HI Rates Went Up this Year - but Subsidies Are Not?!!

[redeemed]

My exchange clients are calling in in droves from their renewal notices from their carriers. Most plans went up between 15 and 25% this year, no small increase but much better than some states are dealing with. However, for a person getting a large subsidy, a 20% rate increase can mean the difference between paying $200/mo and $400/mo for the same coverage. What we have found is the exchange will not increase their subsidy in order to offset the higher costs of their premiums this year. The premiums will always go up from year to year due to rate and age increases but I have been told by 3 different reps from the exchange that those with subsidies are going to keep the same amount of subsidy unless their income changes.

I have run the numbers through the subsidy calculator and it is showing that their subsidies SHOULD be going up next year due to these factors but they will not be applied apparently.

Do your clients have to re-apply EVERY YEAR just to keep their subsidy numbers up to date? I have been told that even re-applying won't change their subsidy amounts but I can't see that being the case.

 

[Yagents]

I have run the numbers through the subsidy calculator and it is showing that their subsidies SHOULD be going up next year due to these factors but they will not be applied apparently.

Do your clients have to re-apply EVERY YEAR just to keep their subsidy numbers up to date? I have been told that even re-applying won't change their subsidy amounts but I can't see that being the case.

It all depends on the second lowest silver plan in that county.
If it went up, then subsidy goes up and you should re-enroll to capture the new higher subsidy.
If it went down, then you can choose whether to re-enroll (but should), as the client will have a clawback for that amount at end of the year for the difference (received too much subsidy)

Yes, welcome to the new world of re-enrolling every year as all the variables will change each year.

 

[RayNY]

Yagents is completely correct (as far as we know).

While subsidy (theoretically) goes up by about 1-2% every year (based on FPL changes, income held constant), since it's based on the reference silver, and plans vary more than FPL adjustments each year, the subsidy is mostly based on the reference silver plan.

The exchange *may* recalculate APTC based on the new FPL table and reference silver, using the existing annual income. They *may* do what Yagents said, and just re-issue the same APTC amount and let you reconcile at tax time. No one has gone through this transition yet, so we're not entirely sure. Either way, the best bet is to re-evaluate annually to ensure accuracy.

 

[redeemed]

So I ran my first guinea pig client from last year through the exchange and re-applied for his subsidy, it did indeed go up as projected but why can't they just automatically adjust it? We now need to reapply for ALL of our exchange business every single year just to keep the subsidy numbers current because they don't automatically adjust them, this is absurd.

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It all depends on the second lowest silver plan in that county.
If it went up, then subsidy goes up and you should re-enroll to capture the new higher subsidy.
If it went down, then you can choose whether to re-enroll (but should), as the client will have a clawback for that amount at end of the year for the difference (received too much subsidy)

Yes, welcome to the new world of re-enrolling every year as all the variables will change each year.

Yeah, I know how it is calculated, we got several new companies in Illinois this year and we have cheaper silver plans but the costs still have gone up and the client has gotten older, (rates are still more for 61 year old than a 62 year old) which should necessitate an automatic increase in subsidy.