On Tuesday, the health insurance exchanges that are a cornerstone of President Barack Obama’s Affordable Care Act will open for the first time, and the White House expects 7 million uninsured people to sign up during the six-month enrollment period.
But don’t fret if you have no idea what these exchanges are — you are not alone. In August, 45 percent of people polled by Kaiser said they had heard “nothing at all” about the health insurance marketplaces mandated by the law.
Here’s a guide to the exchanges:
What is the health insurance exchange?
The health insurance exchange, or marketplace, will allow people who don’t have coverage through Medicaid, Medicare or their employer to comparison-shop for the best individual plan in their state on HealthCare.gov. In 34 states, the exchanges are managed entirely or mostly by the federal government; the other 16 states have set up their own exchanges.
About 95 percent of uninsured people will have a choice between at least two insurers offering an average of 53 different plans, according to the White House.
The plans are divided into four categories: bronze, silver, gold and platinum. A bronze plan — the cheapest — covers 60 percent of an individual’s estimated health care costs, while the platinum plan will cover 90 percent of costs. (Some states also offer catastrophic plans that cover even less than 60 percent of costs.)
Starting in 2014, insurers cannot charge customers more based on their pre-existing conditions or their medical history, and all plans must offer a minimum of services, such as maternity care, that some plans did not offer in the past.
Do I have to buy health insurance on the exchange?
If you’re uninsured, you have to purchase health insurance or face a fine of $95 or 1 percent of your income, whichever is larger, on your 2014 tax return. (That fee will go up to 2.5 percent of income in 2016.) Consumers making up to four times the federal poverty level will qualify for tax breaks when they purchase the insurance, to offset the cost. If purchasing insurance would cost more than 8 percent of your income, including the tax break, you’re exempt from the fee.
How much will it cost?
The costs for insurance will vary widely by state, and even by county. The White House estimates that the average monthly premium for a low-cost silver plan will be $328 a month for an individual, before tax credits are applied. A family of four with an income of $50,000 before taxes could pay as little as $205 a month for insurance in Alaska, after the tax credit is applied, and as much as $282 in North Carolina and several other states. (Before the tax credit is applied, the price for the family varies from $584 per month in Arizona to $1,237 in Wyoming.)
With tax credits and including the Medicaid expansion, nearly six out of 10 uninsured people will have access to a health plan that costs under $100 per month for next year. You can peruse the White House’s premium cost estimates by state on its site, but be aware the figures cited are averages for the entire state and might be different based on which county you live in.
How do people enroll?
In order to process millions of applications, the Obama administration built a website called HealthCare.gov where applicants can comparison-shop for insurance offered in their state.
Users log in and create an account and are then asked a series of questions about their income, family size, employer name and contact information. The site connects to other federal agencies’ databases to verify the information provided, and it then informs the user if he qualifies for Medicaid or the Children’s Health Insurance Program. If not, the user is then directed to the marketplace, where he can compare different plans and see exactly what tax break he qualifies for and how much the insurance would cost per month. If you decide to purchase the insurance, you’re led to the website of the insurer to finish the transaction.
There’s also a 24-hour hot line people can call if they have any questions while navigating the application process, which can assist them in 150 languages. The Obama administration also doled out millions of dollars in grants to train “navigators” who work in community health centers and other locations to enroll people in person.
Uninsured people will have six months to enroll starting Oct. 1, but must enroll before Dec. 15 if they want the insurance plan to kick in on Jan. 1.
Can the insurance prices change?
The insurance price quoted on the health care site is locked in for 2014 and can’t change. Next year, the insurer could change the price, but consumers also will have the option to shop around again and switch plans.
Will the enrollment website work?
The Wall Street Journal reported last week that the computer system was not accurately calculating the costs of the insurance plans. But David Simas, White House deputy senior adviser for communications and strategy, says these bugs are being ironed out and that the exchanges will be ready to go on Oct. 1.