What’s a Health Insurance Exchange? What’s a Health Insurance Marketplace?

In 2010, when the Affordable Care Act (ACA or PPACA) was signed into Law, a provision for health insurance exchanges was included in the language.  The term “exchange” has since been changed to “marketplace”…maybe because it sounds friendlier?  Who knows the logic behind it but just know that the terms “exchange” and “marketplace” are synonymous. 

A Health Insurance Marketplace is a government-regulated, standardized healthcare program intended to provide competitive, affordable health insurance plans to Americans who otherwise do not get insurance through their employers.  Each state, and the District of Columbia, will be required to have an insurance marketplace in place and operational by October 1, 2013 for plan year beginning January 1. 2014. 

But what is it?  How does it affect me?  Well, it MAY or may NOT affect you…depending on your current insurance status and your family income.  As we stated before, the ACA is designed to provide insurance to Americans who do not have health insurance, who can’t afford insurance, or who don’t currently qualify due to a pre-existing condition.   Marketplaces are not only where people will go to choose plans; they’re also where people will go to see if they qualify for help in affording a plan. 

Yep, you may actually qualify for help in offsetting your insurance premiums.  This help will be in the form of a premium tax credit and it hinges on your family’s income.  To determine if you qualify, you must complete an application which includes all family members that will be included in your insurance plan, AND, all income that each of these family members receive.  This total income will then be tallied against the Federal Poverty Level (FPL).  FPL for 1 person is $11,170, except Alaska and Hawaii.  People earning up to four times the federal poverty level would be eligible for some help paying for their insurance premiums.  Tax credits will available based on a sliding scale, depending on how much you earn.

Ok, so you qualify for a tax credit.  The next step is to go into your state’s Insurance Marketplace.  The marketplace is designed to help you, the consumer, find a plan personalized to your specific health conditions, budget, and hopefully preferred network.  The marketplace will provide you with plans based upon your requirements for you to compare.

Remember, BEFORE purchasing an insurance plan through the marketplace, make sure you compare, compare, compare!! Just because you qualify for a tax credit (premium assistance) doesn’t mean that the marketplace plans are right for YOUR needs.  Make sure you compare the marketplace plan with an open market plan to ensure you get the best bang for your buck.  It’s quite alright NOT to purchase through the marketplace even if you do qualify for assistance.  Maybe you find out that an open market plan better meets your needs – co-pay, network, deductable, etc.  Just need make sure you HAVE insurance no later than March 2014 because that’s when open enrollment closes for the year.   And, not to worry if you don’t qualify for a tax credit, you can still purchase your health insurance through the individual/open market on a guaranteed basis (pre-existing conditions covered).

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