Did you hear that the federal government’s Open Enrollment Period (OEP) for health insurance ended on January 31? If you did, you heard wrong, because the government recently extended the period of time you can sign up for health insurance, but only for a select few who haven’t yet filed their 2014 tax return.
Wait, why are we rewarding people who don’t file their tax returns???
It’s a great question. The only people who qualify for this extended enrollment period (which closes at the end of March) are those who have yet to file their 2014 taxes. What do taxes and health insurance have to do with each other, you might ask?
If your income is below a certain threshold, you qualify for premium tax credits to subsidize the monthly amount you pay for health insurance. However, the government requires you to reconcile that payout on your taxes in the following year, so that if you overestimated your income, you’ll owe money back to the government. If you never file your taxes, that reconciliation never happens, and the government’s rule is that you can’t get premium tax credit subsidies if you haven’t filed.
This stipulation of the law isn’t new but the 2016 enrollment period is the first time that the rule has been enforced. So, in order to help the people who haven’t filed their 2014 taxes, resulting in them being unable to afford their health insurance anymore, President Obama has given them a reprieve, and will allow them to sign up for health insurance until March 31, as long as they file their 2014 taxes as well.
So, tell me why I should care?
The reason this is important is because extending the enrollment period increases the cost on insurers. How? The reason is that the people who sign up during these special enrollment periods tend to be the sickest, and subsequently the most expensive to insure. And guess how they make up these losses? By imposing higher insurance rates on the rest of us, that’s how.
So while this new enrollment period gives some Americans an extra chance to get health insurance and estimates are that it’s a pretty small group, likely less than 100,000 people it’s policy like this that increases the burden on the rest of us. And that’s something I’m not in favor of are you?
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.