What to Expect from the Affordable Care Act in 2025: Key Changes in Individual and Family Health Insurance (the negative and the positive)

By D. Kenton Henry
Editor, Broker, Agent
9 August 2024

For all Americans seeking to obtain or renew “Individual and Family” health insurance in 2025, there are (as always) certain changes to be anticipated.

Open Enrollment Period (OEP)—the period when all U.S. citizens may purchase health insurance for a January 1 effective date of the coming calendar year—runs from November 1st to December 15th. For those who, for whatever reason, want a February 1 effective date—the cutoff is January 15th. After that, a person must qualify for a Special Election Period (SEP). The most common of these is “loss of coverage through no fault of one’s own. During a SEP, an individual has 60 days to pick a plan. That plan will become effective on the first of the month after the date of the application.

To begin, let’s get the negatives out of the way.

THE NEGATIVE:

In 2025, ACA (Affordable Care Act) individual and family health insurance premiums are expected to increase by a median of 7%. This rise is driven by several key factors, including the increasing costs of hospital services, workforce shortages, and growing demand for high-cost specialty medications like GLP-1 drugs commonly used for weight loss and diabetes management (such as Ozempic). General inflation and healthcare provider consolidation are also contributing to these hikes.

Although most enrollees in ACA plans receive subsidies that will mitigate the impact of these increases, the cost burden on the federal government will grow as more funds will be needed to cover the subsidies. Insurers across the country are proposing premium increases that vary significantly, ranging from 5% to 10% on average, with some areas seeing rates fluctuate outside this range.

THE POSITIVE:

As we approach 2025, the Affordable Care Act (ACA) continues to evolve, aiming to address the shifting landscape of healthcare needs and to improve the accessibility and affordability of health insurance for individuals and families. The upcoming changes reflect ongoing efforts to enhance coverage, reduce costs, and ensure that more Americans have access to quality care. Here’s a comprehensive look at what you can expect from the ACA’s individual and family health insurance provisions in 2025.

1. Expanded Subsidies and Enhanced Affordability

One of the most significant changes coming in 2025 is the expansion of subsidies for health insurance premiums. Building on previous enhancements, such as those from the American Rescue Plan Act and the Inflation Reduction Act, the ACA will offer even more robust premium assistance. These expanded subsidies are designed to make health insurance more affordable for a broader range of income levels, particularly benefiting middle-income families who previously struggled with premium costs.

For 2025, the eligibility for premium tax credits will be extended, and the income thresholds for receiving assistance will be adjusted to account for inflation and rising living costs. This means that more individuals and families will qualify for financial help, reducing the burden of monthly premiums and making comprehensive coverage more accessible.

2. Increased Cost-Sharing Reductions

In addition to expanding premium subsidies, the ACA will also introduce enhanced cost-sharing reductions (CSRs). These reductions will lower out-of-pocket costs such as copayments, coinsurance, and deductibles for low- and moderate-income families. The aim is to make healthcare services more affordable at the point of care, not just in terms of monthly premiums.

The improved CSRs will be particularly beneficial for those who purchase coverage through the ACA marketplaces, ensuring that even the most essential health services, like prescription drugs and specialist visits, are within reach for more Americans.

3. Broader Coverage Options and Flexibility

The ACA will introduce more flexibility in plan design and coverage options starting in 2025. Health insurance plans available through the ACA marketplaces will offer a wider variety of coverage levels and network options, allowing individuals and families to choose plans that better match their specific needs and preferences.

For example, there will be more options for plans that cater to different health conditions or provide enhanced preventive care services. This diversification aims to address the diverse needs of the population and provide more tailored solutions to meet individual health requirements.

4. Enhanced Support for Mental Health and Substance Use Treatment

Recognizing the growing importance of mental health and substance use treatment, the ACA will place a stronger emphasis on coverage for these services in 2025. Insurance plans will be required to offer more comprehensive mental health benefits, including increased access to therapy, counseling, and substance use disorder treatment.

This change reflects a broader understanding of the integral role mental health plays in overall well-being and aims to reduce the barriers to accessing necessary mental health services.

5. Strengthened Protections Against Discrimination

The ACA will bolster protections against discrimination in health insurance. New regulations will ensure that insurers cannot deny coverage or charge higher premiums based on pre-existing conditions, gender, or other personal factors. Additionally, there will be greater oversight to ensure that insurance plans adhere to these non-discrimination policies.

These protections aim to create a more equitable healthcare system and to ensure that all individuals have fair access to health insurance, regardless of their personal circumstances.

6. Improvements to the Enrollment Process

The enrollment process for ACA health insurance plans will become more streamlined and user-friendly. In 2025, the federal and state-based marketplaces will introduce enhanced digital tools and support services to assist individuals and families with plan selection and enrollment. This includes improved online interfaces, more robust customer support, and clearer guidance throughout the enrollment period.

