What is a health insurance exchange?
A health insurance exchange is a Marketplace. In fact, the federal government is increasingly using the term “Marketplace” rather than “exchange.” We’ll use these words interchangeably, so you can become familiar with each. A key feature of the Affordable Care Act is the requirement that all people be covered by an insurance plan – either provided by an employer, the government, or purchased individually.
Who will be affected?
Most Wisconsin residents won’t purchase insurance through the health exchange. They’ll continue to get their insurance from a private plan provided by their employer; or from a government program such as Medicare or Medicaid.
When does it happen?
As of October 1, 2013, Wisconsin residents have the opportunity to buy health insurance from companies that have been approved to compete in this new marketplace. The plans cover individuals and employees of small businesses and became effective January 1, 2014.
How does the health exchange work?
It is similar to buying a plane ticket or reserving a hotel room online. You enter basic information about your income and family size and are able to select a plan, offered by a participating insurance company, that seems best for you and your family. Individuals and families whose income falls within certain limits qualify for help paying for health insurance premiums and out-of-pocket costs. Also, the exchange directs lower-income people to Medicaid, the government health insurance program for low-income individuals and families.
Is this just an online marketplace?
No. People who are unable to enroll online are able to get help, or can use paper enrollment forms.
Must I buy health insurance on the exchange?
No. You can continue to purchase individual health insurance. But each of the health plans offered on the Exchange include an essential set of benefits that provide comprehensive health care services with different levels of cost sharing. Also, any health insurance plan sold on the Exchange must be a Qualified Health Plan (QHP), certified by the federal government to sell in this marketplace. Think of it as another level of consumer protection.
What if I work for small company that participates in the exchange?
If you’re an employee of a small business that elects to purchase insurance through what will be called a SHOP exchange (Small Business Health Options Program), your employer will pay a set fee to the federal government and your cost will be the difference.
What is the exchange be like?
There are four types of plans based on the level of benefits – bronze, silver, gold and platinum. Bronze is the least expensive, platinum the most costly. It’s worth noting that no matter which plan you select, there is a list of “essential benefits,” developed by the Obama administration and states. Those include hospital, emergency, pediatric, drug, lab services and other care.
Insurance companies are now required to provide at no additional cost some preventive care such as screenings and vaccinations. There are no longer lifetime limits on health coverage. And it is illegal to exclude someone from coverage because of a preexisting condition such as asthma or diabetes.
How much will insurance cost?
Rates on the Marketplace vary based on family size, geography, age and tobacco use.
How does this make health insurance more affordable?
Most middle- and low-income people who purchase health insurance on the exchange are eligible for government tax credits to help pay their insurance premiums. These credits are based on income and family size. Anyone who earns less than 400 percent of the federal poverty level gets tax credit if they purchase insurance on the health exchange. The level of tax credit depends on income and family size. On this website, you’ll find a chart you can use to calculate how much assistance you can expect to receive. It’s important to note that the tax credit will be used to lower your monthly premium, so you won’t receive a check from the government.
Is anyone exempt from the individual mandate?
Yes. Members of religious groups with a recognized exemption from paying federal income tax, American Indians, people who are in the country illegally, and people who are incarcerated are excluded from the individual mandate.
What if I choose not to buy insurance?
If you’re not exempt and you don’t have employer or government-provided insurance you will be charged a fine with your income taxes in April 2014. Below are the projected fines for 2015 and 2016:
- In 2015, the penalty will be the larger of 2 percent of taxable income, or $325 for every adult and $162.50 for every child.
- 2016 and beyond, the penalty is $695 per adults and $347.50 per child (up to $2,085 for a family), or 2.5 percent of family income, whichever is greater.