Health Insurance Marketplaces

For individuals who are not already covered, or who are not exempted, meeting the individual mandate means shopping for insurance. To make the task easier, the federal government and many states created Health Insurance Marketplaces (also known as Exchanges) – websites that allow comparison of available plans based on price, benefits and services, and quality. By pooling customers, reducing transaction costs, and increasing transparency, Health Insurance Marketplaces create more efficient and competitive markets for individuals and small employers. They will allow individuals to benefit from the pooling of risk, market leverage, and economies of scale that large businesses currently receive.

HealthCare.gov is the federal Marketplace. The site directs users to their resident state’s Marketplace, if one has been set up. If a state has not set up a Marketplace, HealthCare.gov provides the research, comparison and purchasing functions for the state’s residents.

Levels of plans offered on the Marketplaces

The Marketplaces offer four levels of insurance plans: bronze, silver, gold and platinum.The levels are based on the percentage of covered costs that a plan would pay. Insurers don’t have to offer plans in all four levels.

  • Bronze – The insurance plan would pay 60% of covered health care costs. The enrollee, on average, would be responsible for paying 40% of the costs.
    • Unless the individual qualifies for the catastrophic plan, this is the minimal insurance that meets the individual mandate.
    • The cost of bronze-level insurance is used to determine whether insurance is affordable: the cost must not be greater than 8% of family income to be considered affordable.
  • Silver – Insurance would pay 70% of covered health care costs, enrollee would be responsible for 30%.
    • This is also known as the Benchmark Plan that is used in determining an enrollee’s eligibility for insurance subsidies.
  • Gold – Insurance would pay 80% of covered health care costs, enrollee would be responsible for 20%.
  • Platinum – Insurance would pay 90% of covered health care costs, enrollee would be responsible for 10%.

In addition to these four plan levels, catastrophic plans will offer essential health benefits, but with high deductibles. Only young adults under 30 and individuals exempted from the individual mandate because they cannot find affordable insurance are allowed to purchase catastrophic plans and be considered covered under the individual mandate.

Finer points
  • Marketplaces will help eligible individuals get premium assistance credits or coverage through other federal or state health care programs. Marketplaces evaluate and determine eligibility for applicants in Medicaid, the Children’s Health Insurance Program (CHIP), and other health programs.
  • Open enrollment for 2016 starts on November 1, 2015 and ends on January 31, 2016. Enrollment deadlines are:
    • December 15, 2015 to be covered by January 1, 2016
    • January 15, 2016 to be covered by February 1, 2016
    • January 31, 2016 to be covered by March 1, 2016
  • Users can shop on the Marketplace and then actually enroll by mail, if they prefer.
  • Consumers can call 1-800-318-2596 (TTY: 1-855-889-4325) for help with enrollment. The number is staffed 24/7, and information is available in more than 150 languages.
  • “Navigators” – specially trained advisers – are available in many areas to help in person. Navigators and marketplace-designated organizations can educate individuals about plans; they cannot tell the individual which plan to select. Their advice is free. (The Administration advises that if a navigator or federally designated organization tries to charge the individual, it is a scam.)

    Find a navigator – the closest location, contact information, office hours, and more

  • To receive the Premium Tax Credit, health insurance must be purchased through the Marketplace, and household income must be within certain limits.
  • Only insurance purchased through a Marketplace is eligible for subsidy. To meet the individual mandate, a taxpayer can purchase coverage through an insurance broker, but such coverage is not eligible for a premium assistance credit.
  • Insurance agents can help individuals buy health insurance through the Marketplace, and if qualified, the individual can receive the Premium Tax Credit. However, the cost is the same, whether the individual buys insurance through an agent or directly through the Marketplace.
  • To avoid overpaying or underpaying for insurance purchased through a Marketplace, the customer should return to the Marketplace and report certain life events:
    • Getting married or adding a dependent
    • Moving to a new state
    • Losing a job
    • A decrease in income of 20% or more
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