Healthcare Exchange and Marketplace insurance coverage is now available at affordable rates. There are no medical questions to answer, pre-existing conditions are covered without waiting periods or exclusions, and generous federal tax subsidies can substantially reduce your rates. Single, family and business-owner plans are offered. As future changes are proposed by the Trump Administration, we keep you informed of all new rates and requirements.
The Affordable Care Act, also known as “Obamacare,” brings lower healthcare prices along with many questions. We’ll try to answer them all below:
Who Is Allowed To Buy An Exchange Policy?
Of course you must be a legal citizen of the United States and not be incarcerated. Just as importantly, you can only apply in the state that you reside. For instance, if you live in New Jersey most of the year and spend the winter in Florida, you must apply for coverage in New Jersey. However, if your permanent residency status changes, you may purchase coverage at any time of the year. Rates can vary greatly from one state to another, so your established state of residency is important. Even if policies can be sold across state lines, prices of coverage are determined by your primary residence zip code.
You also must not be receiving benefits for Medicare or Medicaid to apply for a Marketplace plan. However, if your status changes, you can become eligible to enroll in coverage. For example, if you are single, and your income increases from $15,000 to $22,000, suddenly, you may be eligible for subsidized medical coverage instead of re-enrolling for a Medicaid plan. Conversely, when you reach age 65 and are Medicare-eligible, you can purchase a subsidized policy.
Open Enrollment typically ends in February each year, although exact dates can change. If you miss the deadline, and you have existing coverage, of course, you can keep the plan you have. You can also purchase an alternative policy that is non-compliant, although an IRS tax may apply and many essential benefits may not be included.
A “Special Enrollment Period” may be available all year to anyone, regardless if you are presently covered. To qualify for this “SEP,” there are several accepted situations, including termination from your current plan, reaching age 26, moving to a different state or pregnancy (for the baby).
Do Older Persons Pay Higher Rates?
Yes, they do, but not as much as in the past. Older applicants can not be charged more than three times (300%) more than the youngest persons applying for coverage. So, for example, if the premium on a specific policy for a 25 year-old is $120 per month, $360 is the maximum price for someone in their 60s. This difference compares to a price of about $500-$700 before The Affordable Care Act was passed.
This does not take into account federal subsidies, which can substantially reduce premiums, especially for applicants over the age of 50. When there are dependents in the household, the subsidy increases, even if those children are covered through an outside plan (for example, a university medical plan). The dependents must be listed on the parent’s tax return to earn the extra financial aid. Once they reach age 26, they must purchase coverage through a separate plan.
What Are The Metal Plans And How Do They Differ?
The “Metal” plans are the new classifications of coverage that are used. It simplifies the comparison process, especially when multiple policies are being considered. The four tier choices are Platinum, Gold, Silver and Bronze. The basic difference is the out-of-pocket costs that are expected to be paid. This is also referred to as “cost-sharing.”
For example, the Platinum contract (the most expensive), has copays, coinsurance, and deductibles that are expected to pay 90% of anticipated healthcare costs. The Gold contract is 80% and the Silver plan 70%. The cheapest contract (Bronze) is expected to pay about 60% of the average anticipated medical costs. Thus, it is the least expensive Metal option.
However, often, the “Silver” options provide the best combination of value and benefits. Through cost-sharing, which is unique to Silver-tier plans, you can enroll in a plan that has Gold or Platinum features at a discounted rate. This is because at certain income levels, the deductible and copays reduce by as much as 75%.
During Open Enrollment, you can change from one plan/tier to another without any penalty or medical underwriting. Thus, if during the prior year, you were treated for expensive medical conditions that were no longer a concern, you could conceivably change to an alternative policy with a lower premium and higher deductible. And vice verse of course.
How Will My Pre-Existing Conditions Be Covered?
More great news. Medical conditions do not factor in rate calculations. It does not matter if treatment is planned in the future, or there were health issues in the past. The prices of coverage will solely be based on your age, state of residence, zip code, household income and your tobacco usage.
NOTE: If you need immediate treatment, it’s important to select the plan that will minimize your out-of-pocket expenses for the surgery/procedure you are going to schedule. In some situations, an HMO may be the best option. However, in others, a low-deductible PPO may be a better and more suitable alternative.
Also, if it is cost-effective, you can choose a Gold or Platinum plan to provide benefits the year you have a major surgery. Assuming all treatment has been completed, changing back to a less-expensive Silver or Bronze contract can be considered. This concept only works if the out-of-pocket costs of your medical treatment are significantly lower than the increase in premium from one Metal-tier to another.
Will You Help With The Enrollment Process?
We help simplify the entire process. Of course, we’re aware of the glitches, security issues and delays that were present the first year of the rollout in 2014. Thanks to improved and updated software and servers, the process is not as “clunky” and applications are submitted much faster and easier. Our average submission time is about 12 minutes.