The goal is to reduce barriers to accessing coverage and to make it easier for people to navigate their options and secure the insurance that best fits their needs.

7. Emphasis on Preventive and Wellness Services

The ACA will continue to focus on preventive care and wellness services. In 2025, there will be increased incentives for health plans to cover preventive services without cost-sharing and to provide additional resources for wellness programs. This shift aims to encourage healthier lifestyles and early detection of potential health issues, ultimately reducing long-term healthcare costs and improving overall public health.

Conclusion:

The changes to the ACA’s individual and family health insurance provisions in 2025 represent a significant step forward in making healthcare more affordable, accessible, and equitable. With expanded subsidies, increased cost-sharing reductions, broader coverage options, and enhanced support for mental health, the ACA is set to offer even greater support to those in need. As these changes are implemented, individuals and families can expect a more supportive and responsive healthcare system that better meets their needs and helps them achieve better health outcomes.

*Please refer to Feature Articles 1 and 2 below the comments box for details on upcoming changes.

Whether you feel you qualify for an “Advanced Premium Tax Credit” (premium subsidy) or not, I can guide you through the process of determining such and enrolling in the plan of your choice for 2025. My years of experience specializing in medical insurance, including ever since ACA compliant plans became available on January 1, 2014, make the process go as quickly and smoothly as possible. Please contact me. There is no obligation to utilize my service and no charge for doing so. If you elect to acquire a policy I introduced you to, I only ask that you go through me to do so. You will be charged no more for the policy than if you walked through the front door of the insurance company and acquired it directly. I am currently appointed with every insurance company doing business in SE Texas; however, I represent you and your interests first and foremost.

Thank you for considering my service,

D. Kenton Henry, Jr
All Plan Med Quote
Office: 281-367-6565
Text my cell 24/7 @ 713-907-7984
Email: Allplanhealthinsurance.com@gmail.com

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FEATURE ARTICLE 1:

THE KAISER FAMILY FOUNDATION (KFF) - The independent source for health policy research, polling, and news.

The independent source for health policy research, polling, and news.

Tammie Smith
August 5^th, 2024                                                                                                                      

Marketplace Insurers are Proposing a 7% Average Premium Hike for 2025 and Pointing to Rising Hospital Prices and GLP-1 Drugs as Key Drivers of Costs

ACA Marketplace insurers are proposing a median premium increase of 7% for 2025, similar to the 6% premium increase filed for 2024, according to a new KFF analysis of the preliminary rate filings. Insurers’ proposed rate changes – most of which fall between 2% and 10% – may change during the review process.

Although the vast majority of Marketplace enrollees receive subsidies and are not expected to face these added costs, premium increases generally result in higher federal spending on subsidies. The justifications insurers provide for these premium changes also shed light on what is driving health spending more broadly.

Insurers cite growing health care prices – particularly for hospital care – as a key driver of premium growth in 2025, as well as growing use of weight loss and other specialty drugs, according to KFF’s examination of publicly-available documents.

This year, increases in the prices insurers are paying for medical care tend to affect premiums more than growth in the utilization of care. Insurers say workforce shortages and hospital market consolidation, which can put upward pressure on health care costs and prices, are increasing 2025 health insurance premiums.

Meanwhile, growing demand for Ozempic, Wegovy, and other costly GLP-1 drugs, which are used to treat diabetes and obesity, is increasing prescription drug spending.

FEATURE ARTICLE 2:

KFF  The independent source for health policy research, polling, and news.

How Narrow or Broad Are ACA Marketplace Physician Networks?

Matthew Rae, Karen Pollitz, Kaye Pestaina, Michelle Long, Justin Lo, and Cynthia Cox
Published: Aug 26, 2024

One way insurers seek to control costs is to limit the size of the physician networks serving their plans. Providers agree to lower fees and other terms with insurers in order to be included in one or more of the networks they offer. Insurers then either limit coverage to services provided by network providers or encourage enrollees to use network providers through lower cost sharing. Reducing the number of providers in-network can effectively reduce plan costs, but it also limits enrollees’ choices, increases wait times, and can complicate the continuity of care for those switching plans. Enrollees receiving care from out-of-network providers often face coverage denials or substantially higher out-of-pocket expenses. These factors highlight how the size and composition of provider networks impact access to care and the financial protection insurance provides enrollees.

