We have had two decade of health insurance experience and the health reform changes still require a great deal of study to understand. We can imagine how it must feel for the average American who is trying to see how it applies to them. There’s a host of new terms with critical impact on how much you will pay for health insurance. One of these is Health Exchange. Let’s understand what exactly the Health Exchange is and how it affects your options for a health subsidy.
First, what is the Health Exchange?
The Health Exchange is a marketplace to buy specific health plans starting Jan 1st, 2014. These are referred to as Exchange Plans and they are also called the Metallic health plans. There will be a Bronze, Silver, Gold, and Platinum with a Catastrophic option for younger people. There will also be other plans outside of the Exchange and we’ll discuss how these might be different. You will be able to quote both Exchange plans and non-Exchange plans through our Health Subsidy Quote page once they’re available (Oct 1st, 2013). This ideal since the Exchange will only be able to quote plans inside it which may or may not be the best value for you. What will dictate this?
Subsidies will form the dividing line for Exchange Plans
If you make less than 400% of poverty (the 400% Rule), it will be hard to beat the eligible Exchange plans since you will likely qualify for a health subsidy which is after all, the whole point of this entire website. It’s potentially a lot of money at state…$ 1000’s of dollars per year for most people. Your Quoting page will automatically determine if you qualify for a health subsidy and towards which plan at no cost to you. Only the qualified Exchange plans (should be the Silver health plan) will be eligible for a subsidy so that will narrow your decision making down considerably since the the total premium will probably be subsidized by 50-80% depending on your income level. This will supersede any other plans/rate differences that might occur in most situations. What if you don’t make under 400% of the Federal Poverty Level? Do the Exchange Plans still make sense?
Differences between Exchange and Non-Exchange plans
The first consideration will be whether you have a Grandfathered plan. We’ve discussed this consideration in depth at our Grandfathered plan versus Exchange plan page. It’s important to understand how that works. If you have a non-Grandfathered health plan, there may be advantages to non-Exchange health plans. We’re starting to see a blueprint for non-Exchange health plans with much larger doctor/hospital networks than Exchange plans. The core benefits for non-Exchange plans have to match the Exchange plans but the in-network doctor networks may be half the size of current networks inside the Exchange. This could be a big deal. The costs will likely be the same but if you want the better doctors/hospitals, non-Exchange plans might be the way to go. Again, you’ll be able to quote both Exchange health plans and Non-Exchange health plans through our Health Plan Quote page when they’re available October 1st, 2013.
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