Throughout the 2016 political campaign, one of the buzzwords repeated over and over again was “Obamacare,” known more formally as the Patient Protection and Affordable Care Act. Passed into law in 2010, the Affordable Care Act officially ushered in a new way for millions of Americans to purchase and obtain health insurance outside of traditional channels.
The health insurance marketplaces were established in 2014, which allowed individuals and families to subscribe to health insurance through a state-run or federal-run market. Through these, individuals were allowed to collect multiple quotes on health and dental insurance, allowing them to choose a plan that is right for them. Today, over 20 million people get their health insurance through Obamacare, including those who are employed full-time, those who are professional freelancers, and those who are living below the poverty level.
For individuals and families subscribing to Obamacare for the first time, navigating the state-run or federal marketplace can be a challenge. How do people determine which plan is right for them? More importantly, how do individuals know if they are qualified for a subsidy to reduce the cost of their health care?
Although it may seem like an ordeal at first, signing up for health care through the Affordable Care Act can be a very easy process. For those who are just starting, here are some tips to get started on signing up for health insurance through the Obamacare marketplaces.
What is the health insurance exchange?
Under the Affordable Care Act, the health insurance exchange is where every individual and family signs up for health insurance. However, the process of purchasing through an exchange varies by state to state.
According to the Kaiser Family Foundation, 28 states utilize the federal health exchange marketplace, located online at www.healthcare.gov. Six states use a state-partnership marketplace, where the state administers plan management and can help individuals sign up for care, but manages enrollment through the federal exchange. Five states run their operations through a state-based marketplace on the federal platform, where the state manages everything, but facilitates enrollments through the federal exchange. Only 12 states have their own true state-based marketplace, where the state administers both the health insurance plans, as well as the enrollment process.
These states include California, Colorado, New York, and Washington.
For those who are not sure where to start, or are enrolling for the first time, the best place to start is on the federal health insurance exchange website at www.healthcare.gov. From there, the website will direct users to the right resource for health insurance enrollment.
When can I sign up for Obamacare?
Much like a traditional health insurance plan, Obamacare has a defined open enrollment period, during which individuals and families can sign up for their health insurance. However, as with many things in life, there are always ways to get around the open enrollment period.
Traditionally, the open enrollment period opens every year on or around Nov. 1, and ends on or around Dec. 15. During this 45-day window, individuals can shop through plans, and sign up for one that aligns with their budget and needs. On many plans, the first premium must be paid prior to the insurance becoming active on Jan. 1.
While the open enrollment period is the only time where anyone can sign up freely, there are some exceptions to the rule. Those who have signed up for insurance through an Obamacare exchange have until Jan. 15 to make changes to their health insurance plans. After that date, those plans are set unless the individual meets a qualifying circumstance for a special enrollment period. These circumstances can include the loss of a job where health insurance was offered, or a qualifying life event, including the birth of a dependent child, or moving to another state.
How many plans are available through the marketplace?
The exact number of plans available in the marketplace varies between states. While insurance companies are welcome to participate in each exchange, not every insurance company will offer every plan to consumers through the state or federal marketplace.
Plans that are available through each insurance marketplace are organized in five categories: “Catastrophic Only” plans, “Bronze” plans, “Silver” plans, “Gold” plans, and “Platinum” plans. As the names suggest, the plans are ranked from the lowest amount of coverage possible, to the highest amount of coverage available.
Catastrophic only plans are the baseline coverage, and are targeted towards younger persons who do not go to the doctor often and do not require prescription medication. Under these plans, routine doctor’s visits and medicines are not covered, but emergency care is covered. These plans come with the lowest monthly premiums, and do not qualify for a subsidy.
The next step up is the Bronze plan, which begins to cover some of the basic needs of the individual, including doctor’s visits and some medications. Because these plans come with a lower premiums, the amount of coverage is not as high, and often relies on co-insurance and out-of-pocket maximums before the insurance begins to offer coverage.
The Silver tier is the lowest tier where subsidies are available, and one of the most common tiers for health insurance coverage. Silver level plans often cover doctor’s visits and prescription medications with a co-payment, but have high out-of-pocket maximums for other items, including emergency care and hospitalizations. While the Silver level plan will offer adequate coverage for many Americans, individuals should read the fine print on what is covered, and what is skipped.
