cannot access coverage! Finally, if you earn up to 150% of FPL, you can enroll in marketplace plans year-round. Still stumped about ACA subsidies? Check out KFF’s guide here.

Consumers for Quality Care: This group offers a buyer beware guide for selecting health coverage. The tool includes advice about what to avoid: 1) high-cost sharing, coinsurance and deductibles (including high deductible health plans) that make using your health coverage unaffordable and increases the risk of accumulating medical debt.; and 2) avoid sham insurance like junk plans that exclude key protections.

HealthCare.Gov: Going to the source is important as there are a lot of scams out there trying to get your business. Health & Human Services offers a checklist for what you need to enroll in coverage and provides a set of phone numbers and a tool to find local support to enroll in health coverage

Young Invincibles: The Get Connected tool is another resource that can assist people in locating local help.

As an organization committed to ending medical debt, we know how important health coverage is in securing people’s health and financial wellness. Get help and be an active shopper — take the time to #GetCovered.

Eva Stahl