Learn About Healthcare Exchanges Early

by | Sep 23, 2013 | *Financial Awakenings, Health, Insurance, Weekly Column

PillsRunningThe opening date is October 1. By then, the competition will be lined up and ready to go after bronze, silver, gold, and even platinum.

These competitors aren’t athletes, but insurance providers. The field they are entering is the new health insurance exchanges mandated by Obamacare.

Beginning January 1, 2014, nearly everyone in the US will need to have health insurance or pay a tax penalty. Those not insured through their employers can apply for coverage through these health insurance exchanges, also called “marketplaces.” Enrollment begins October 1 for coverage starting in January.

These exchanges are intended to make it easier to find insurance providers and compare their coverage and costs. Each state’s exchange website will list all the policies available in that state, with prices and policy provisions. So far, over half of the states (including South Dakota) have opted to use exchanges managed by the federal government instead of setting up their own.

Bronze, silver, gold, and platinum describe the four basic categories of policies that will be available through the exchanges at different costs. Here is a very brief summary of each category.

The least expensive option is a bronze plan, which might be the best choice for younger people with lower incomes and good health. The plan will pay 60% of health care costs and the insured will be responsible for 40%.

The second level, silver, will pay 70% of health care costs. Gold covers 80%, and a platinum plan covers 90%. Obviously, the categories with higher benefits also will have higher premiums.

All these plans are required to cover “essential health benefits.” These include preventive and wellness care like cancer screening, chronic disease management, pediatric care, many prescription drugs, injury rehabilitation, mental health and addiction treatment, maternity and newborn care, hospitalization, and emergency services. Companies are not allowed to deny coverage or charge more for those with pre-existing conditions. There are no lifetime benefit limits.

The requirement to have health insurance coverage, the “stick” of Obamacare, is accompanied by a “carrot” in the form of federal subsidies to help pay insurance premiums. It’s estimated that two-thirds of Americans will be eligible for subsidies, which will be figured on a sliding scale. The upper limit for qualifying is four times the federal poverty level, which amounts to about $88,000 a year for a family of four.

This summary is just the barest outline of the health care changes coming our way. To find out more, it’s a good idea to spend some time online, especially at two sites that offer a lot of helpful information.

One is the federal government website. It provides links to the state exchanges, plus detailed information that for the most part is explained in straightforward, plain English. The second site is the Henry J. Kaiser Family Foundation. An especially useful tool available here is a calculator to determine the federal subsidy that applies at your family’s income level.

The elements of Obamacare that take effect in 2014 represent a huge shift in the way we cover health care costs. I strongly recommend that you start now to figure out what this will mean for you and your family. Don’t wait until December and end up making hasty decisions in a last-minute rush. The more informed you are, the better insurance choices you can make.

The changeover to the new insurance environment is likely to be chaotic and confusing. Navigating it will take some energy, commitment, and stamina. When all the scrambling is over, we can only hope the ultimate winners will be the American people.

Print Friendly, PDF & Email