Things to know about health insurance on the exchange
(MoneyWatch) A few weeks ago I wrote about a new development during this year's open enrollment for health insurance coverage -- the new health insurance choices folks need to sort through on the new Health Insurance Marketplace.
The new Health Insurance Marketplace, or also known as the health insurance exchange, opened online last week in accordance with the Patient Protection and Affordable Care Act of 2010, or ACA. Thirty six states are expected to participate in the government's health insurance exchange and 14 states have launched their own programs.
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Here's what you need to know as you begin to sort through the health insurance plan options:
Who should consider buying health insurance on the Exchange?
There are two categories of individuals who should seriously consider buying health insurance on the exchange: Those who don't have health insurance now because they are uninsurable and those who have health insurance (either on their own or through an employer) that is really expensive and/or limited in its benefits. If you think this is you, log onto the exchanges, shop and compare the health insurance options that are available there.
How do you compare costs of the insurance on the exchange versus the cost of the health insurance you already have?
The first thing to look at is the premiums of the options on the exchange. (These will vary by your state of residence.) It's important to know that the premiums for the insurance on the exchange is based on where you live, your age, the number of people in your family you are covering and whether you smoke.
The older you are, the higher the premium but it should not be more than three times what younger people will pay. There is also a premium subsidy based on your income -- this applies to folks who have lower incomes. This subsidy (which is free money from the government) is only available when you buy the health insurance on the exchange.
Another important difference between the costs of the health insurance you buy from your employer versus the health insurance you buy from the exchange is that you use pre-tax dollars to pay for the health insurance through your employer and after-tax dollars when you buy the insurance through the exchange.
Comparing the health insurance options, features and benefits
The main thing folks need to understand is that access to and the premiums for the health insurance on the exchanges are not based on health. It does not matter how sick you are or what pre-existing conditions you may have. You cannot be turned down for the health insurance on the exchange. You also need to compare the coverage. The insurance options on the exchange are required to cover things such as preexisting conditions, mental health benefits and pregnancy, while your existing insurance may not. Finally, compare the co-pays and deductibles. The point is that you'll need to prepare a complete side-by-side comparison of the elements of coverage and all of your possible out of pocket costs.