The breadth of provider networks in the Affordable Care Act (ACA) Marketplaces has been the subject of significant policy interest. Insurers often compete aggressively to be among the lowest-cost plans, potentially leaving enrollees with poor access. According to the 2023 KFF Survey of Consumer Experiences with Health Insurance, one in five (20%) consumers with Marketplace plans reported that in the past year, a provider they needed was not covered by their insurance, and nearly one in four (23%) said a provider they needed to see that was covered by their insurance did not have appointments available. Enrollees with Marketplace coverage were more likely than those with employer coverage to face these challenges. While the Centers for Medicare and Medicaid Services (CMS) establishes minimum standards for the adequacy of provider networks for Marketplace plans, insurers retain considerable flexibility in how they design networks and how many providers they include. As a result, the breadth of plan networks varies considerably within counties, presenting challenges for consumers who need to select a plan with little information on the network breadth of their options.

This brief examines the share of doctors participating in the provider networks of Qualified Health Plans (QHPs) offered in the individual market in the federal and state Marketplaces in 2021, and how network breadth affected costs for enrollees. The analysis uses data on the physician workforce, from 2021, matching that to provider networks in marketplace plans from the same year. Doctors filing Medicare Part B claims in or near each county are considered to be part of the active workforce available to Marketplace enrollees. Only doctors filing a claim and therefore known to have engaged in patient care in 2021 were included. The share of local physicians participating in a network is a rough measure of how much access enrollees have; depending on the number of providers in the area and the workloads of those physicians, enrollees in plans with similar breadths may face different wait times to book appointments. The share of local physicians participating in-network distinguishes whether enrollees have a broad or narrow choice of local doctors. Those in plans including a small share of doctors have fewer options when trying to find a provider with available appointments. See the Methods section for more details.

Key Findings

• On average, Marketplace enrollees had access to 40% of the doctors near their home through their plan’s network, with considerable variation around the average. Twenty-three percent of Marketplace enrollees were in a plan with a network that included a quarter or fewer of the doctors in their area, while only 4% were in a plan that included more than three-quarters of the area doctors in their network.
• Some of the narrowest network plans were found in large metro counties, where enrollees on average had access to 34% of doctors through their plan networks. Marketplace enrollees in Cook County, IL (Chicago) and Lee County, FL (Fort Myers) were enrolled in some of the narrowest networks (with average physician participation rates of 14% and 23%, respectively). Plans in rural counties tended to include a larger share of the doctors in the area, though rural counties had fewer doctors overall relative to the population compared to large metro counties.
• On average, more than one-quarter (27%) of actively practicing physicians were not included in any Marketplace plan network.
• On average, Silver plans with higher shares of participating doctors had higher total premiums. Compared to plans where 25% or fewer of doctors participated in-network, those with participation rates between 25% and 50% cost 3% more while those with participation rates of more than 50% cost 8% more. (Silver plans are midlevel plans in terms of patient cost-sharing and are particularly significant because they are the benchmark for federal premium subsidies.)
• More than 4 million enrollees (37% of all enrollees) lived in a county in which the two lowest-cost Silver plans included fewer than half of the doctors in the area and a broader plan was available. In order for these enrollees to enroll in the cheapest Silver plan that included at least half the doctors, they would have needed to spend an additional $88 per month.

How Broad are Marketplace Plan Physician Networks?

On average, enrollees in the ACA Marketplaces had access to 40% of the doctors near their homes through their plan’s network. This share was similar for pediatric and non-pediatric doctors.

A quarter of enrollees were in plans where fewer than 26% of the local doctors participated in their plan’s network, while another quarter were in plans where at least 54% of local doctors participated.

There is no formal definition of what constitutes a narrow network plan. Some researchers have labeled plans covering fewer than a quarter of the physicians in an area as narrow. Under this definition, 23% of Marketplace enrollees were in a narrow network plan. About seven in ten enrollees (70%) were in a plan that included half or fewer of the doctors near their home. Only 4% of enrollees were in a plan that included at least three-quarters of local doctors, and 1% of enrollees were in a plan that included at least 85% of local doctors.

How Broad Are Plan Networks for Primary Care and Physician Specialties?

Even a plan with a relatively large share of local doctors participating in its network may not have enough doctors in different specialties to meet the needs of plan enrollees. In particular, enrollees with chronic conditions may look for plans that include their doctors across multiple specialties.

Primary Care Physicians: Marketplace enrollees, on average, had plan networks that included 43% of the primary care doctors in their area. A quarter of Marketplace enrollees had plan networks that included fewer than 25% of primary care doctors. More than half a million Marketplace enrollees were in a plan with fewer than 50 in-network primary care doctors near their homes. As is the case for physician networks overall, primary care physician networks tended to be narrower in large metro counties, where the average enrollee had a plan network that included 35% of local primary care doctors. While primary care doctors account for a smaller share of spending than specialists, they play an important role in insurers’ network design either by acting as gatekeepers to specialty care and referring patients to specialists.

