Premiums will go up next year for people who buy health insurance on their own, without employer coverage. In New York, insurers requested an average increase of 20.6%, but the state approved only 6%. In New Jersey, the average increase requested by insurers is 20.4%, and final approval is pending. With the enhanced federal subsidies having expired at the end of last year, the "cliff" is back: subsidies are cut off entirely once income exceeds 400% of the federal poverty level. In both states, the enrollment period runs from Nov. 1 to Jan. 31, and you must choose a plan by Dec. 15 to have coverage starting Jan. 1.
Households that are self-employed or whose employers do not offer coverage, and that buy individual health insurance (Obamacare), will need to choose next year's plan again starting next month. Enrollment begins Nov. 1. This year, it is wise to find out the size of the increase before the premium notice arrives, because premiums are rising sharply.
New York Approves Only About One-Third of Requested Increases
The New York State Department of Financial Services cut the insurers' requested average individual premium increase of 20.6% to 6%. For small-group plans, it allowed an 8% increase against a requested 23.7%. All 12 insurers that sold plans this year will remain in the market next year.
New Jersey has not yet issued final approval. According to applications insurers filed in August, the average increase for individual plans is 20.4%. Horizon, which has the most enrollees, requested 15.4%; AmeriHealth requested 17%; Oscar requested 29.3%; and UnitedHealthcare requested 35.7%. For small-group plans, the average is 18.3%. The increases could come down after state review.
Why Are Premiums Rising?
The biggest reason is that the enhanced federal subsidies expired on Dec. 31 of last year. Until then, subsidies kept premiums from exceeding 8.5% of income, even for higher earners. Now, if income exceeds 400% of the federal poverty level, no subsidy is provided at all. For a family of four, the cutoff is around $130,000 a year. As subsidies shrank, relatively healthy enrollees dropped coverage, and the remaining enrollees' higher medical costs have created a vicious cycle that pushes premiums up again.
In New Jersey, enrollment fell by 74,492 from the end of January to the end of June this year, to 434,700. Rising hospital and drug costs, especially for high-priced medications such as weight-loss injections, are also cited as factors behind the increases.
New York's Essential Plan Eligibility Has Also Changed
For the Essential Plan, New York's free coverage for low-income residents, the income limit was lowered from 250% to 200% of the poverty level as of July 1. People whose income falls between the two thresholds must move to a regular individual plan. The Essential Plan, Medicaid and Child Health Plus can be applied for year-round, regardless of the enrollment period.
In New Jersey, the state provides its own subsidies (NJ Health Plan Savings) up to 600% of the poverty level, so even households cut off from federal subsidies may receive some assistance. The state also keeps enrollment open longer than the federal period, through Jan. 31.
Doing Nothing Can Cost You
If you do not renew, your current plan will continue automatically, but with the changed premium and subsidy. When the enrollment portal opens on Nov. 1, update your income to recalculate your subsidy and compare your plan with other insurers' plans offering the same level of coverage. Also consider that switching from a Gold plan to a Silver or Bronze plan lowers your monthly premium but increases what you pay when you see a doctor.
Both states have free enrollment counselors called "navigators," and some offer counseling in Korean. They are not brokers who sell insurance but neutral, government-funded resources. You can find a nearby counseling site at nystateofhealth.ny.gov for New York and nj.gov/getcoverednj for New Jersey.