Are you wondering how the Affordable Care Act will change the way you get your health insurance?
Big changes are coming in October 2013. Big changes for a lot of people.
The Affordable Care Act is expected to help increase access to health care. Health insurance Marketplace will be an important part of that.
Most people get health insurance through their employers. But people without this option will now be able to shop for health insurance at Marketplace as an alternative to buying coverage directly from individual health insurers.
Over 5 million are uninsured in California alone. Experts predict that by 2016, more than 25 million people will use Marketplace to buy health insurance.
What are exchanges or Marketplace?
Think of an exchange as an online market. It’s a website where shoppers can research all their options and then buy health insurance. There are different types of exchanges… But today we are focusing on the public exchange, or Marketplace.
How does Marketplace work? How will things change?
The new Marketplace is easy to use, and will be open October 2013, allowing consumers to shop for health plans that will begin on January 1, 2014.
The Affordable Care Act requires every state to offer an exchange to its residents. States have a few options:
- A state can choose to create and run its own exchange.
- If a state decides not to run its own exchange, residents of that state can shop on an exchange that will be run by the federal government.
- Or a state can partner with the federal government. In a partnership model, the state and federal government share responsibility for operating that state’s exchange.
No matter what each state decides to do, a Marketplace will be available to residents in every state.
Public Marketplaces will exist for both individuals, who are buying insurance for themselves, and for small group employers, who can buy insurance to offer to their employees. The small group exchange is called SHOP – short for Small Business Health Options Program.
Why is Marketplace expected to be so popular?
There are a few reasons Marketplaces will become popular:
- The Affordable Care Act no longer allows insurers to deny coverage or charge people more based on their health status or preexisting conditions. So, many people who were unable to buy coverage in the past will now start shopping for a health plan.
- Starting in 2014, individuals are required to buy health insurance or face penalties. This is called the “individual mandate.” Although the penalty for not buying coverage is initially low, it will grow over time. As the penalty goes up, so will participation on exchanges.
- The Affordable Care Act will provide tax credits and subsidies for individuals who qualify, to help make insurance more affordable, when they shop on a public Marketplace.
Many individuals who shop on Marketplace will be new to health insurance. To help make shopping easier, health plans on a Public Marketplace will be labeled:
The Metallic level helps shoppers understand the level of coverage a plan offers – how much they will need to pay and what the plan pays.
We will discuss these levels and more next week for Wellness Wednesday!