5 Health Insurance Exchange Facts We all Should know
With days left before the individual health insurance exchange opens its doors, we have been flooded with information, opposing views, and tons of politics. For three years since the Affordable Care Act was approved we have been flooded by information, some of it political, some of it inaccurate, here are 5 Health Insurance Exchange facts we all should know heading into October . While the Health Insurance Exchanges will primarily effect individuals purchasing individual health insurance, everyone has a view or an opinion on the matter.
Fact 1) Health Insurance Exchange will have little impact on most individuals.
The Health Insurance Exchanges are established to help individuals without health insurance purchase an affordable plan. Individuals who are currently employed and received a health plan from work, Medicare, Medicaid, or part of any sort of government health program will not be required to purchase insurance on the Health Insurance Marketplace.
Fact 2) Not Everyone will Pay a Fine for Not Having Insurance:
The individual mandate requires the purchase of a suitable health plans or individuals risk paying a shared responsibility fees. This statement is often touted as one of the biggest reason individuals dislikes this law. This statement is a partial truth; there are many exceptions to this requirement. There are exceptions if you are an individual who cannot afford coverage, if you are and individual taxpayer with income below the tax-filing threshold, Individuals who qualify for a hardship exemption. (This exemption is available to individuals who are not eligible for Medicaid because their state chose not to participate in Medicaid expansion.) If you are an individuals who has experienced a gap in minimum essential coverage of less than 3 consecutive months within one calendar year, if you are a member of religious group that object to coverage on religious principles, or a members of non-profit religious organizations where members share medical costs. Often referred as health care sharing ministries, prison inmates, non U.S. citizens, and Native American tribe members.
Fact 3) Many People Will Get Discounts:
Few individuals will pay full prices on the Health Insurance Exchange. Individual who fall within 133%-400% Federal Poverty Level (FPL) will be eligible for subsidies. (Use our subsidy Calculator Tool). The subsidies will be available to any individual whose income which is less than 400% of the FPL this measures out $46,000 a year for an individual and $94,000 a year for a family of four. Statistically most Americans make less than that. The subsidies vary based on income. The less you make the more assistance you will be able to receive. Individuals that fall below the 133% of the FPL will be eligible for Medicaid, if your state has accepted the Medicaid Expansion mandate of the Patient Protection and Affordable Care Act.
Fact 4) Some Will Pay More, Some Will Pay Less
Based on simple econmics, some older and sicker individuals will tend to pay less, including older smokers based on a technical glitch. This is in part to an increased risked pool, guaranteed coverage, and limit of pre-existing condition to premium rate. The PPACA limits the ability of insurers to charge individuals with a pre-existing condition a higher premium. Individuals within 133-400% of the FPL will be eligible for subsidies. These groups will experience what economist Uwe Reinhardt has named a “premium joy.”
Younger, healthier, and generally male—will most likely pay a higher premiums in the new system compared to the standards that are in placed today. Higher incomes individuals will pay more as they will not be eligible for subsidies, and the shared individual mandate fine is either 1% of $95 which ever is greater. Individuals who make more than a certain amount will most likely pay the 1% fee. (Note: Individuals who are employed and have a qualifying health plan will not be impacted.)
Fact 5) Previous Health Plans Are Not Comparable To New Plans under PPACA/OBamacare
There is a lot of feedback regarding how much health plans are going to cost and how health insurance plans will be significantly more expensive compared to plans in the past. This is often a misleading point. All health plans that are part of the Patient Protection and Affordable Care Act will be required to provide a minimum set of services known as essential health benefits. These essential health benefits now require Health Insurance Plans to provide a mandatory list of services. This list of services provide extensive new benefits including habilitative services, child visions, and child dental. All insurance policies will be required to provide these services within the following categories in order to be certified and offered on the Health Insurance exchange, these services will begin January 1, 2014.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
As we learn more, and as the exchange opens there will be more health insurance exchange facts released, but as one of our readers have said. “This law is complicated and extensive and its always a good thing to do your own research and understand how the PPACA will effect you and your family.”