Why is Open Enrollment Only 6 Weeks Long?

Open enrollment is arguably the best time of year to buy health insurance. During November 1st through December 15th, individuals and families can shop the federal marketplace for health insurance plans. It’s important to keep in mind that these are the plans that cover pre-existing conditions.

Unfortunately, many people do not enroll during open enrollment, just to later find out that they cannot enroll until the following November.

This can be understandably frustrating.

So why is there only a 6-week open enrollment period? For that matter, why does health insurance even have an open enrollment period to begin with?

The reason is to prevent Adverse Selection.

Adverse Selection is a market situation where buyers and sellers have different information.

A common example with health insurance is when an individual waits until they know they are sick until applying for health insurance.

Without an Enrollment Period, the insurance companies fear people would only enroll into health insurance when they actually plan on using it.

Fortunately, there are Special Enrollment Periods for individuals and families who qualify. These include losing insurance due to a job loss, getting married, having a child, and more.

For a complete list of qualifying life events for a special enrollment period, visit healthcare.gov

If you have any questions about health insurance always speak with a licensed professional.