Q&A: Inner workings of insurance markets
Health insurance exchanges will change the way people buy coverage and will help millions of uninsured people get a private plan. Some questions and answers on how the exchanges will work:
Q: What's a health insurance exchange?
A: “Exchange” is just another word for “marketplace.” The plans sold in the new markets will start covering patients on Jan. 1, 2014. Each state will have its own exchange serving people who buy their health insurance directly, as well as a separate one for small businesses. The vast of majority of people now covered by employer plans will not see a change.
There will be three types of exchanges at the beginning: those run by states, those run by the federal government, and partnerships. Most Republican governors opposed to “Obamacare” are letting Washington run the exchanges in their states.
For consumers, the benefits should be the same no matter who runs the exchange.
Q: How will exchanges work?
A: Exchanges are supposed to have the feel of an online travel site — think Orbitz or Expedia.
Middle-class people will be able to pick from a range of private insurance plans, and most people will be eligible for help from the government to pay their premiums.
Low-income people will be steered to safety-net programs for which they might qualify. This could be a problem in states that choose not to expand their Medicaid programs under a separate part of the health care law. In that case, many low-income residents in those states would remain uninsured.
Q: How will I know if I can get help with my health insurance premiums?
A: You'll disclose your income to the exchange at the time you apply for coverage and they'll let you know. Only legal residents of the United States can get financial assistance.
The health care law offers sliding-scale subsidies based on income for individuals and families making up to four times the federal poverty level, about $44,700 for singles, $92,200 for a family of four.
But do yourself a favor and read the fine print because the government's help gets skimpier as household income increases.
Final note: Though it's called a “tax credit” the government assistance goes directly to the insurer. You won't see a check.
Q: What will the benefits look like?
A: The coverage will be more comprehensive than what's now typically available in the individual health insurance market, dominated by bare-bones plans. It will be more like what an established, successful small business offers its employees. Premiums are likely to be higher for some people, but government assistance should mostly compensate for that.
All plans in the exchange will have to cover a standard set of “essential health benefits,” including hospitalization, doctor visits, prescriptions, emergency room treatment, maternal and newborn care, and prevention. Insurers cannot turn away the sick or charge them more.
Because the benefits will be similar, the biggest difference among plans will be something called “actuarial value.” A new term for consumers, it's the share of expected health care costs that the plan will cover.
There will be four levels of coverage, from “bronze,” which will cover 60 percent of expected costs, to “platinum,” which will cover 90 percent. “Silver” and “gold” are in between. Bronze plans will charge the lowest premiums, but they'll have the highest annual deductibles. Platinum plans will have the highest premiums and the lowest out-of-pocket cost sharing.
Here's a wrinkle: The government's subsidy will be tied to the premium for the second-lowest-cost plan at the silver coverage level that's available in your area. You could take it and buy a lower-cost bronze plan, saving money on premiums. But you'd have to be prepared for the higher annual deductible and copayments.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Amazon.com distribution center planned for Pittsburgh’s West End
- Watchdog says EPA failing to stop natural-gas pipeline leaks
- Citizens Bank parent says 6-month profit doubles
- Smartphone coupons just one way stores increasing spontaneous buys
- Wesco posts higher profit, lowers full year outlook
- EQT posts $110.9 million profit in latest quarter
- Dunkin’ pushes cashiers to ‘upsell’
- Durbin warns Walgreen against move
- Findlay solar parts manufacturer owed additional $27M, judge decides
- 3 ways to dig up dirt on people
- Income inequality narrower under Obama, analysis concludes