What’s New for 2023 Open Enrollment – Inflation Reduction Act, Family Glitch, and More

November 1st, 2022 Read time: 13 minutes

Products mentioned in this blog post:

The 2023 annual open enrollment period is when people can enroll in individual and family Affordable Care Act (ACA) qualifying health insurance for coverage beginning Jan. 1, 2023.

When is the annual open enrollment period? Open enrollment runs from November 1 to January 15 each year in most states. Some states that run their own health insurance exchanges have different enrollment schedules. In most states, plan selections must be made by December 15 in order to have coverage effective January 1, and plan selections made after December 15 will generally have coverage effective February 1.^[0]

Who is open enrollment for? The annual open enrollment period is for anyone who needs to obtain their own individual/family health insurance. In general, this means people who don’t have employer-provided health benefits, Medicare, or Medicaid/CHIP. And the open enrollment period is not applicable to business owners who are purchasing a health plan to cover their employees. In most cases, that can be done at any time of the year.

Where do you get ACA coverage? To obtain exchange-based coverage, either apply on the federally facilitated exchange (HealthCare.gov) or from your state-based exchange if your state operates one. If your state operates its own exchange, HealthCare.gov will direct you to the correct website for your state, so you can start at HealthCare.gov regardless of where you live.

Find out where to obtain exchange-based ACA coverage in your state.

Why shop in your state’s exchange? Because that’s where you can access federal subsidies, like premium tax credits or cost sharing reductions if you qualify for financial assistance. Learn more about shopping on vs off the ACA exchange.

The basic enrollment information above largely remains the same year to year. However, there are a handful of changes to the ACA each year that it helps to be aware of as you begin the process of shopping for coverage.

Below, we’ll discuss some updates and potential future changes to know about, including:

Inflation Reduction Act
Family glitch fix
New insurers (and some exiting insurers)
Rate changes for 2023
Will health plans continue to cover preventive care?
2023 health insurance options

Inflation Reduction Act

In 2021, the American Rescue Plan (ARP) provided temporary premium subsidy enhancements that eliminated the “subsidy cliff” and made subsidies larger than they had been prior to 2021. Those subsidy enhancements were scheduled to expire at the end of 2022, which would have resulted in significant after-subsidy premium increases for millions of exchange enrollees in 2023.

In August 2022, however, The Inflation Reduction Act was signed into law, extending the ARP’s subsidy enhancements through 2025.

So for 2023, exchange enrollees no longer need to worry about the “subsidy cliff” returning (ie, subsidy eligibility will not end at 400% of the poverty level, the way it did before 2021). And the 2022 subsidy structure will continue to be used in 2023, meaning that exchange enrollees will continue to pay between 0% and 8.5% of their household income for the benchmark (second-lowest-cost Silver) plan^[1].

Family Glitch Fix

Ever since the ACA was implemented, the “family glitch” has been an obstacle that has prevented some families from accessing affordable health coverage. Subsidies are not available in the exchange if a person has access to affordable employer-sponsored health coverage. And from 2014 through 2022, the affordability determination for employer-sponsored health insurance was based on the cost of employee-only coverage, regardless of how much it would cost to add the rest of the family to the plan. If the employee’s coverage was considered affordable, any family members who were eligible to be added to the employer-sponsored plan were ineligible for subsidies in the exchange.

This left about 5 million Americans without access to affordable health coverage^[2]. Most of them did enroll in the employer-sponsored plan, but spent an average of 16% of their household income on premiums – well above the 0% – 8.5% of household income that families pay for the benchmark plan in the exchange if they are subsidy-eligible.

But the IRS has finalized a fix for the family glitch, which is projected to make health coverage more affordable for about one million of the people who are currently affected by the family glitch. Under the new rules, which were finalized just before open enrollment began in the fall of 2022, two separate affordability determinations will be made when a family has access to employer-sponsored insurance. One will be to determine whether the employer’s coverage is considered affordable for the employee (just like the current rules), and the other will determine whether the employer’s coverage offer is affordable for the family. If the employer-sponsored coverage is considered affordable for the employee but not the family, the rest of the family will potentially be eligible for exchange subsidies if they want to switch to a self-purchased plan.

So if your family is struggling with unaffordable premiums for an employer-sponsored plan, you might find that some of your family members are newly eligible for subsidies in the exchange as of the 2023 plan year. It’s certainly worth checking your options before settling on the coverage that your family will use next year.

