Health Insurance Exchange
What the Obamacare Health Exchanges Are, and What You Should Do Now
The health insurance exchanges open for enrollment each year in November. These health care exchanges are a result of the Patient Protection and Affordable Care Act of 2010, also known as Obamacare. Twelve million Americans use the exchanges to buy insurance, and 85 percent of them receive a subsidy.
You can always use the exchanges to compare plans. You can also find out if you are eligible for a tax subsidy or Medicare.
When does Obamacare start? This is the question people ask when they want to know when they need to get the mandated insurance or pay the tax penalties.
The Tax Cut and Jobs Act of 2018 repealed the mandate as of 2019. President Trump instructed the Internal Revenue Service to ignore taxpayers who don't prove they have insurance. As a result, healthier people are dropping coverage. This leaves insurance companies with a higher proportion of sick enrollees. As these companies lose money, they question whether they can stay on the health exchanges.
Health Insurance Exchange Explained
The healthcare exchanges are marketplaces where you can choose the type of insurance that best meets your needs. They are either run by the state or the federal Department of Health and Human Services. Your state legislature made that decision. The federally-run exchanges were plagued with problems at start-up. But those problems have been fixed, and they are running smoothly now.
The exchanges provide an easy-to-follow series of questions to help you determine what the best plan is for you. They also define insurance terms, so you know exactly what you're getting. They do ask some surprisingly personal questions at the beginning. But that's just to get verified. It's not much different than when you fill out information for a loan. Here's where to visit the exchange in your state.
The exchanges will offer plans in four different categories: Bronze, Silver, Gold, and Platinum. These categories allow you to compare plans with the different copays, deductibles, and annual payment limits from various companies. Since insurance can be complicated, be aware of how you choose an insurance plan.
The biggest benefit of the exchanges is that they help you find health care discounts and benefits. For example, you may be eligible for expanded Medicaid if you live in one of the states that took this benefit.
If you earn more than this, but less than around $46,000 per person, you can get tax credits to help pay the monthly fees. You may also be eligible for reduced copayments or deductibles, depending on your income and the plan you choose. Note the specific income requirements are determined by comparing your income to the federal poverty level for each year. The summary of the Patient Protection and Affordable Care Act discusses its purpose, costs, and benefits.
Essential Health Benefits
All the insurance plans offered by the exchanges must cover the following 10 essential health benefits:
- Emergency room services and hospitalization.
- Outpatient care, including preventive and wellness visits, as well as chronic disease management. Preventive care visits have no copay.
- Lab tests.
- Maternity, newborn, and pediatric care.
- Mental and behavioral health treatment.
- Prescription drugs.
- Services and devices to help people with injuries, disabilities, or chronic conditions.
What You Should Do Now
If you already have insurance, you can probably keep it. That includes an individual plan you bought yourself; an employer plan which includes COBRA, short for the Consolidated Omnibus Budget Reconciliation Act; a retiree plan; Medicare; Medicaid; CHIP or Children's Health Insurance Program; TRICARE and other veterans health care programs; and Peace Corps Volunteer plans.
You may want to get a better plan though. For example, if your plan existed before March 23, 2010, it was "grandfathered in." That means it doesn't have to provide all of the essential benefits. You might want to change it for a new plan on the exchange. Find out more about grandfathered health plans. If you like the plan you have, you can keep it.
Small-business owners can also start researching plans now. You can see if you qualify for tax credits here. You don't have to provide insurance if you have fewer than 50 employees.
If you have 50 or more workers, you will have to provide insurance or face a penalty. Specifically, you'll be subject to a penalty even if just one worker finds a lower-cost plan on the exchange. Businesses didn't have to provide insurance until 2015. But now, companies must know their options. Management must know the specifics of what an employer’s shared responsibilities are. It makes sense to become familiar with the exchange now and with the plans offered on November 1. Here's where to get familiar with the Small Business Health Options Program Marketplace.
For a step-by-step guide to getting insurance on the exchanges, see my book The Ultimate Obamacare Handbook.