The Patient Protection and Affordable Care Act, also known as the Affordable Care Act, PPACA, and Obamacare created health insurance marketplaces, or exchanges, that are set to open in 2014. These marketplaces are new, and as will all new things, there will be many questions asked. Here are some of the aspects that you will need to know in order to make a good decision about whether the exchanges are for you and your family.
What is a Health Insurance Marketplace?
A health insurance marketplace is an online website where individuals can compare plan designs and premiums from various medical insurance companies. Unlike today’s individual insurance market, where a person has to go through an online broker or shop for plans on their own, the marketplaces will have all the plans on the computer screen in front of them. The plans will be easy to read and understand. Once the decision has been made as to which plan to enroll in, the actual enrollment can be done instantly from the marketplace’s website.
Who Manages the Marketplaces?
The Affordable Care Act is a law passed by the United States government, but the responsibility of managing the health insurance marketplaces falls to each individual state. However, if a state does not want to open their own marketplace, they can defer to the Federal Marketplace.
What this means is that in order to enroll in a marketplace, an individual will need to go to his or her own state’s exchange, which can be found here.
When Do the Marketplaces Open?
The first effective date of plans purchased on a health insurance marketplace will be January 1, 2014. However, Open Enrollment begins on October 1, 2013. On that day, individuals will be eligible to purchase a medical plan.
It is important to note that not all online exchanges will be ready to roll on October 1. In that case, people will need to enroll via telephone.
What Kinds of Plans are Available in the Marketplaces?
The exchanges will not have the same number of plans available as an individual insurance company offers outside of the exchange. However, there will be a good spread of plan benefits.
The marketplaces will offer 4 levels of plans. These plans will be called Platinum, Gold, Silver, and Bronze. The Platinum plan will offer the richest benefits, followed by Gold, Silver, and then Bronze.
Individuals that want low premiums can choose the Bronze plan, but their out of pocket exposure will be higher than the other plans. If someone is willing to pay high premiums in exchange for low out of pocket risk, they can purchase the Platinum plan.
What Will be the Cost of the Plans?
This is the question that everyone wants to know the answer to. The cost of the plans will of course vary by plan value, but will also vary by state. Insurance companies will be the ones providing the plans, and they will use their underwriting guidelines to develop premiums. The hope is that competition between the companies will keep the cost down.
Is Help Available to Pay for the Premiums?
Some people will be able to receive tax credits to help offset the cost of a plan purchased on the exchange. If an individual makes less than 400% of the poverty level and is not eligible for Medicaid, they can receive premium assistance. The health insurance marketplaces will be able to determine this assistance during the enrollment session.
Marketplaces can Ease the Burden of Purchasing Health Insurance
The health insurance marketplaces were designed to help people find affordable and comprehensive coverage for their healthcare needs. Inevitably, some tweaks will need to be made, but all-in-all, the exchanges will be a great place to find good insurance.