New Insurers in Some Areas (and Some Exiting Insurers)

As has been the case for the last several years, there are several insurers that are expanding their coverage areas or newly joining the exchanges in some states for 2023. They include Ascension Personalized Care, Aetna, AmeriHealth, Blue Cross Blue Shield of Nebraska, Cigna, Moda Health, St. Luke’s Health Plan, Taro Health, and UnitedHealthcare^[3].

Although most existing exchange insurers will continue to offer coverage in 2023, that’s not universally true. There are some carriers that are exiting the exchanges in some states, including Oscar Health and Bright Health.

The main point to keep in mind is that the insurers that offer coverage in your area for 2023 might not be the exact same list as the ones that offered coverage in 2022. You might have new insurers from which to pick, or you might have to pick a new plan if your plan will no longer be available.

Even if your current plan will still be offered for 2023, you might find that the shifting insurer landscape changes the amount of your subsidy, since that’s based on the cost of the second-lowest-cost Silver plan (ie, the benchmark plan) in each area. If a different insurer takes over the benchmark spot, it can result in a significant price change. And even if the benchmark plan continues to be the same one that held that spot in 2022, a price change will still result in a change in subsidy amounts.

The main point to keep in mind is that it’s important to actively compare all of your plan options during open enrollment, as opposed to just letting your existing plan auto-renew.

Estimated 2023 Premium Rate Changes

Estimated premium rate changes are calculated in the weeks leading up to open enrollment based on insurance companies’ rate filings. Premium rate changes can vary a great deal from state to state, so a national average may not accurately reflect the rate changes where you live.

Premiums for existing plans are increasing modestly for 2023, by an average of about 6%^[4]. But the overall average rate change does not account for new carriers entering the market for 2023.

The market is still much more stable than it was in 2017-2018, when double-digit rate increases were the norm. But the overall average rate increase is a bit larger than it’s been for the last few years. It’s important to remember that if the benchmark premium increases in a given area, so will the premium subsidies that people receive. According to CMS, the average benchmark premium in states that use HealthCare.gov is increasing by about 4% for 2023. And a KFF analysis finds the same 4% increase in benchmark premiums across all states.

Will Health Plans Continue to Cover Preventive Care?

In September 2022, a federal district court in Texas issued a ruling in Braidwood v. Becerra, casting doubt on whether the current rules mandating preventive care coverage will remain in effect^[5].

Under the ACA, certain preventive care must be covered in full by all non-grandfathered health plans.

The specific care that must be covered was not detailed in the ACA, since guidelines and medical care change over time – for example, COVID didn’t exist when the ACA was written.

Instead, the ACA delegated authority to three agencies (the U.S. Preventive Services Task Force, the CDC’s Advisory Committee on Immunization Practices, and the Health Resources and Services Administration) that are responsible for determining what preventive care health plans must cover.

In Braidwood v. Becerra, the court ruled that the Preventive Services Task Force cannot validly set requirements for preventive care that health plans must cover. But the court did not overturn the authority of the other two agencies to set preventive care guidelines. So some of the current preventive care coverage rules are not in jeopardy, while others are.

Eventually, this could result in changes to the way preventive care is covered by health plans. But the court did not issue an immediate order to prevent enforcement of the current rules. And we don’t yet know how broadly such an order would apply (ie, nationwide, versus districtwide, versus only the plaintiffs in the lawsuit).

This case is likely to be appealed, and could eventually end up at the Supreme Court. For now, the expectation is that insurers will continue to cover the same preventive services in 2023 that they cover in 2022. But this could certainly change in the future, depending on the ongoing legal battle over preventive care coverage.

Your 2023 Health Insurance Options + Next Steps

Whether you routinely enroll in health benefits through ACA open enrollment or you’re shopping for individual coverage for the first time, it’s time to start thinking about 2023 health insurance.

Let’s look at the two options that tend to be discussed the most during open enrollment and beyond:

ACA plans (also sometimes referred to as “major medical” plans)
Short-term medical insurance plans (also referred to as “term” or “limited benefit” coverage)

Major Medical Plans

Individual ACA-qualifying health plans are those that comply with the guidelines of the Affordable Care Act.

