Chris Teller of Kalamazoo works on a home renovation project. Teller left his job with J.P. Morgan and Chase in 2015 and is now a self-employed licensed builder who specializes in renovating kitchens and bathrooms. Teller said the ability to get subsidized insurance through the Affordable Care Act made self-employment possible.

Julie Mack | jmack1@mlive.com

BY JULIE MACK

As Chris Teller shops for insurance on healthcare.gov, his options for 2018 include a subsidized bronze plan with no out-of-pocket premiums and a gold plan that actually costs less than the silver plan he has now.

“I’m actually doing better under the Affordable Care Act than I was under my employer” in terms of insurance coverage, said Teller, 59, who left the banking industry in 2015 and is now a self-employed licensed builder. “I’m paying about $300 a month now, which is about what I paid then, and the deductibles are much lower.”

Michigan residents buying insurance on their own have until Dec. 15 to purchase a plan for 2018. Despite significant hikes in premiums for plans on healthcare.gov, an analysis of 2018 plans show some consumers may actually pay less than 2017 because subsidies also are increasing.

12 things to know about 2018 Obamacare enrollment

In fact, depending on their age and income, many more Michigan residents are now eligible for high-deductible "bronze" plans with no out-of-pocket cost for premiums.

For instance, 70 Michigan counties are offering no-cost bronze plans to 40-year-olds with an income of $25,000 in 2018 compared to one county in 2017.

Even for individuals where no-cost plans are not available, shoppers on healthcare.gov who qualify for subsidies will find a significant drop in the cost of the lowest-price bronze and gold plans.

"The pricing for 2018 is unlike anything we've ever seen," said Megan Foster Friedman, an analyst for the Center for Healthcare Reform and Transformation, an Ann Arbor think tank. "The fact people can upgrade to a gold plans that are the same price as silver plans is really interesting."

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(You can put your cursor over the interactive map above to see the underlying data.)

Indeed, Michigan has 13 counties where the lowest-cost gold plan for a 40-year-old has a lower premium than the lowest-cost silver plan.

Moreover, "the bronze plans cover a lot more than they used to," said Olga Semenova, health and wellness coordinator for Jewish Family Services of Metropolitan Detroit.

An enrollment navigator for the Affordable Care Act, Semenova has been encouraging people to look at a Molina Healthcare bronze plan available in metro Detroit that has a high deductible for hospitalizations, but allows people to see their primary doctor or fill a prescription for a generic drug for $20 co-pays or see a specialist for $80, even before the deductible is met.

The availability of low-cost bronze plans for consumers with subsidies offers a great option for healthy people who rarely see a doctor, said Robert Williams, a spokesman for the Southwest Michigan Association of Health Underwriters and an independent insurance agent himself.

"When I have people who say, 'I spend all this money for insurance and I never use it,' I recommend a bronze plan," perhaps paired with a health savings account, he said.

The prevalence of lost-cost bronze plans for subsidized consumers means an estimated 54 percent of uninsured Americans could get coverage for less than the cost of the tax penalty, according to a new analysis by the Kaiser Family Foundation.

The current tax penalty for lacking insurance is 2.5 percent of adjusted gross household income or $695 per adult and $347.50 per child under age 18, whichever is highest.

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Source: Kaiser Family Foundation

What's going on?

Experts say the unusual pricing pattern is a consequence of how insurers reacted to the political turmoil in Washington around the Affordable Care Act, as well as President Trump's decision to stop reimbursing insurance companies for mandated subsidies known as cost-sharing reductions.

With the loss of CSR payments and fears that fewer young and healthy people will sign up for Obamacare in 2018, Michigan insurers substantially hiked their premiums – and those increases were loaded onto silver plans, the level used to calculate the premium subsidies.

In Michigan, Friedman said, premiums for silver plans have increased an average of 34 percent from 2017 to 2018 compared to 16 percent for bronze plans and 6 percent for gold plans. (Gold plans pay, on average, 80 percent of medical bills for those insured compared to 70 percent for silver plans and 60 percent for bronze plans.)

"This prevalence of free bronze has increased significantly in 2018," said a recent analysis by Oliver Wyman Actuarial Consulting, a New York-based global firm. "This is a direct result of insurers loading the cost of the lost CSR funding onto silver plans, as most insurers did, rather than spreading it across all plans. This increases the subsidy without increasing premiums for other plans, and therefore reduces the net cost of plans at other metal levels that were not loaded."

An example of what that means for a consumer: A 60-year-old in metro Detroit with an income of $30,000 qualified for a $295 monthly subsidy in 2017 compared to $503 in 2018, a 37 percent increase.