At the highest level are the Gold and Platinum insurance plans. These plans offer the most coverage without minimums to meet, but also come with the highest monthly premiums as well. While the subsidy can apply to these plans, the subsidy does not increase to meet the higher costs of the monthly premiums.
How do I know if I qualify for a subsidy?
Through Obamacare, individuals and families who meet certain need-based criteria may qualify for subsidies when enrolling directly through the appropriate health insurance exchange. Some estimates suggest 85 percent of Americans who sign up for Obamacare qualify for some form of assistance. However, the actual amount of assistance available varies based on multiple factors, including where one lives, their median income, and how many family members are covered in the household.
During the enrollment process, individuals will be asked several questions about their health care needs, including how many people are covered in the household, in what county and state they live, and their estimated adjusted gross income for the coming year. For those who don’t know their modified adjusted gross income, using the previous year’s estimate may work just as well, and can be found on Line 37 of IRS Form 1040.
With the data, the marketplace can determine if individuals qualify, and how much they may qualify for. If an individual or family qualifies for a subsidy, they will have two options for their enrollment. They can either use the subsidy as a direct payment to their insurance company to lower the monthly premium, or take it as a tax credit at the end of the year.
There are two important things to remember about Obamacare subsidies. First, the subsidy only applies to ”Silver” or higher level plans, meaning lower-tier “Bronze” and “Catastrophic” plans will not qualify. Second, because the subsidy is based on an estimate of future income, there is no guarantee it will be available at the end of the year. That is, those who opt for the subsidy upfront may be forced to pay it back if their income exceeds their estimate. Those who are concerned about their income increasing may want to pay full price for their health insurance, and opt for the tax credit at the end of the year.
Which plan is right for me?
When it comes to health insurance, every individual has different needs. While some will only require catastrophic care to meet their obligation, others will require much more coverage for pre-existing conditions, medications, and other well being needs.
Before settling on an insurance plan, be sure to consider all of the factors that play into your personal situation. This includes any medications you may need now and into the future, the doctors (and specialists) you may need to see, and any additional care items that may be covered under your insurance plan.
With these factors in mind, consider insurance plans that have not only an affordable monthly premium, but also offer the best overall coverage for your needs. By combing through the fine print, everyone can make the best decisions for your overall health care needs.
Can I get help in signing up for health insurance?
If deciding online is too overwhelming, individuals and families can seek assistance from an Obamacare enrollment counselor. Counselors are available in every state, and can be accessed either by appointment, or through a walk-up appointment in some cases.
A counselor will ask many of the questions that are offered on the website, and go over all of the available options for health care. For those who find using the online health insurance exchange difficult, working through with an enrollment counselor can be an efficient and easy way to get health insurance coverage today.
Will the Affordable Care Act change under the Trump Presidency?
During the political campaign, one of the recurring themes revolved around “repealing and replacing” the Affordable Care Act. While that is an easy thing for politicians to say, enacting a plan is a little more difficult to achieve.
The Affordable Care Act was an act of Congress passed by both the House of Representatives and the Senate in 2010, which was subsequently signed into law. In order to “repeal and replace” the Affordable Care Act, both chambers of Congress would have to once again work together to pass legislation. Considering it took two years to write and pass the Affordable Care Act, creating a plan to “repeal and replace” could take quite a while.
Furthermore, Obamacare may not necessarily be repealed by an executive order, either. In 2014, the Supreme Court of the United States ruled in the King v. Burwell case that the Affordable Care Act was constitutional, and the provisions that allowed for subsidies and penalties could be enforced. Therefore, there are no immediate changes expected in how Americans purchase or obtain health insurance through Obamacare, but if both houses of Congress act to pass a law to “repeal and replace” the Affordable Care Act, changes could come before the final provisions of the law are enacted in 2020.
While navigating the Affordable Care Act can be confusing and intimidating, knowledge can help even the most confused individual work through with ease. By understanding all of the available coverage through Obamacare, individuals can make sure they get the coverage they need at a price that they can afford.