The countdown to the launch of the new online Health Insurance Marketplace is on. Are you ready? If you, like many Americans, have questions about what the Marketplace is and what it does, there are excellent resources available to help answer these questions. Here are some of the most frequently asked questions:
The Health Insurance Marketplace is a service where individuals and small businesses can compare, and, ultimately, purchase health insurance. The Marketplace will offer health insurance plans to individuals under the American Health Benefits Exchange, and to small employers (fewer than 50 or 100 employees, depending on the state) under the Small Business Health Options (SHOP) Exchange. No matter where you live in the U.S., with the Marketplace, you will be able to compare health insurance options based on price, benefits, quality, and other key plan features. Each state can choose whether to operate its own Marketplace, partner with the Department of Health and Human Services (HHS) to run some of the functions of their portion of the Marketplace, or have their portion of the Marketplace fully supported by HHS. A final list of state-run and HHS-supported Marketplaces will be available in October. To learn the status of your state’s Marketplace, visit: www.healthcare.gov/marketplace.
To Use the Marketplace or Not to Use the Marketplace? That is the Question
Not everyone needs to enroll in a Marketplace plan. According to the U.S. Census Bureau, 55% of Americans had employment-based insurance in 2011. The Marketplace is intended for people who are self-employed, employed by small businesses that do not offer health insurance, or otherwise under-insured or uninsured. This is not to say that people who have health insurance through their employer can’t use the Marketplace. It all depends on which option (Marketplace plan or employer provided plan) is the best and most cost-effective choice for you and your family. Most people who choose to sign up with a Marketplace plan will get some help with costs. However, if an employer offers an employee an insurance plan that is affordable (one that costs the employee less than 9.5% of annual salary), then that employee still could choose a Marketplace plan, but they would not be eligible for premium assistance in the Marketplace. Other people may qualify for lower costs on their monthly premiums and out-of-pocket costs or get free or low-cost coverage from Medicaid or CHIP.
Choosing a Marketplace Plan
Whether you have employer-provided insurance or not, you will need to look at your current plan, its benefits, and the out-of-pocket costs (premiums, deductible, copays, etc.), and compare it to plans available on the Marketplace. Compare plans based on what is important to you. Choose the combination of price and coverage that fits your needs and budget. When making the comparison, some things to consider are:
• Whether you can keep your doctor on a Marketplace plan
• If and how your medications are covered, and
• The cost of your monthly premium verses deductible cost when you have a major procedure
When you apply on the Marketplace, you can see all plan options available to you and enroll in the plan that works best for you. You also will find out if you can qualify for lower costs on your monthly premiums and lower out-of-pocket costs for private insurance plans. As part of the application process, you will learn if you qualify for free or low-cost coverage available through Medicaid or the Children’s Health Insurance Program (CHIP). Information about plan prices and benefits will be written in simple language, so you will know how much you will pay for which benefits and protections before you enroll.
For a helpful list of what to consider when comparing plans, see NHF’s Personal Health Insurance Toolkit.
Benefits Covered by Marketplace Plans
Insurance plans in the Marketplace are offered by private insurance companies. These plans cover the same core set of benefits, called essential health benefits. All insurance plans must cover essential health benefits under the new health care laws. No plan can turn you away or charge you more because you have an illness or medical condition. They must cover treatments for all conditions. Plans can’t charge women more than men for the same plan. All health insurance plans available on the Marketplace must offer comprehensive coverage, including doctor visits, hospital stays, wellness and prevention services, and medication. Each plan is considered a Qualified Health Plan (QHP). A QHP is a plan that meets certain minimum standards, including offering all essential health benefits requirements and not discouraging enrollment in the plan by people with significant health needs. A QHP plan must present benefits and plan options in a standardized format, provide a quality-improvement strategy, use a uniform enrollment form, and meet other quality and reporting requirements.
Applying for Insurance on the Marketplace
You can apply for Marketplace coverage three ways: online, by mail, or in-person with the help of a Navigator or other qualified helper. Telephone help and online chat will be available 24/7 to help you complete your application. You can go online to learn more about Marketplace plans now. Open enrollment starts October 1, 2013 and ends March 31, 2014. Plan prices will be available on October 1, too. Coverage by Marketplace plans starts as soon as January 1, 2014.
Categories of Coverage & Financial Assistance
The Marketplace will offer four categories of health insurance coverage: Bronze, Silver, Gold, and Platinum. Assistance, in the form of Premium Assistance Credits or Cost-Sharing Subsidies, will be available to people who qualify to pay for these plans. The type and amount of assistance will be based on the amount of money you make and the size of your family. Cost-Sharing Subsidies will be available for people who have incomes from 100% up to 400% of the federal poverty level – or about $24,000 to $94,000 a year for a family of four.
The amount of Premium Assistance Credits is determined based on the price of the Silver level plans available in the area in which you live. The premium credits will be delivered as tax credits and will be available to all people who are eligible for them, whether they file taxes or not. The credits will be paid directly to the insurer that the individual chooses, with individuals responsible for the remaining premiums. The credits will be delivered in advance, so that people do not have to pay all of their premiums up front and wait for reimbursement. Only Silver level plans and above will qualify for premium assistance credits.
People with lower incomes will receive more Premium Assistance Credits and Cost-Sharing Subsidies to help them pay for coverage. When you fill out your Marketplace application, you will find out how much you can save based on your income and family size. According to www.healthcare.gov, most people who apply will qualify for lower costs of some kind.
Price Tags for Marketplace Plans
It is not clear yet whether plans offered via the Marketplace will be less expensive than current private health insurance plans. In the past several months, states running their portion of the Marketplace have announced, and continue to announce, lower-than-expected rates for health insurance. Experts say both state and regional issues play a part in how much a consumer will pay for insurance beginning in January 2014. For example, in Nevada, plans for young adults to cover catastrophic health situations will sell for less than $100 a month. In Maryland, the insurance commissioner recently said that the expected new rates for residents who will need to buy insurance are around 33% lower than expected. A Connecticut insurer (HealthCT) announced that the cost of its plans would drop an average of 36% from its original proposal in the individual market. HHS announced in August 2013 that the Silver level Marketplace plans are an average 18% lower than anticipated in the 11 states the department studied.
If you have questions about the Marketplace, its plans, or how to get started, you can chat online at healthcare.gov or call 1-800-318-2596, 24 hours a day, 7 days a week. (TTY: 1-855-889-4325).