Initially, it’s important that you understand your options, the amount of your subsidy (if you qualify) and which plans best cover the benefits that you are most likely to utilize. Any pre-existing condition should be considered. And you also need a deductible that’s practical and affordable.
Once we have identified the plan you are going to apply for, we walk you through the process so it becomes much easier and quicker than if you were attempting do apply without assistance. And you might also come away from the process with more hair since you won’t be pulling any out! Once finalized, all billing statements come directly from the insurer. Also, we are available at any time to assist you with your policy.
How Do I Tell If I Have A Grandfathered Plan I Can Keep?
If your policy has an effective date of March 23, 2010 (or earlier), and there have been no major changes (such as deductible increases), it should qualify as a grandfathered plan. If the coverage was bought after that date, it does not qualify for a grandfathered plan, and the Department Of Health And Human Services may force the cancellation of the contract.
However, there are exceptions that can be made in accordance with each individual state’s guidelines. Although health insurance Exchange prices may be a lower-cost option, in some instances, a grandfathered policy should be kept. Unless you are notified (by letter in mail), you should be able to retain your existing coverage, even if it does not meet current Affordable Care Act guidelines.
Company-sponsored policies can also be considered for grandfathered status. However, once again, if there were material changes to the coverage, eligibility may be lost. In those situations (private or group), you can change to a new plan issued through your state or federal Exchange Marketplace. Of course, if you have a grandfathered plan, you can also terminate it and apply for a new policy during Open Enrollment. But you will not be able to return back to the original policy.
Are Prescriptions Covered On Most Plans
RX benefits are very good on many available policies. Since it is a mandatory required benefit, often the difference from one plan to another, is the amount of the copay and whether a deductible applies before you can use coverage. One big positive is that if you currently take drugs or medicine, it will be fully covered as a pre-existing condition.
Before determining which plan to apply for, always compare the out-of-pocket costs you must pay before the drug expenses are covered. For example, if a deductible and coinsurance apply, and you need a non-generic prescription covered, another plan that has a slightly-higher premium may actually provide much better RX benefits.
Also, it’s quite important to know the “tier” classification of your drug. For example, a “Preferred Brand” will will be treated differently than a “Preferred Generic.” And specific plans may feature a small copay instead of a high coinsurance for your particular prescription. By knowing this information in advance, it will help you save hundreds (or thousands) of dollars by enrolling in the most suitable policy.
How Do I Get The Tax Credits To Pay Premiums?
These credits (federal subsidies) are automatically applied towards your premium. Thus, you do not have to file your tax return to receive the credit. Your Marketplace plan costs are based on your household income and its relation to the Federal Poverty Level (FPL).
The closer you get to 400% of the FPL, the lower your subsidy becomes. If you reach or exceed 400%, no subsidy is paid and you have to pay the full cost of the policy you purchase. The financial aid you receive is based on your estimated income for the following year. So if you underestimate your wages, you may owe extra money the following year.
Also, if you receive federal aid, the following year, you will have to file IRS tax form 1095-A, which will assist you with form 8962 (Premium Tax Credit). The combination of forms will ensure you are correctly calculating your subsidy.
Is It Possible To Get Free Health Insurance?
Depending on your income, you may not have to pay (at all) for your coverage. If your income is low enough, you’ll qualify for Medicaid, which is free. The Federal Poverty Level (FPL) determines your eligibility. Any household income under 100% of the FPL will qualify. The larger your household, the larger the income allowed for inclusion becomes.
For example, If there are three persons in your household, income under $19,790 will qualify for Medicaid. The four-person limit is $23,850 and the five-person limit is $27,910. If you are the only household member, the maximum income is $11,670.
Some states, however, have raised the Medicaid threshold to 138%, which allows more income to be earned without jeopardizing eligibility. If you are barely ineligible for Medicaid, then your federal subsidy on a Marketplace plan will be quite high, and many “free” options will be available.
However, they will likely be Bronze plans which will feature high deductibles of $5,000-$6,000 (or higher). A Silver-tier plan should be strongly researched since special “cost-sharing” will reduce the deductible.
What Is IRS Form 1095-A?
This form started to be sent to consumers in early 2015 who received tax credits (subsidies) for paying their healthcare premiums. It is needed when filing your federal taxes for the year after you receive subsidies. When purchasing a qualified plan, the premium tax credits you receive in advance must be reconciled with your income so they match. It is possible that you may receive additional money, or have to pay a specific amount because your income was understated.
Also, once your 1095-A form is completed, you will be able to use the information to complete required IRS form 8962 (Premium Tax Credit). If you received any subsidy (regardless how small), the 8962 must be submitted.