Health Insurance Exchange

What the Obamacare Health Exchanges Are, and What You Should Do Now

health exchanges accessed with a laptop
The exchanges allow you to shop online for a health care plan that meets your needs. Photo: Cultura/Getty Images

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. (Source: "Put This Date on Your Obamacare Calendar," Vox, March 31, 2017.) 

You can always use the exchanges to compare plans.

You can also find out if you are eligible for a tax subsidy or Medicare. For more, see When Does Obamacare Start?

If you don't have insurance for nine months out of each year, you must pay an Obamacare tax. See if you qualify for an exemption from the tax.

What Is a Health Insurance Exchange?

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 is the best plan 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.

For more, see How Do I Choose Insurance?

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. For details, see Summary of the Patient Protection and Affordable Care Act. (Source: "What Is the Health Insurance Marketplace?" HealthCare.gov.)

Essential Health Benefits

All the insurance plans offered by the exchanges must cover the following ten 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 Should You Do Now?

    You can compare plans on the exchanges, and use the rest of the site to get a lot of questions answered. Find out How to Get Obamacare.

    If you already have insurance, you can probably keep it.  That includes an individual plan you bought yourself, an employer plan (including COBRA), a retiree plan, Medicare, Medicaid, CHIP, TRICARE and other veterans health care programs, and Peace Corps Volunteer plans.

    However, you may want to get a better plan. 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 at Grandfathered Health Plan. 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. Find out more about this in Businesses Don't Have to Provide Insurance Until 2015. Specifically, you'll be subject to a penalty even if just one worker finds a lower-cost plan on the exchange. Find the specifics at What Is the Employer Shared Responsibility? Therefore, 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 SHOP Marketplace.

    Find out everything else you can do now at How Can I Get Ready?

    If you need insurance now, you can still use the exchanges to search for a private plan. For more, go to Healthcare.gov.

    More on Obamacare

    For a step-by-step guide to getting insurance on the exchanges, see my book The Ultimate Obamacare Handbook (2015 - 2016).