In an effort to educate readers about the importance of healthcare coverage in maintaining both financial and physical health, especially during a global pandemic, we are creating a series about open enrollment for 2021. We will continue to share information about open enrollment and how it might affect you this year, so please come back to read future posts.
The healthcare math this year is frightening. About 30 million Americans do not have health insurance, nearly 6 million Americans have been infected with the novel coronavirus, and the cost of treating severe cases of COVID-19 is roughly $20,000. Meanwhile, an estimated 26.8 million Americans who lost their jobs during the pandemic are at risk of becoming uninsured after losing their job-based health coverage.
The good news is that you may have options, but you should be aware of certain timelines so you can take action in time. Open enrollment for calendar year 2021 is just around the corner—even if your state is offering a special enrollment period to account for this year’s extraordinary challenges. If you’re eligible for Medicaid or the Children’s Health Insurance Program (CHIP), you can get covered at any time.
So, what is open enrollment, anyway?
During open enrollment, anyone who wants to get healthcare coverage or change their existing healthcare plan can do so. Open enrollment is a period of five to seven weeks, varying according to type of plan.
Read on to learn how the process works, important deadlines, why you may want to participate, and why open enrollment in 2020 (for coverage in 2021) may be more important than ever.
What is open enrollment? The basics
During open enrollment, you may start, stop, or change your health insurance coverage for the upcoming calendar year as long as you do it by the deadline. There are some exceptions to meeting the deadline if you’ve experienced significant life changes, which we discuss in greater detail below.
If you qualify for coverage through your employer, they will inform you of the open enrollment period and coverage options.
If you’re seeking coverage through one of the marketplaces established by the Affordable Care Act (ACT), an individual (private) plan, or through Medicare, then you’ll want to take note of the following dates for open enrollment 2021.
- Marketplace, state exchanges, and individual plans: November 1 – Dec. 15, 2020
- Medicare*: October 15 – Dec. 7, 2020
- Switch from Medicare Advantage to original Medicare: January 1 – Feb. 14, 2021
- Medicare Parts A and B: January 1 – March 31, 2021
- Medicaid or CHIP: Anytime
Exceptions to open enrollment deadlines
You may not be limited to open enrollment deadlines this year if you’ve experienced a life-changing event or if your state has opened an extended window for enrollment due to the COVID-19 crisis. Here are the major exceptions to enrollment deadlines.
Special Enrollment Periods (SEPs)
You may be eligible for a special enrollment period (SEP) if you’ve experienced certain life events that require urgent action, such as:
- Welcoming a new child to your family
- Moving to a new state
- Getting married or divorced
- Losing your coverage
These SEPs generally span 60 days before and 60 days after the date of the qualifying event. In addition, job-based health insurance plans must provide an SEP of at least 30 days after termination.
You can see if you’re eligible for an SEP at HealthCare.gov by entering your zip code and answering a few questions about your particular situation.
All but 13 states chose not to establish their own health insurance marketplaces under the ACA, instead allowing federal management. To date, the federal government has not offered a special enrollment period in the states where it manages the marketplaces, as the American Association of Retired People (AARP) requested in a letter to Congress.
However, some states that run their own marketplaces did expand their enrollment periods to allow individuals impacted by the pandemic to add or change their healthcare plan. The deadline for some of these states has already passed until the regular open enrollment period begins, but the following states (and D.C.) continue to offer special open enrollment periods:
- New York: Through Sept. 15
- Maryland: Through Dec. 15
- Washington: Through Sept. 30 (if you lost coverage after March 1)
- District of Columbia: Through Sept. 15
Why open enrollment in 2020 is especially important
What is open enrollment’s special significance this year? For some, it won’t be any different than past years. But if you’re one of the estimated 16.2 million workers that lost their employment-related health coverage, have concerns that your existing coverage isn’t quite enough, are at high risk of contracting COVID-19, or need a more affordable option, here is more information on why open enrollment (for coverage beginning in 2021) is important.
Job losses and business shutdowns hit historic highs in the wake of the pandemic, and happened fast—resulting in lost coverage just when people needed it the most. To put this into perspective, 41 percent of people who said they or a spouse/partner lost their job as a result of the pandemic had health coverage through that lost job, according to a poll by the Commonwealth Fund. Of those, about half say at least one of them is now uninsured.
Only about half of the U.S. population is covered by employer-sponsored healthcare plans, so not everyone who lost a job because of the pandemic received healthcare benefits even while employed. However, if you haven’t lost your job during the pandemic and do have job-based health benefits, open enrollment is an opportunity to change your existing plan to better suit your needs, or those of your family.
During this global pandemic, adequate healthcare is even more critical than ever, to prevent the spread of the coronavirus. However, many of the workers who come into contact with the general public as well as more vulnerable populations (such as grocery store clerks and nursing home caregivers) have the least coverage, either because their employers to not offer healthcare benefits and/or they cannot afford them.
Having adequate insurance coverage could mean better access to COVID-19 testing, checkups, and covered treatment options. Even if you aren’t in a high-risk group for contracting COVID-19, there’s nothing like a global pandemic to make you reconsider whether you’re adequately covered. Open enrollment offers a chance to at least explore your options and find a plan that serves your needs and works with your budget.
Just as paying the monthly minimum amounts to your credit card company will not help you chip away at your actual debt, low monthly health insurance premiums aren’t that great of a deal if you can’t afford the high deductible that usually comes with them. For example, you may think you’re getting an affordable plan because your healthcare premiums are only $120 per month. But if you’re hospitalized, for example, that one event could cost you thousands of dollars out of pocket before your coverage kicks in.
For tax year 2020, the Internal Revenue Service (IRS) defines a “high deductible health plan” (HDHP) as having a deductible of at least $1,400 for an individual and $2,800 for a family. However, HDHPs often have much higher deductibles. While out of pocket expenses (copays, deductibles, etc.) can’t be more than $6,900 for individuals and $13,800 for families, fewer than half of Americans have cash on hand for emergencies costing more than $1,000.
Of course, you have to find a plan with a reasonable monthly premium, too. The key is to determine what you can reasonably afford should you have to pay the entire deductible at once, and then consider your options within those parameters.
Get a handle on your financial wellbeing and health coverage
Now that you’re ahead of the curve and understand the importance of open enrollment 2021, it may also be a good time to learn about dealing with debt, money, and planning for your future. Our incredibly useful, simple-to-follow guide will help you find the tools you need to move toward a better financial future. Get started today by downloading our free How to Manage Debt guide.
* Editor’s Note: Here is some additional information that can clarify the different types of Medicare enrollment. The upcoming enrollment period, is for people currently on Medicare to make changes for 2021. If you do not currently have a Medicare plan, you cannot enroll during this period. The General Enrollment Period (Jan 1-Mar 31) is for those who missed their Initial Enrollment Period and don’t qualify for a Special Enrollment Period. You may be assessed penalties for late enrollment. Finally, the Medicare Advantage Open Enrollment Period (Jan 1-Mar 31) allows people with a Medicare Advantage plan to change to a different Advantage plan or enroll in Original Medicare.
- Unemployed Due to COVID-19? Here’s How That Affects Medical Benefits (Freedom Debt Relief)
- Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2020 (Kaiser Family Foundation)
- Will Coronavirus Testing Add to My Medical Debt? (Freedom Debt Relief)
- Your total costs for healthcare: Premium, deductible & out-of-pocket costs (HealthCare.gov)