That maintained parity when shopping for silver plans, but gives the consumer more spending power for bronze and gold plans. For 2017, that individual's lowest-cost option was a bronze plan costing $113 a month; for 2018, the lowest premium is zero. And there's a gold plan available for $228 a month, considerably below the $347 average for 2018 silver plans.

About 300,000 Michigan residents purchased insurance through the ACA marketplace in 2017, and 83 percent qualified for tax credits to subsidize premiums.

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This is the cost of the benchmark silver plan in Kalamazoo County before and after subsidies. In the case of consumers with a $35,000 income, the average was less before 2018 for younger age groups. (The benchmark plan is the second-lowest cost silver plan, and is used to set subsidy levels.)

To be sure, that 13 percent who don't qualify for subsides are facing steep price hikes this year. And even those with subsidies are facing a turbulent market that requires careful shopping and weighing trade-offs.

A big consideration: About half of Michigan residents who get insurance through healthcare.gov qualify for the cost-sharing reductions, which reduces deductibles and co-pays for people with incomes that are below 250 percent of the federal poverty line. However, CSR benefits are only available on silver plans.

Another factor: The less-expense plans on healthcare.gov are generally HMOs with narrower networks of providers. Consumers also need to weigh plans with lower premium costs against their higher deductibles and co-pays.

Semenova said she's seeing many healthcare.gov clients "freaked out" by insurance company notifications of price increases. Those notifications don't indicate the increase in subsidies, and they relax when they "see the math," she said.

But the pricing changes also mean that "almost everyone has switched plans," she said, as plans that once seemed affordable no longer are, while other plans have become more attractive.

"I'm seeing some people who normally get a silver plan now getting a gold," while others are opting for bronze instead of silver, she said.

One such case involved a woman in her 60s on a tight budget who said she could no longer couldn't afford a silver plan, so Semenova steered her to the Molina bronze plan for a subsidized premium of $2 a month. While it has less benefits, it still offers some coverage and is "much less than the tax penalty" for not getting insurance, Semenova said.

Williams, the insurance agent in Kalamazoo, said the "big struggle" this year is the assumption among some people that Trump's decision to end cost-sharing reductions payments meant that consumers no longer get subsidies.

"People think the subsidies went away, when what changed is how they were funded," he said. "Tf you qualify for a subsidy, you're probably going to be OK" in terms of being insulated from price hikes.

In fact, he said, "what I'm seeing is that most people are just a touch down on premiums" for 2018 compared to this year.

(You can put your cursor over the interactive map below to see the underlying data.)

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Those without subsidies

It's a different story for people who don't qualify for subsidies. That includes a single person with an income over $48,240; a couple with an income over $64,960, or a family of four with an income exceeding $98,400.

Pam Yurk, a 59-year-old Galesburg resident, is in that group. She was covered for years under her husband's insurance, but now that he's retired and on Medicare, she needs to buy coverage on the individual market.

Since 2014, she has had a Blue Cross Network low-deductible silver plan that originally cost her $400 a month and is currently $726. She recently was notified that's increasing to more than $950 a month.

"It was a quite a shock," she said, and has her scrambling to look at other options.

Experts like Williams and Semenova do have some tips for people such as York.

First is to make sure they don't qualify for a subsidy – since the cap is based on the federal poverty line and increases a little each year, someone who was just over the cap last year may qualify this year.

Especially for people in their late 50s or early 60s, the financial implications of qualifying vs. not qualifying for an ACA subsidy are so substantial that people should consider keeping their income within the subsidy levels when possible, Williams said.

He recalled working with a couple a few years ago who planned to pull $70,000 from their retirement accounts for the year, in part to have enough to pay for health insurance. But keeping their income just under the subsidy cap actually saved them thousands of dollars, he said.

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This chart shows the difference in 2018 premium costs for the benchmark silver plan -- i.e., the second-lowest priced silver plan -- for single adults with an income of $48,000 vs. $49,000. Subsidies are available to single adults with an income below $48,240. Subsidies are based on age, income and geography. This chart shows there's no difference for a 30- or 40-year-old near the income cutoff point, but 60-year-olds just above the subsidy benchmark pay 85% more than someone just below.

For people who don't qualify for subsidy, Semenova and Williams recommend looking at "off-market" plans – i.e., plans not marketed on healthcare.gov. While those plans don't qualify for subsidies, they also can be considerably less expensive, they said.

"Because of the way insurance companies rated polices in the absence of the CSR payments, off-marketplace silver plans have more lower deductibles and can be hundreds of dollars per month less expensive than silver plans on healthcare.gov," Williams said.

"If you want to get a silver plan and you don't qualify for a subsidy," he said, "an off-market plan is going to be a much better deal."

To find those plans, individuals need to work with a health insurance agent or contact individual insurance companies. "Those off-market plans aren't going to show up on healthcare.gov," William said.

