Affordable Care Act Marketplaces ExplainedSave as Favorite
By Joanna Morales, Esq.,
CEO, Triage Cancer
Are you employed, but don’t get health insurance through your employer?
Do you feel stuck in your job, because you are worried about losing your health insurance?
Does your employer offer you health insurance, but it is too expensive or the coverage isn’t very good?
Are you currently unemployed and needing access to health insurance?
If you answered “Yes” to any of these questions, then the State Health Insurance Marketplaces might offer you a new way to get health insurance.
The Patient Protection and Affordable Care Act (ACA), also referred to as health care reform or Obamacare, created these “Marketplaces,” which are sometimes referred to as “Exchanges.” On October 1, 2013, the State Health Insurance Marketplaces opened for business across the country.
Marketplaces vary state by state, with 17 states and Washington, D.C. running their own Marketplace, 27 states letting the federal government run their Marketplace, and 7 states partnering with the federal government to run their Marketplace in 2014. For states that run their own Marketplace you can visit their websites directly to learn more or you can visit www.HealthCare.gov to find information on your health insurance options in any state.
Insurance companies had to apply to sell their plans through each Marketplace. One of the requirements is that annual deductibles for plans sold through the Marketplaces cannot be more than $2,000 for an individual plan and $4,000 for a family plan.
The ACA also limits how much consumers are required to pay out-of-pocket for medical expenses (other than their premiums) when they buy health insurance plans in the Marketplaces. In 2014, the cap on these expenses is $6,350 for an individual plan and $12,700 for a family plan. After these maximums are reached, insurance will cover 100% of the medical expenses. These caps will help keep out-of-pocket costs to a certain amount and stem the tide of people having to declare bankruptcy because of their medical bills.
In every Marketplace, there will be four main categories of insurance plans available to individuals, families, and small businesses (under 50 full time employee equivalents). These four levels of insurance plans are named Platinum, Gold, Silver, and Bronze. The main difference between these categories lies in how much the insurance company will pay, and how much the individual will pay for their medical expenses (otherwise known as a “cost-share” or “co-insurance” amount).
With the Platinum plan, you would pay 10% of your medical costs and the insurance company would pay for 90% (Gold = 80/20; Silver = 70/30; and Bronze = 60/40). There is also a fifth category of plans called Catastrophic plans. These very limited plans will only be available to individuals under 30 years old and those who qualify for the financial hardship exemption from the individual mandate.
People who buy plans in the Marketplaces may also qualify for financial assistance to help them pay for their health insurance. This financial assistance is based on income level and family size. For example, individuals who have incomes up to $45,960 may be eligible for a premium tax credit that would lower their monthly premium. In addition, individuals who have incomes up to $28,725 may also be eligible for cost-sharing subsidies. These subsidies will reduce the cost of health care expenses an individual or family has to pay when they receive medical care (e.g., lowering the co-payment you make when you visit the doctor’s office).
When you apply for a health insurance plan in the Marketplace, you will be asked to include some of your financial information, whether or not you are employed, and if your employer currently offers you coverage – this is so the Marketplace can determine if you are eligible for any of these financial assistance options.
Enrollment in plans in the Marketplace will be open until March 31, 2014. However, in order to have coverage start on January 1, 2014, you must purchase a plan by December 15, 2013. Even if you sign up for coverage today, your coverage will not begin until January 1, 2014.
For more information, visit www.HealthCare.gov.
Please note that the above information is designed to provide general information on the topics presented. It is provided with the understanding that the Cancer and Careers is not engaged in rendering any legal or professional services in the information provided above. The information provided should not be used as a substitute for professional services.