By TRUDY LIEBERMAN
Rural Health News Service

Last fall I followed a Hastings, Neb., woman as she shopped for health insurance for her husband and daughter. She was disabled and covered under Medicare. After three months of calling toll free numbers, visiting with insurance agents, talking to insurance exchange officials, she was frustrated and confused.

The family finally chose a high deductible, bronze level offered by Blue Cross Blue Shield through the Nebraska health insurance exchange.

In return for a low monthly premium of $322 after an Obamacare subsidy of $141, the family assumed a $6,325 deductible for each person covered. It was the classic insurance gamble, and they lost.

The woman’s husband was hospitalized for kidney stones, and the bill about equaled the deductible. The family is whittling it down; the hospital is aggressively trying to collect its money. The family is now willing to pay more for better insurance coverage.

But they don’t have long to think about it. Once open enrollment begins again on Nov. 15, they have only one month to make a change, or the government will automatically re-enroll her in her current plan. Like millions of other Americans who have been covered by insurance plans under the Affordable Care Act, she was not aware of this latest twist.

There has been nothing straightforward about signing up for Obamacare, and there’s nothing straightforward about the process for re-enrolling. One thing is clear. If you don’t follow the rules, you could end up paying more for your insurance in 2015 even if you keep the same policy.

Review your coverage and make a change if necessary. And pronto! Here are the basics.

If you received a subsidy last year to buy coverage and gave the exchange permission to request your latest income information from the IRS, you need to visit the exchange and simply update the financial details on which your new subsidy will be based. If you don’t do that by Dec. 15, you will receive the same tax subsidy—and remain in the same policy—as last year.

That could bring an unwelcome surprise. Not only might you be stuck with a policy you don’t like, but you may be paying more out of pocket in 2015. Let’s say last year someone was enrolled in a plan with a $200 monthly premium and got a subsidy of $150. The person’s monthly out-of-pocket was $50.

But for next year the monthly premium increases to $220, but the subsidy stays the same because the income information was not updated. The policyholder will now pay $70 out of pocket each month instead of $50.

When Americans file their income tax returns next spring, the government will settle up with policyholders. Those who overpaid insurance premiums from their own pockets will get tax refunds; those whose subsidies turn out to be too large, based on their 2014 income, will have to send a check to the IRS to make up the difference.

While small differences in monthly out-of-pocket expenses—in this example $20—may seem trivial, even a seemingly small amount can be big deal for many people buying their own health insurance on the exchanges.

The actuarial consulting firm Milliman has found that even small premium increases—in the 5 percent range—can lead to out-of-pocket increases of between 30 and 100 percent for those with low incomes if income information is not updated. Data suggest that most individuals with exchange policies have incomes of $25,000 or less and most families have incomes around $50,000, says Paul Houchens, an actuary with Milliman.

Houchens told me several reasons premiums will be higher this year for many exchange buyers. Some will see decreases.

Insurers, which offered super low rates in the exchanges last year to entice more customers to their plans, are finding they need to increase their premiums. And in many parts of the country the benchmark plan -the second lowest cost silver level policy- on which subsidies are based has changed, meaning higher premiums for some people.

Premiums also go up each year gradually each year you get older. Because the Affordable Care Act allows insurers to charge older people three times more than younger ones, older people will certainly feel the pinch if last year’s subsidy is too low. They might get larger subsidies if they reapply.

What happens if you got a tax credit last year but did not give the exchange permission to request updated financial information from the IRS? Here is where it really gets dicey. You must visit the exchange and go through the process all over again to see if you are eligible for a subsidy. If you don’t do that by Dec. 15, you will be automatically re-enrolled and will get no subsidy for January.

If you decide before open enrollment ends on Feb. 15 that you want a different policy and you do update your information, you’ll get a subsidy for the rest of the year.

“This is a big issue for older people and those with lower incomes,” says Houchens, “The value of the subsidy could be several hundred dollars.”

We want to hear your questions and comments about your healthcare experiences. Tell us about your experiences with the Affordable Care Act and signing up for the exchange in your state. Write to Trudy at [email protected].