The news is everywhere about the insurance exchanges! With all the hype, what should you know? And should you care?
With over 10 million people expected to be eligible for the exchanges, there’s actually a good chance that you should care… The exchanges will be online marketplace where individuals or employees of small businesses can go to compare and buy health insurance. Enrollment starts October 2013 and the plans go live January 2014.
And you’ll most likely benefit the most from them if…
1. You’re uninsured
If you’re shopping for insurance on a federal or state exchange, you can’t be denied health insurance because of your medical history. The plans are guaranteed issue for anyone (as long as you’re a US citizen or legal US resident). You’ll also be protected from the plan suddenly canceling the plan on you if they discover anything about your health history later on.
2. You’re currently paying a ton for your health care
If you’re insured but sinking half your paycheck into your health insurance, the good news is that pricing rules on the exchanges will keep premiums in check. There are only a few ways premiums will be allowed to vary:
- Overall: the most expensive plan can only be 4.5 times the cost of the least pricey plan
- By age: the price for older members can only be three times that of younger members
- By geography
- By family size
Sliding scale subsidies will also be available depending on your income. And they’re pretty generous: You’ll qualify if your income is up to four times the poverty line (about $45,000 for an individual). And the average annual subsidy is expected to be $4,600 in 2014.
3. You’re older but not old enough for Medicare
Both guaranteed issue and the premium pricing rules work out really well for you if you are older but haven’t quite reached 65. This is typically the most difficult age group to be in for finding affordable insurance. Health plans on the exchanges will have to sell you coverage and it can only be three times the price for younger members (today, that ratio is much more extreme).
4. You have really high medical costs
Starting in 2014, annual and lifetime limits on coverage will no longer be allowed by any health plan. Right now, it’s easy to reach one of these limits if you have ongoing health issues, which leaves you without coverage exactly when you need it. But plans will soon be banned from setting any of these limits.
5. You get confused comparing health plans
All plans sold on the exchanges will be standardized, with the goal of making them easy to compare. There will be four tiers of plans, with Bronze plans being the most basic, and Platinum the most comprehensive (and Silver and Gold in between). And all plans will have to cover a list of Essential Health Benefits so there should be no big surprises about what’s covered and what’s not.