by Nina Roumell

The Story
March 31st, 2014 was the last day of open enrollment- the time period in which individuals and families can enroll in private health insurance. 

Since when can I only buy health insurance during a specific time?
Starting in 2014, the Affordable Care Act (aka Obamacare) implemented an open enrollment period from October 1st to March 31st to buy coverage for plan year 2014. You can only buy health insurance in this time frame unless you have a qualifying life event or a special enrollment status. To be covered in 2015 you will need to enroll during the next open enrollment period beginning on November 15th and ending February 15th.

A quick recap on Obamacare 
Obamacare is a law that passed in 2010. The law makes health care more affordable through financial assistance and implemented consumer protections.
• Insurers can no longer deny people coverage. Anyone who applies for coverage has guaranteed coverage. Before Obamacare, insurance companies frequently denied coverage to people with a ‘pre existing’ condition or charged them exorbitant rates.  
• Insurers can no longer kick sick people off of their plan. Before Obamacare, insurance companies could drop someone if they got sick.
• Bottom Line: Thanks to Obamacare insurers can no longer drop, deny, or hike up someone’s rates because of an illness or pre-existing condition.

A quick explanation on how health insurance works?
When you buy insurance from a particular insurer you are joining a risk pool and your premium dollars (monthly payments to the insurance company) go into a pot with everyone else’s premiums that bought insurance from the same company. People buy different types of plans from different insurance companies depending on how they plan on utilizing the health care system. Each insurance company negotiates the price of various services with different doctors and hospitals.    

When someone from the risk pool gets sick, the insurance company uses a portion of the dollars from the pot to pay all or part of the bill. Of course, not everyone in the risk pool has the same plan and some people will have more of their bill covered than other people. For example, someone who goes to the hospital with a gold plan will have more of the pot money go toward their bill than someone with a bronze plan. But the premium of a gold plan is greater than a bronze plan. The more money you put into the pot, the more money you can get out.   

What would happen if there was not an open enrollment period?
In order to stabilize our health care costs and the health care system, there must be a balanced distribution between high and low utilizers of the health care system with insurance. Insurance is meant to function when everyone pays into the same risk pool at the same time regardless of their current health status. Without an open enrollment period and a requirement to have coverage, many healthy people could forgo insurance until they became sick or injured and then purchase insurance when they needed to utilize health care, leaving only high utilizers in the insurance risk pool. Risk pools need premium dollars from healthy people to help cover the cost of high utilizers. Of course, healthy people also use health insurance for things like preventative care, but it is less frequent and low cost for the risk pool.  The open enrollment period means that everyone has to pay into the pot at the same time in order to be part of the risk pool, and means the risk pool will have a stable population of healthy and sick individuals in a given year.

Let’s look at how this plays out with hospitals. When people forego health insurance and go to the hospital, often for emergency care since they lack access to preventive services, a cost shift occurs. Hospitals must treat anyone who comes into the emergency room, regardless of their ability to pay, and must have additional revenue to cover the costs of those services rendered to uninsured patients. Hospitals start charging insurance companies more for their clients’ services to obtain this additional revenue when there are a large number of uninsured people seeking medical services. Consequently, insurance companies raise premiums for those who do purchase insurance. Prior to Obamacare, those people with insurance ended up paying for uninsured patients through their insurance premiums. When everyone has access to coverage and preventative services, the health care system is more cost effective, and providers and insurers have a more stable risk pool, which prevents large increases in premiums. 

Health insurance is a new concept to some Americans; most of us are accustomed to using goods and services immediately after we pay for them. Insurance is different; you are buying a shield to protect yourself- you get preventative care to stay healthy and if you do get sick, insurance will help cover high priced medical expenses. Everyone uses the health care system at some point no matter how healthy they think they are, so it’s important for all Coloradans to be covered. If something happens to you, you’re protected. Your insurance will help you stay out of debt and out of the emergency room.



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