A centerpiece of the Affordable Care Act launches today with new health insurance exchanges opening in every state. The exchanges are the central element of the law’s attempt to provide affordable coverage for middle-income uninsured Americans. Federal officials say they expect enrollment in new insurance plans through the exchanges will start off slowly, in part due to computer glitches in software and a general lack of awareness among the public. Here are some frequently asked questions about how the exchanges will work, and who could benefit.
What changes today?
New state-based Obamacare insurance marketplaces, called exchanges, are opening for business. Coverage plans sold through the exchanges will comply with new Obamacare regulations that prohibit insurers from discriminating against those with pre-existing health conditions.
The open enrollment period that begins on Oct. 1 will last until March 31. All plans purchased between now and mid-December will begin on Jan. 1, 2014. Those who are eligible to shop in the exchanges won’t be able to buy coverage there after March 31 unless they have a major life event, like a job loss or divorce that affects coverage.
Can I shop in an exchange?
The federal government expects about 7 million to enroll in new insurance plans through the exchanges in the next year and about 22 million people to get coverage there by 2016. You are eligible to buy an insurance plan if you don’t receive insurance coverage through a federal program, like Medicaid or Medicare, and don’t have access to employer-based coverage that costs you less than 9.5 percent of your income.
The exchanges will distribute federal subsidies to those earning up to 400 percent of the federal poverty level, about $46,000 for an individual and $95,000 for a family of four. An individual earning less than $28,000 per year may also be eligible for government assistance to cover deductibles and other out-of-pocket expenses
Does a government shutdown affect the rollout of exchanges?
No, exchanges will still operate even while government is shut down.
How do I access my state exchange and find out if I’m eligible for a subsidy?
Links to every state exchange can be found through healthcare.gov, a web site managed by the federal government. State-based exchanges have various names, from Covered California to New York State of Health to Kynect in Kentucky.
A calculator developed by the Kaiser Family Foundation can give you a rough estimate of how much you would pay for coverage through an exchange.
Are the insurance plans being sold through the exchanges comprehensive coverage?
Every plan for sale through an Obamacare insurance exchange will cover preventive care with no out-of-pocket costs. The plans are also required to cover a package of basic benefits, including hospitalization, chronic disease management and maternity care.
What are the different levels of coverage and premiums available through the exchanges?
Plans sold through the exchanges are categorized in tiers called bronze, silver, gold and platinum. Bronze plans are the cheapest, but may include higher deductibles, co-pays and coinsurance. More expensive plans will cover greater percentages of total health care costs.
Are the plans affordable?
In many cases, insurance plans for sale in the Obamacare exchanges are cheaper than coverage previously for sale on the open market. After subsidies, some of those enrolling in coverage through the exchanges will be able to purchase cover for $0 or less than $100 per month. Although insurers are banned from setting rates based on health status, they are permitted to charged the oldest enrollees in a plan three times as much as the youngest enrollees. Older people will be charged more than young people, although federal subsidies to blunt the cost of coverage are based on income, so older people who are retired will generally receive more generous subsidies from the federal government.
A regulation preventing insurers from setting annual out-of-pocket spending limits has been delayed until 2015.
If I’m uninsured, why should I sign up for coverage through an exchange?
Aside from the benefit of buying protection against unforeseen medical expenses, purchasing Obamacare-approved coverage will meet the law’s individual mandate. Some Americans without coverage will be exempted from the mandate, but in general, adults without coverage in 2014 will pay a $95 fine or 1 percent of family income, whichever is greater. This penalty will go up to $325 or 2 percent of family income in 2015 and $695 or 2.5 percent of family income in 2016.
I earn less than $16,000, which would qualify me for Medicaid under the ACA, but my state is not expanding the program due to political opposition. Can I buy subsidized coverage in my state exchange instead?
It depends. Those earning between 100 and 400 of the federal poverty level ($11,500 to $26,000) can access federal subsidies. But because ACA authors assumed every state would expand Medicaid, the subsidies are not available to those earning less.