He cautions people who move from healthcare.gov to an off-market plan to make sure to cancel their current plan at the end of 2017, since healthcaregov does auto-enrollment unless individuals indicate otherwise.

Two other money-saving tips: People who don't have expensive, ongoing health issues should seriously consider a bronze plan paired with an HSA, and they also should realize that HMOs will be considerably less expensive than a PPO or preferred provider plan, Semenova said.

"I always make a recommendation of going with a bronze plan and an HSA if you can," Williams said. "And make sure you don't buy more (provider) network than you need. The PPO plans are really expensive" and in some regions, such as Kalamazoo, there are HMO plans with a robust provider network.

While the high deductibles of the bronze plans – up to $7,150 for an individual and $14,300 for a family – can seem daunting, Williams points out that ACA requires plans to include a list of preventive services such as annual physical, contraceptive coverage, mammograms and colonoscopies without a co-pay or deductible.

Any insurance also provides an "instant discount" for other services due to the rates negotiated by the insurance companies, he said. Even for services paid out of pocket, "you're going to pay less than someone who is uninsured."

Yurk said she'll be looking at off-market plans, and also may switch to a bronze plan.

"I'm pretty healthy," she said. "I have a low-deductible plan now and I didn't even meet that this year."

Despite the price hikes, she said supports the Affordable Care Act.

"I'm one of those people who thinks you should fix it rather than get rid of it," she said. "I think everybody needs insurance, and many people can't afford it on their own."

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These are the federal income cutoffs that will be used for Obamacare programs in 2018. Those with a income below 138% of the federal poverty line are eligible for Healthy Michigan, which is Michigan's Medicaid expansion. Those with an income below 250% of the FPL are eligible for both tax credits to subsidize premiums and cost-sharing reductions that lower co-pays and deductibles. Those with an income below 400% of the FPL are eligible for tax credits to subsidize premiums.

Getting help

The price upheavals in the individual market make it imperative for people to calculate their new level of subsidy and shop carefully on healthcare.gov before re-enrolling in their current plan, experts say.

Because the market is so complicated this year, experts are also urging people to work with an ACA enrollment navigator or an insurance agent certified to enroll people in healthcare.gov.

A list of navigators and insurance agents is on the healthcare.gov website and can be searched by zip code. Healthcare.gov also staffs a 24/7 telephone help line at 800-318-2596 during open enrollment period.

However, Williams says there's real value to working with local insurance agents as compared to the healthcare.gov navigators, who deal with plans across the country and lack expertise in any particular market.

"Think of all the plans in Michigan alone, and multiply that times the 34 states" that use healthcare.gov, he said.

By comparison, he said, insurance agents have a much deeper knowledge of the specific plans available in a local market, such as their provider network.

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Michelle and Troy Zukowski-Serlin with their daughter Julia. The Portage family is insured through a plan on the healthcare.gov. (Photo courtesy of Troy Zukowski-Serlin)

Troy Zukowski-Serlin of Portage said it took two conversations with ACA navigators to figure out the best deal for his family in 2018 – a Blue Care Network plan that will cost $254 for himself, his wife and their teenage daughter.

That's a $20 a month increase over 2017, and an increase in deductible from $3,200 to $4,000. "But considering all the turmoil this past year, that's a great deal," he said.

He and his wife, Michelle Zukowski-Serlin, are self-employed therapists at Choices for Change, a counseling agency she founded years ago. Based on her insurance costs before the ACA, Serlin said, she estimated her family would be paying $900 a month for insurance if the ACA subsidies didn't exist.

"It's like night and day," she said about having access to subsidized insurance. "We were paying more and getting less" before the ACA.

Teller agreed that for self-employed people who qualify for subsidies, Obamacare has made a huge difference.

"If I had to pay for insurance by myself, I couldn't afford it," he said. "For someone like me, who went from the professional world to self employment, the Affordable Care Act was the only way I could do it."

Williams said there have been winners and losers under the ACA.

"I don't have families crying in my office anymore because they have a kid with diabetes who can't get coverage," he said. "That's a good thing."

On the other hand, he said, young and healthy people had access to less expensive insurance before the ACA took effect in 2014. Those people have seen their premiums go up, especially if they don't qualify for subsidies.

Still, he said, it's hard to compare policies before the ACA with health insurance now because the coverage is so different. Under the ACA, there are no exclusions for pre-existing conditions, no lifetime caps on coverage, no exclusions for mental-health coverage or other conditions.

He recalled a client who kept his pre-ACA, grandfathered plan for 2014, the first year of the ACA. But for 2015, he signed up for Obamacare after he had cataract surgery, only to discover his plan didn't cover out-patient operations.

"You don't see that kind of thing" in ACA plans, Williams said. "For each thing people hate about (the ACA), there's also something they love."