Same Old Health Care Reform

As I write this article, it occurs to me that I have talked a lot about health care reform recently. Then I decided there is a good reason for that. That is what most people want to talk about right now, and mostly they have questions. Following is some of the more common questions that I get on a daily basis.

What is the health insurance marketplace, also known as the health insurance exchange? Simply stated they are mechanisms set up for consumers to shop for health insurance coverage. One of the main reasons for their creation was to have a place for consumers to determine if they are eligible for a subsidy to help pay for their insurance premium.

What is a subsidy? It is an amount of money based on the income of the applicant that they can used to help pay for their insurance premium. The only way to get a subsidy is to buy health insurance through an exchange and then only if you qualify due to your income level.

When can I sign up for health insurance? Before the creation of the government exchanges, you could buy health insurance anytime you desired. Now you will only be able to buy coverage during open enrollment or when a life event takes place. A life event is marriage or divorce, birth or adoption, or an involuntary loss of coverage. Open enrollment this year is from Oct 1, 2013 to March 31 2014. Next year and thereafter it will be from Oct. 15th to Dec 7th.

Do I have to buy health insurance? If you currently do not have coverage, you will be required to buy insurance or pay a penalty (being called a tax). The first year the penalty is 1% of your annual income or $95.00 for each person and $47.00 per child whichever is greater. The penalty increases substantially the second and third year and then will be indexed for inflation thereafter.

Can I only buy insurance through an exchange set up by the government? No, you can buy insurance through the private market or through the exchange. Either way, you can buy coverage with or without a broker.

Although with the additional complexities, buying without help is going to more difficult in the future. In fact, the rates for the same plan in or off the exchange have to, by law, be exactly the same. After Jan1, 2014, the rate is the rate.

The only reason to buy on the exchange is if you are eligible for a subsidy, which you can only receive inside the exchange. Otherwise the rate for a plan off the exchange will be the same.

Can I be declined coverage? No, after Jan 1, 2014 you cannot be turned down for health reasons. And they cannot impose any waiting periods for pre existing conditions. However, this is going to cause rates to increase unless enough healthy individuals who have not bought coverage in the past get in the system to help offset the claims of those who will be higher users of the insurance.

This information is being provided by Mark E. VonMoss, Mgr. Financial Div. of The Insurancenter.