Health insurance open enrollment begins Nov. 1

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MEMPHIS, Tenn. — If you plan to shop for insurance through the government’s marketplace, you better get ready. Open enrollment begins Wednesday and runs through December 15 — about half the length of prior periods.

Be sure you have all the information on your income and other important documents on hand to complete the process.

According to federal data released Monday, premiums for the benchmark silver Obamacare plan will soar 37%, on average, for 2018.  But in a strange twist, policies could actually become more affordable for many people buying on the exchange. That’s because the price spike means many enrollees will receive more generous premium subsidies, so they can now afford gold policies with lower deductibles.

The report covers the more than three dozen states that use the federal exchange, healthcare.gov.

The steep rate hike means a 27-year-old will pay nearly $5,000 a year, on average, for the benchmark silver plan, upon which premium subsides are based. That’s up from $2,600 when the Obamacare exchanges opened in 2014. This is before subsidies are factored in, however.

Premiums are skyrocketing for a second year in a row. Rates rose 24% this year in the states using healthcare.gov.

The price of Obamacare plans has increased sharply over the past four years, partly because enrollees were much sicker and costlier than insurers expected. But the exchanges showed signs of stabilizing this year after the most recent price hike.

Premiums are spiking again in part because President Donald Trump stopped reimbursing insurers for another key Obamacare subsidy, which they are still required to provide by law. These cost-sharing subsidies reduce deductibles and co-pays for lower income enrollees.

Insurers raised rates by as much as 38% just because the funding ended, though the amount varied widely by state, according to a recent analysis by the Kaiser Family Foundation. Most states directed insurers to raise the silver plan prices since premium assistance is tied to that metal level and the cost-sharing subsidies are only available to those purchasing silver plans.

The big rate increase means premium subsidies will rise 45%, on average, to $6,660 a year. More than eight in 10 enrollees receive premium subsidies, which reduce their cost to less than 10% of their household income.

A 27-year-old making $25,000 a year could receive an annual subsidy of nearly $3,300. That would bring his or her premium down to $1,650 a year if he or she enrolls in the benchmark silver plan.

A family of four earning $60,000 a year could get an annual subsidy of $13,000, bringing their benchmark plan premiums down to just over $4,750.

These more generous subsidies will make bronze plans — which have lower premiums, but higher deductibles — more affordable for many enrollees. And the higher level of assistance means that gold plans will actually be cheaper than silver policies in some markets.

That’s why it’s particularly important for consumers to shop and compare plans this year.

Also, consumers will have fewer choices on the exchanges.

Some 29% of enrollees will only have one insurer offering policies, up from 20% this year and 6% in 2016. Eight states will have only one insurer, up from five states this year.

Just over 130 insurers will be on the exchanges in 2018, down from more than 230 two years ago. Many large, publicly traded insurers, including Aetna and Humana, have exited Obamacare, while Anthem has greatly downsized.

Open enrollment through employers

More than 151 million Americans receive their benefits through employers. To start this process, review your current plan, what you spent this past year; and then try to project what your health care costs will be in the year ahead. Then compare your workplace options and determine what they cover, how much they cost, including co-pays and deductibles and whether your doctors are in the network.

Many large employers are introducing high-deductible health plans, which offer lower premiums. These plans are usually paired with Health Savings Accounts, which allow you to set aside pre-tax money to pay for unreimbursed costs. If you’re generally healthy and want to save for future health care expenses, this may be an attractive choice.

For retirement plan participants, there’s good news: For the first time in three years, you can save more money. Next year, the maximum contribution to employer-based plans will increase by $500 to $18,500.