What You Need To Know About The New Insurance Exchanges

health exchangeSo far, the biggest question clients have had about the new health insurance exchanges is how to get through on the glitchy computer system.

Unfortunately, we can’t help you with that!

But once things settle down, here are the key things you’ll need to know:

Who should shop for insurance on the exchanges?

You should definitely visit the exchanges to shop for health insurance if you do not currently have insurance – either because you are uninsurable or you haven’t been able to afford it.

If you have insurance, either through an employer, or a policy you pay for yourself, you will still want to visit the site to see if what’s available is better or cheaper than what you already have. Plus, you may be eligible to receive a subsidy, which will cut your health costs.

What should I be looking for?  

First, look at the premiums for the different levels of policies (bronze, silver, gold and platinum).

Compare the coverage to what you have now. The coverage available on the new policies may be broader and cover previously excluded services.

Compare the co-pays and the deductibles, and understand that the lower the premiums, the higher the out-of-pocket costs you may have to pay.   Make sure you compare the total costs to you (premiums + out-of-pocket expenses) with any existing policy you may have.

How will premiums compare to what I am paying now?

It depends on several factors, but will not be affected by your general health or pre-existing conditions.

What will affect the price?  Your age, where you live, family size and ages, and tobacco use. Older people may find the exchange policies cost less than what they are paying now, while younger people can possibly anticipate higher premiums.

Want a rough estimate of how much health insurance may cost in 2014 in the marketplace, and whether you might be eligible for subsidies? Visit the Kaiser Family Foundation website to use the health insurance costs and savings calculator. It will give you a rough estimate of costs for insurance. Website sponsors remind you that “you won’t be able to get your exact costs for a specific plan until you fill out a Marketplace application and provide details about your income and household. Then you’ll see all of the plans available to you, compare features and prices side-by-side, choose a plan, and enroll.”

There is a different tool to see plans and sample prices available in your area, although it does not factor in any savings you may qualify for based on your income.

By using both the Kaiser calculator and the plans and prices tool together, you’ll be able to see the plans and full prices available to you, and find out whether you’ll qualify for lower costs, say health insurance experts.

What is the deadline for signing up?

Remember you have until December 15 to sign up for health coverage that will start January 1, 2014.

You still can enroll after that date (the Open Enrollment period runs until March 31, 2014), but your coverage won’t start until after January 1, 2014.

To avoid any late enrollment penalties, you will probably need to enroll by about February 14, 2014 to have your coverage in place by March 31. Otherwise, you may face tax penalties.

After March 31, 2014 you can only enroll in health insurance on the exchange if you have a so-called qualifying life event, like a job loss, birth, or divorce.

I own a small business.  What do I need to know?

The rules are a little different for small business. The health insurance marketplace for small business – or Small Business Health Options Program (SHOP) – is designed for small employers with 50 or fewer full-time equivalent employees. No small employers are required to offer health coverage. However, they my choose to do so, and may be able to obtain subsidies to make the coverage more affordable.

Small businesses won’t be able to customize their coverage until next year. For now, all covered employees will have to enroll in the same plan.

For that reason, some small business health experts are telling their clients who currently have insurance to consider waiting until next year.

On the other hand, small businesses without current coverage might want to take a look and price different policy options.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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