Specialists: Marketplace plan networks tended to include a larger share of practicing medical and surgical specialists than primary care physicians. The average Marketplace enrollee had a plan network that included 52% of medical specialists and 53% of surgical specialists in their area; however, one-quarter of Marketplace enrollees had access to fewer than 34% of the medical specialists and 32% of the surgical specialists. On average, Marketplace enrollees had plan networks that included 21% of hospital-based physicians, which may include anesthesiologists, radiologists, pathologists, and emergency physicians.¹ Information on additional specialties is available in the appendix.

Psychiatrists: Marketplace networks for psychiatrists were smaller. On average, Marketplace enrollees had access to 37% of the psychiatrists in their area through their plan.² Twenty-five percent of Marketplace enrollees were in a plan that included 16% or fewer of the psychiatrists near their homes.

How Does Network Breadth Vary by Location?

Network breadth varied based on where plans were offered, with those in urban areas having lower physician participation rates, on average. In 2021, CMS designated county types based on their population and density; there are 78 Large Metro counties and 723 Metro counties. Most Marketplace enrollees lived in one of these urban county designations, including 38% in Large Metro counties and 48% in Metro counties.

Urban Counties: While Large Metro and Metro counties had more doctors, smaller shares of them participated in Marketplace plan networks compared to doctors in more rural areas. Marketplace enrollees in Large Metro counties, on average, had access to 34% of the doctors in their area through their plan networks, with a quarter enrolled in a plan whose network included fewer than 23% of local doctors. Marketplace enrollees in Metro counties, on average, had access to 42% of local doctors through their plan networks, while those in Rural counties, on average, had access to 52% of local doctors.

The 30 counties with the highest enrollment in the Marketplaces collectively represented 34% of all Marketplace enrollees and 21% of the U.S. population. These counties are typically urban and disproportionately in states that have not expanded Medicaid under the ACA.³

There was significant variation in network breadth across these 30 counties. Differences in average network breadth across these counties are the result of a combination of factors including the physician workforce, market characteristics, and insurer strategies. With networks with low provider participation rates, most Marketplace enrollees in Cook County, IL (Chicago) had access to fewer than one in six (14%) doctors in their area on average. Similarly, Marketplace enrollees in Lee County, FL (Fort Myers) and Fort Bend County, TX (outside Houston) had in-network access to less than a quarter of local doctors (23% and 24%, respectively). In contrast, some larger US cities had broader networks than those available in Houston and Chicago. For example, enrollees in Middlesex County, MA (outside Boston), Gwinette County, GA (outside Atlanta), and Travis County, TX (Austin) had in-network access to almost half of the doctors in their areas on average (46%, 46%, and 49%, respectively).

In 2021, 14% of Marketplace enrollees (1.6 million people) lived in four counties: Los Angeles, CA; Miami-Dade, FL; Broward, FL (Fort Lauderdale); and Harris, TX (Houston). On average, enrollees in each of these counties had in-network access to less than 4-in-10 local doctors (25%, 36%, 38%, and 25%, respectively).

High physician participation rates may not result in meaningful choice if there are few doctors in the area in the first place. For example, enrollees in Hidalgo County, TX (McAllen), on average, had access to 61% of local doctors through their plan networks, but this may have reflected chronic shortages in the number of practicing doctors in the county.⁴

Rural Areas: On average, Marketplace enrollees in Rural counties had access to about half (52%) of local doctors through their plan networks, higher than the average in more urban counties. The higher provider participation rates in rural areas, however, need to be considered in the context of the small number of primary care doctors and specialists practicing in these areas. For example, 2.9 million Marketplace enrollees in Rural counties had fewer than 10 dermatologists in their local area, 2.5 million had fewer than 10 gynecologists, and 1.7 million had fewer than 10 cardiologists in their plan networks. In some cases, these providers may already have full panels, and an enrollee’s choice may be even more limited than the number of physicians who accept the plan.

County Demographics: On average, Marketplace enrollees living in counties with a higher share of people of color had narrower networks than counties with a smaller share.⁵ The quarter of Marketplace enrollees living in the counties with the highest share of people of color had access to 34% of doctors in-network, on average, compared to 42% in counties with a smaller share of people of color. This difference may reflect the higher concentration of people of color in large metro counties, where plans typically had narrower networks.

How Much Choice Do Consumers Have Over Networks in the County Where They Live?

Provider networks vary within counties, meaning that individuals shopping for a Marketplace plan may have the option to enroll in plans with vastly different network breadths. In 2021, 70% of enrollees (nearly 8 million people) lived in a county where one or more plans covered fewer than a quarter of the doctors in the area. Among these enrollees, nearly 4.3 million (54%) also had the opportunity to enroll in a plan that included mor