Health Insurance Exchanges 2013

In five short  months shopping for health insurance will be handled completely differently than it is today.  Beginning January 1, 2014, health plans are required to  sell coverage to all insurance shoppers and the  uninsured, regardless of pre-existing conditions, health or gender.

Beginning Oct. 1, 2013, every state will have an insurance exchange.  An exchange, or marketplace, will be where citizens and small-business owners can shop and  purchase insurance coverage from all of the qualified private health plans available in their state.  Like most shopping of today, consumers will have  the option to shop on their state’s marketplace online.  Consumers also will have the option to shop by phone, through third-party insurance brokers, or with the personal assistance of trained helpers called Navigators.  Non-English speaking consumers will have the necessary help available to assist them in their shopping.

When it comes to affordability, consumers who purchase coverage on their respective state's exchange may in fact qualify for a subsidy depending on their respective household income.  If a consumer’s  household income is between 100 percent and 400 percent of the federal poverty level, they would qualify for this subsidy. The subsidy comes in the form of a tax credit the consumer can utilize immediately  to lower their insurance  premium costs.

Consumers  with household incomes of less than 250 percent of poverty will also be provided with subsidies to reduce their out-of-pocket costs, such as their  deductibles and coinsurance. The respective exchange or marketplace will provide the necessary information to consumers on whether they qualify for a subsidy as well as the amount of the subsidy they qualify for,  when they shop at the marketplace.  

With all of the above guarantees, options and subsidies, we must also note that all individuals must obtain insurance coverage or they will face monetary penalties. Coverage that will satisfy this government mandate include private insurance obtained on your own or through an employer, Medicare, Medicaid,  Veterans Affairs, etc.  The tax penalty for those who do not purchase insurance  starts at $95 per individual, $285 per family, or 1 percent of income, whichever is greater, for 2014.  Those individuals who are exempt from this tax penalty are  those whose  income is too small to file a federal tax return,  Americans living outside of the country, and prisoners. 

Blog post source: Wall Street Journal entitled "Get Ready For Health Insurance Exchanges"

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