Beginning Jan. 1, 2014, everyone in the U.S. will be required to have some type of medical coverage as part of the Affordable Health Care Act, otherwise known as Obamacare. Coverage can be in the form of Medicare, Medicaid or a typical health insurance policy.
Consumers can purchase coverage through the Health Insurance Marketplace beginning Oct. 1, 2013.
The Marketplace is the backbone of Obamacare, designed to provide four levels of coverage at levels the federal government deems as affordable.
As part of the Act, individuals buying insurance through the Marketplace may be eligible for federal subsidies to help them pay for coverage.
Federal dollars are allotted based on income.
Who Should Enroll?
Open enrollment through the Health Insurance Marketplace runs from Oct. 1, 2013 to March 31, 2014. Patients who don’t qualify for Medicaid, Medicare and CHIP, or who don’t have an employer-based insurance plan, qualify for enrollment.
Individuals who haven’t enrolled in a plan by Jan. 1, 2014 or have received an exemption, will be assessed a fee when they file their income tax return.
Employees who have insurance through the workplace can’t use the Marketplace unless the cost of their insurance exceeds 9.5 percent of their income, or if the plan doesn’t offer the minimum services mandated by Obamacare.
Individuals can choose not to buy insurance and pay the Individual Mandate Tax (IMT) instead.
In 2014, the IMT is $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015. In 2016, the penalty will be $695 per adult and $347.50 per child or 2.5 percent of the total income.
Fines are based on a cost-of-living formula after 2016.
Preparation And Documentation
To create an account and sign up, consumers will need to provide some basic information including:
- Social Security number or document number for legal immigrants;
- Employer and income information for each household member;
- Policy numbers for any current plan(s) covering household members;
- A completed Employer Coverage Tool, available on the site, that lists all job-based plans for which household members are eligible.
Plans And Options
Patients can purchase four types of policies through the Marketplace – Bronze, Silver, Gold and Platinum. The plans pay 60 percent, 70 percent, 80 percent and 90 percent, respectively, of healthcare costs.
Bronze and Silver plan costs are capped at 9.5 percent of income. Gold and Platinum plans are capped at 12 percent of income. High-end plans may be subject to an excise tax of 40 percent of the total cost.
Visitors to the Marketplace can compare policies, deductibles, co-pays and costs. The online calculator allows consumers to find the plan that best fits their needs. They’ll be able to determine if they qualify for a federal subsidy to help them pay for Marketplace insurance and how to apply.
The Marketplace also offers “catastrophic” plans for people age 30 and low-income consumers, but different terms and rules apply and individuals won’t be eligible for subsidies and credits.
Affordable Versus Cheaper
It’s important to remember that affordable doesn’t necessarily mean cheaper. There are no restrictions on how much insurance carriers can charge for coverage and other options may be more cost effective.
Families with incomes less than 15,302 will qualify for Medicaid.
Some may qualify for assistance with out-of-pocket expenses for government programs including Medicaid, Medicare and the Children’s Health Insurance Plan.
Obamacare dictates that each person must have insurance and the Health Insurance Marketplace offers plans to accommodate the law. Patients should evaluate each plan carefully and examine all their available options so they can make an informed decision that’s best for everyone in the family.
