Personal finance

You can still sign up for 2023 health insurance through the public marketplace — but waiting past Dec. 15 can delay coverage

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If you don’t have health insurance lined up for next year, there’s still time to get private coverage through the public marketplace.

The deadline is Dec. 15 — Thursday — to sign up on Healthcare.gov for a health plan to take effect Jan. 1. Otherwise, you have until Jan. 15 to enroll with coverage effective Feb. 1.

“For people who need coverage Jan. 1, don’t wait until the last minute because it can take time to do the [application],” said Cynthia Cox, director for the Kaiser Family Foundation’s Affordable Care Act program. “They should start today.”

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Generally speaking, people who get insurance through the federal marketplace or their state’s exchange are self-employed or don’t have access to workplace insurance, or they don’t qualify for Medicare or Medicaid.

Most marketplace enrollees — 13 million of 14.5 million — qualify for federal subsidies (technically tax credits) to help pay premiums. Four out of five customers will be able to find plans for $10 or less per month after tax credits, according to the Centers for Medicare & Medicaid Services.

Some people may also be eligible for help with cost-sharing, such as deductibles and copays on certain plans, depending on their income.

There’s no income cap to qualify for subsidies

For now, the subsidies are more generous than they once were. Temporarily expanded subsidies that were put in place for 2021 and 2022 were extended through 2025 in the Inflation Reduction Act, which became law in August.

This means there is no income cap to qualify for subsidies, and the amount anyone pays for premiums is limited to 8.5% of their income as calculated by the exchange. Before the changes, the aid was generally only available to households with income from 100% to 400% of the federal poverty level.

The marketplace subsidies that you’re eligible for are based on factors that include income, age and the second-lowest-cost “silver” plan in your geographic area (which may or may not be the plan you enroll in).

Giving a good income estimate is important

For the income part of the determination, you’ll need to estimate it for 2023 during the sign-up process.

Giving a good estimate matters.

If you end up having annual income that’s higher than what you reported when you enrolled, it could mean you’re not entitled to as much aid as you’re receiving. And any overage would need to be accounted for at tax time in 2024 — which would reduce your refund or increase the amount of tax you owe.

“You don’t want a nasty surprise when you do your taxes the next year,” Cox said.

Likewise, if you are entitled to more than you received, the difference would either increase your refund or lower the amount of tax you owe.

Either way, at any point during the year, you can adjust your income estimate or note any pertinent life changes (birth of a child, marriage, etc.) that could affect the amount of subsidies you’re entitled to.

Falling behind on premiums can mean getting dropped

Be aware that if you don’t pay your premiums (or your share of them), you face coverage being canceled and claims going unpaid.

For enrollees who get subsidies, coverage is generally dropped after three months if premiums are not caught up. For those who pay the full premiums because they don’t qualify for subsidies, there’s only a grace period of about a month before cancellation, depending on the state. 

If you end up without insurance, you can’t re-enroll through the marketplace unless you qualify for a special enrollment period. This could include life changes such as marriage or birth of a child.

The ‘family glitch’ solution may not be right for everyone

Also, the so-called “family glitch” is generally fixed, starting in 2023.

Basically, workers who don’t get employer-sponsored health insurance that’s considered “affordable” — no more than 9.61% of income this year — are permitted to sign up for a plan through the marketplace. However, the measurement of affordability is based on the cost of employee-only coverage.

That’s been the case even if a worker wanted their dependents covered too — meaning the actual cost of family coverage could far exceed that threshold. Thus, the “family glitch.”

As of 2023, here’s how it will work: If the workplace coverage for a family would be unaffordable, the employee would need to stay on the employer plan, while the spouse and kids would be covered by the marketplace — and eligible for subsidies, Cox said.

“That means families would be split between two or more health plans, which would mean having multiple premiums and deductibles,” she said. “Not all the people in the family glitch will actually be better off moving onto subsidized coverage.”

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