Today, that means that they:

Are guaranteed-issue and cover pre-existing conditions without charging you a higher premium
Cover the 10 essential health benefits as outlined in the ACA.^[6]
Are eligible for tax credits or subsidies if you meet the qualifications.
Are available only during the annual open enrollment period or a special enrollment period if you qualify.
Are qualifying coverage if you live in a state that has an individual mandate penalty.
Don’t have annual maximum or lifetime maximum limits on essential health benefits.^[7]
Base premium costs on your age, location, tobacco use, plan category, and number of people on the plan.^[8] Factors like sex and health status or family health history cannot be used to charge you more for coverage.

Individuals can access ACA-qualifying plans a number of ways depending on their eligibility. For example:

From the federal marketplace (or your state exchange), these individual ACA health plans are eligible for ACA subsidies if you qualify.
Away from the exchange, these individual ACA-qualifying health plans are not eligible for subsidies.
Via TRICARE, CHIP, Medicaid or Medicare, also ACA-qualifying coverage if you qualify to take advantage of one of these programs.

If you think the comprehensive benefits that the ACA provides are important for you or your family, then your next steps are to:

1. Verify if you qualify for financial assistance. If you do, you’ll be enrolling on the federal marketplace or your state’s exchange.

2. Determine where to shop for your ACA plan if you do not qualify for subsidies or Medicaid – depending on where you live, you may have more plan options by shopping away from the exchanges (i.e., directly from insurance companies). In some states, however, the plans available off-exchange are the same plans that are available on-exchange.

3. Find a plan with an affordable premium and deductible with the right network coverage for you. (Avoid being underinsured.)

Enroll in an ACA Health Plan During the Annual Open Enrollment Period.

Shop ACA Health Plans

Short-Term Health Insurance

Some people may wish to consider non-ACA options like temporary short-term medical coverage. Why? There are a few potential reasons…

The premiums for ACA-compliant plans can be cost-prohibitive for those that do not qualify for financial assistance.

Some people choose to use very few healthcare services, for example, they may not visit the doctor for annual health exams or utilize vaccines and only go to the doctor when they get sick.

Still, others may be planning to secure job-based coverage soon. Even though ACA plans can be canceled anytime, they may want to try to save on premium costs by forgoing ACA-compliant major medical insurance coverage temporarily.

(Note that for people who are subsidy-eligible, on-exchange coverage is often less expensive than short-term health insurance. But it’s important to understand that if you’re applying for a plan through the exchange and you intend to replace it with employer-sponsored health insurance in the near future, you’ll want to project your income for the full year, including the amount you expect to earn once your new job starts. Premium subsidies are reconciled on your tax return, and your actual subsidy amount will be based on how much you earned for the whole year, not just the amount you earned during the months you had coverage through the exchange.)

Short term medical premiums tend to be lower than unsubsidized ACA plans because benefits are limited and those with pre-existing conditions are excluded.^[9]

These plans are designed to help people access temporary and limited medical benefits for things like hospitalization, emergency care, and doctor’s office visits while they’re between ACA or employer-provided plans. However, they should not be considered a substitute for a comprehensive ACA plan because there are several limitations.

Short-term health plans:

Are not available in all states
Don’t cover pre-existing conditions and are not guaranteed issue
Don’t cover the essential health benefits
Have caps on how much they’ll pay
Include a list of exclusions and limitations
Typically can be used anywhere without network restrictions (but note that this can result in significant balance billing, depending on the situation)
Are not subject to the annual open enrollment period

If short-term health insurance sounds like a fit for your needs, you live in a state that permits them and you qualify, it just takes a few minutes to obtain quotes for multiple plans and enroll in coverage. You can even begin coverage the next day.

Find out if temporary plans are available in your state and compare costs.

Shop Short Term Plans

Summary and Next Steps

The 2023 annual open enrollment period in the fall of 2022 is the 10th annual enrollment window for ACA-compliant health coverage. And although the ACA has faced numerous challenges over the years, the individual major medical market remains stable and robust.

In many areas, there are more plan options than ever before, and the Inflation Reduction Act and family glitch fix help to ensure that affordable coverage will be available to most applicants.

For more of our ACA open enrollment content to help you plan and prepare, check the guide below.

And as always, if you have questions and wish to speak with a health insurance agent about your options, call (888) 855-6837.

ACA Open Enrollment Resource Guide

Check out the related ACA resources below for more help navigating open enrollment.