2017 is a strange year to buy health insurance. Some weird and bad things have happened, and it seems like we should expect insurance plans to become more expensive. But it turns out that a lot of people may now be able to get cheaper insurance, and for an odd reason.
Here’s why: some government funny business around CSR paymentsmeans silver plans are way more expensive than usual. But the government also gives subsidies to help low and middle income families pay for insurance—and the dollar amount of those subsidies is based on the price of silver plans. So the subsidies are now also huge.
This means that, if you get a subsidy, your silver plan will likely be about the same out-of-pocket price as last year. But that means you could also save money by buying a cheaper bronze plan instead. For many people, the subsidies are large enough they can get a bronze plan for free.
The Wall Street Journal reports that a 60-year-old making $36,000 a year could get a zero-premium plan in more than half of the nation’s counties. Even at an income of $48,000, a 60-year-old could still get zero-premium insurance in more than 600 counties. In California, half a million people could pay the state’s minimum charge of $1/month.
Even if you don’t get a deal that good, a lot of people will find something cheap. For example, last year, 71 percent of people on the exchanges could get a plan for less than $75/month. This year, according to a report from the federal government, 80 percent of people can. And that’s on average; in some states, like Alabama, more than 90 percent of people shopping on the exchanges will find a plan for $75 or less.
How do I know if I get this deal?
If you’re a single person making $48,240 or less, and you don’t have an employer-based health insurance plan, you probably qualify for subsidies. (If there’s more than one person in your household, the cutoff is different: $98,000 for a family of four and we have more numbers here.)
Even if you didn’t qualify for a subsidy in the past, it’s worth checking again. The details change every year: the federal poverty level goes up, and your own income, age, and family size aren’t constant from year to year, either. Meanwhile, the insurance plans available in your area will also change from year to year.
So we can’t give you a solid yes or no. Instead, go to healthcare.gov and run the numbers. This calculator can tell you whether you get a subsidy based on your adjusted gross income, and then you can preview plans to see actual prices. (Some states run their own exchange rather than using healthcare.gov, so you can use the subsidy calculator but you’ll go to your state’s website to look at prices.)
Again, this is a confusing year for healthcare, so I called up Charles Gaba, the analyst behind acasignups.net. He tracks insurance prices and enrollment on the exchanges. “Whatever you do, do not let yourself be automatically enrolled,” he said. That’s what happens if you don’t choose a plan. Usually you’ll end up with a plan that’s similar to what you had before. But this year, the situation is so chaotic that all bets are off. Shop around.
He also pointed out a few cases where cheap insurance could be harder to find:
- If you don’t qualify for a subsidy, you don’t benefit from the high silver prices. All you see is, ugh, high silver prices. You’ll probably want to switch to bronze (cheaper but usually with a high deductible) or switch to gold, which is great coverage at a higher price. But this year, chances are that premiums on a gold plan will actually be cheaper than those sky-high silver premiums.
- If you don’t qualify for a subsidy and you live in Alabama, California, Connecticut, Florida, Hawaii, Illinois, Idaho, Maine, Maryland, Minnesota, Nevada, Ohio, Pennsylvania, Rhode Island, South Carolina Utah, Virginia, Washington, Wisconsin, or Wyoming, there’s a special deal for you. If you want one of those silver plans that looks like it’s out of reach, look up the insurer who offers it and see if they offer the same plan off the exchange. In these states, they’re allowed to do that, and it should be a lot cheaper than the version on the exchange.
- In Colorado, Delaware, Indiana, Oklahoma, and West Virginia, the extra cost that most states are loading onto silver plans is here spread out over all plans. So whether you get a subsidy or not, switching plans isn’t likely to get you a great deal.
- No matter what, compare prices. There may be special loopholes or challenges for your particular situation.
So don’t assume that insurance will be too expensive; run the numbers and find out.