In last week’s blog I gave you ACA (Affordable Care Act) in a nutshell. This blog is designed to be part II to las week’s blog. Our intent is to offer you a bit more insight as to how the Marketplaces, created by ACA, are supposed to work.
First of, a Marketplace, or commonly referred to as an Exchange, is a place in the internet where everyone eligible for ACA may go and purchase their health insurance policy.
Before I go any further, let me refresh your memory as to whom is eligible for ACA. Eligibility is very simple, you must be less than 65 years of age, a legal resident of the United States, and not be in prison.
Now there are some exemptions to the law and these are as follows: individuals who are covered under a company’s group policy, a veteran’s health plan, if you have a plan bought by you that meets the criteria of the bronze plan, those who qualify for medicare or medicaid, children on the CHIP program, American Indians, yearly income below $10,000 for individuals, $20,000 for family, if you have to pay more than 8% of your income towards health insurance after employer contributions or tax credits, members of the Military, members of Congress, the President and if your dead. I can assume that if you’re reading this blog, at least you’re not dead.
For the rest of us, to include the self employed, dependent family members, individuals whose employer have decided not to offer an insurance program, and everyone else not mentioned in any of the above categories, we have the Marketplace. Side note, I did not mention the undocumented immigrants, only because they are not included in any of the health programs available to the rest of us.
So what is in the Marketplace? Good question, glad you asked. First let me tell you that there are two types of market places, actually four, there is the Federally run and the State run programs, and within those there is a Marketplace for individuals and their family and then there is the SHOP, which is a Marketplace for businesses with less than 50 employees.
Confused yet? Don’t be! Right now we are just going to speak about the Marketplace for the individual and their family.
I must add that not all states will have a Marketplace online, such as Florida. So, if you are a resident of a State without a Marketplace, you can access the Federally run program.
So, back to the previous answer. A Marketplace is an internet portal where, by putting your pertinent information, you will be able to seek, and maybe find, a premium discount. You will be able to find out if you are eligible for a tax credit, and you will also be able to purchase your health insurance. All Health Insurers who are licensed in your state will appear in the Marketplace.
I know your next question; so how does this work? Well, each Marketplace, whether Federal or State, is connected to the IRS; yup! no more cheating on your taxes; once you put in the information requested you will be crossed referenced with the IRS servers and… Bingo!!! you are told if you are eligible for a premium discount, and if you are eligible for a tax credit.
Now you’re beginning to salivate; premium discounts and a tax credit to boot. Well, not so fast, you may either get one of the two or none. It all has to do with your yearly household income and the number of family members. Again, the Marketplace figures all of that out for you. If you are eligible for a premium discount you have the option of getting it right then and there or later on as tax write off.
So you have now entered all of the tedious information requested from you and you are told that you are eligible for a premium discount, you now go to the next phase, which is choosing which insurance policy best suits your family. You will have a pick from four basic policies, Bronze, Silver, Gold and Platinum.
For the sake of numbers, let’s say that your family premium discount is $300 a month and you choose a program that will cost your family $500 a month; you will have to out-of-pocket the the balance of the monthly premium of $200. Now lets reverse the scenario; let’s say that your premium discount is $300 a month and you choose the bare minimum program, and the premium on that program is $200 a month. Well, now you do not have to out-of-pocket one red cent.
Some families, depending on their income and family structure, may be eligible for a tax credit if they choose to pay for a policy whose premiums are above the allotted premium discount. Once again, the Marketplace will figure it all out for you.
In a nutshell, this is the way that it will play out for most middle class families who do not enjoy the umbrella of a company group plan.
Before a I let you go so I can begin working on with my next blog, there are a couple of points which you should be aware of. First, the only criteria to purchase health insurance after January 1st, 20114, is, age, if you are a smoker, state where you reside and family component. So, if you are not in jail, an undocumented immigrant or dead, you are now able to obtain health insurance regardless of your health condition. Second, don’t fret, it’s not as complicated as it seems, that’s why we’re here to help.
If you have any questions, are still confused, or just don’t want to think about it, send us an email to firstname.lastname@example.org. We will try to answer your questions to the best of our ability, then send you on your way to the insurance program that best fits you and your family.