Day one of a five-day series
MONDAY, Sept. 23 (HealthDay News) -- A new way of shopping for
health insurance is coming to your state.
Beginning Oct. 1, consumers can use a new health insurance
exchange in their state to apply for health coverage. Depending on
when you enroll, that coverage could kick in as early as Jan. 1,
The exchanges are the centerpiece of the Affordable Care Act,
the Obama administration's landmark health reform law, and are
primarily intended to help uninsured Americans and small businesses
find affordable health insurance.
Each state exchange will act like a shopping mall for health
insurance. Uninsured workers can go to the exchange to buy a health
plan. Individuals and family members can find out if they are
eligible for Medicaid or the Children's Health Insurance
The state exchanges will help mainly two groups: People who earn
too much to qualify for Medicaid but not enough to easily pay for
health insurance on their own, and people living just above the
poverty line -- up to 138 percent of the federal poverty level --
in states that aren't expanding their Medicaid programs.
Each state will also have a "SHOP" -- Small Business Health
Options Program -- exchange. This is where small businesses that
decide to offer group health insurance can select coverage and
where their employees will go to sign up.
But as the new system rolls out and consumers begin to wade
through the new health insurance options, experts say there's bound
to be a steep learning curve.
"It's definitely going to take a while for people to get their heads around this and understand, for me this path makes sense or for me this path does not make sense," said Linda Rowings, chief compliance officer at United Benefit Advisors, an Indianapolis-based provider of employee benefits advisory services.
Here's an easy-to-understand guide to help you get started:
What's a health insurance exchange?
A health insurance exchange is an electronic marketplace where
people can buy health insurance or enroll in public health
Each state and the District of Columbia will have one.
How can the exchange help me find health insurance?
You can use the exchange in your state to compare health plans
and prices, much like you would if you were shopping for a major
appliance, hotel accommodations or airline tickets. Many people who
apply for health insurance will be eligible for federal tax
subsidies to lower their cost of coverage.
Each state will also have an exchange where small businesses can
shop for coverage for their employees. Once an employer signs up to
provide coverage through the Small Business Health Options Program,
employees may use the exchange to enroll in a health plan.
If you or your family members are eligible for free or low-cost
health care through a public health program, you will be connected
with Medicaid or the Children's Health Insurance Program.
Do I need a computer?
Not necessarily. Beginning Oct. 1, the exchanges will operate
toll-free call centers and have trained individuals available in
your community to help you understand your options and enroll in
But if you're computer savvy, you can go online to review your
options and enroll in a health plan. You can also pose simple
questions via an online chat on HealthCare.gov.
Do I have to use the exchange?
No. You may buy health insurance outside the exchange. But you
will only qualify for federal tax subsidies to lower your premium
if you buy coverage through the exchange.
What if I don't want health coverage?
Under the health reform law, most U.S. citizens and legal
residents must have health insurance or pay a fine. Each uninsured
person who doesn't have an exemption from the law will owe a flat
fee or a percentage of income, whichever is greater.
The penalty is $95 per adult, or 1 percent of taxable family
income, whichever is greater, in 2014. That will rise to $325 or 2
percent of taxable income in 2015, and $695 or 2.5 percent of
taxable income in 2016. Beyond 2016, the flat fee will be adjusted
annually for cost of living, although the share of family income
will remain at 2.5 percent. The cost for children is half the adult
The maximum penalty for a family of three or more is $2,085, or
2.5 percent of taxable income.
What if I can't afford health coverage?
Beginning in 2014, consumers with incomes between 100 percent
and 400 percent of the federal poverty level can qualify for tax
credits to reduce the cost of coverage they buy through the
The amount of help will vary by income, family size and the type
of coverage selected. In general, the lower a person's income, the
greater the tax credit.
A family of four earning $47,100 -- or two times the poverty
level -- would not have to pay more than 6.3 percent of their
income, or $247 a month, toward the premium, according to an
analysis by the Center on Budget and Policy Priorities. That's
based on 2013 data.
The law also helps with out-of-pocket expenses, like
deductibles, co-payments and co-insurance. People with incomes
below 250 percent of the poverty level -- or $28,725 for an
individual and $58,875 for a family of four -- may qualify for
cost-sharing assistance from the federal government.
What if I already have health insurance?
If you have a health plan that meets minimum coverage
requirements, say, through your employer, or you are on Medicare or
Medicaid, you comply with the law's so-called individual mandate
that requires most people to carry insurance. You don't need to use
a health exchange.
Where can I find my state exchange?
The exchanges have names like New York State of Health, Covered
California, kynect (in Kentucky) and MNsure (in Minnesota). To find
your exchange, go to the federal government website
Some states, like Florida, are not running their own exchanges,
leaving it up to the federal government to do it for them. Other
states, such as Illinois, are setting up exchanges in partnership
with the federal government. In these states and others that are
not building their own exchanges, you can go to HealthCare.gov to
apply for coverage.
How do I apply for coverage?
You complete an online or paper application. Make sure you have
current income information (such as pay stubs or W-2 forms) and
Social Security numbers for you and members of your household. If
any members of your household have health insurance, you will need
the policy numbers of those plans.
Where can I get help applying for coverage?
The federal government has invested millions of dollars in
grants to train people who can walk you through your health
Depending on where you live, you may be able to get help at your
local health clinic, library, church or other community-based
groups. Contact your health exchange for information on where to
What's the deadline for signing up?
Open enrollment for 2014 begins Oct. 1 and ends March 31,
If you enroll in a private health plan by Dec. 15, 2013, your
coverage will take effect on Jan. 1, 2014. During the remainder of
the open enrollment period, you may enroll in a health plan but the
effective date will be delayed.
After March 31, you may apply for private health insurance
through the exchange only under special circumstances, like a
birth, job loss or divorce. (Open enrollment for 2015 begins Oct.
You may apply for Medicaid or the Children's Health Insurance
Program at any time during the year.
Small employers may offer coverage through the Small Business
Health Options Program at any time during the year.
The U.S. Department of Health and Human Services has launched a
new toll-free consumer hotline to answer your questions about the
exchanges. Call 1-800-318-2596 or (TTY: 1-855-889-4325).
brochurefrom the U.S. Centers for Medicare &
Medicaid Services tells consumers how to get ready for the new
Visit HealthCare.gov to learn more about the new
health insurance marketplaces.
To read a
HealthDaystory on the Affordable Care Act's potential impact
on young adults,
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