What is the Health Insurance marketplace?

One of the critical components of the Affordable Care Act is the Health Insurance Marketplace, also known as the health insurance exchange. It is a new way to find quality health coverage, whether or not you currently have coverage. You can use it to “shop” for other options that may suit you better than your current plan. With one of the Marketplace applications, you can compare coverage options side-by-side, learn if you can get lower costs based on your income and enroll for coverage.

The goals of the Health Insurance Marketplace are to expand insurance coverage to more people, help insurers comply with consumer protection laws and compete in cost-effective ways. The exchange itself is not an insurer, so it does not bear risk but it does determine the companies that are allowed to participate. To date, over 120 insurance companies offer qualified health plans in the Marketplace. Ideally, the marketplace concept promotes insurance accountability and transparency and facilitates increased enrollment and delivery of subsidies. Additionally, it helps spread risk to ensure that the costs associated with expensive medical treatments are shared more broadly across large groups of people rather than spread across just a few beneficiaries. The sharing of risk is the most basic and essential concept of any form of insurance.

Insurance plans in the Marketplace are offered by private companies. They all cover the same essential health benefits and no plan can turn you away for a pre-existing condition or an illness. Treatments for these conditions or illnesses must be covered. Also, women cannot be charged more than men for the same plan. Many preventive services are covered at no cost.

When you use the Health Insurance Marketplace, you’ll provide information about your household size and income to find out if you can get lower costs on your monthly premiums for private insurance plans. You will also learn if you can qualify for lower out-of-pocket costs and see all the health plans available in your area. You can apply online, by mail with a paper application, by phone, or in person with the help of a Navigator or other qualified helper. Community Health Centers in all 50 states have received a total of $150 million in federal grants to help enroll uninsured Americans. Telephone help is available 24/7 at 1-800-318-2596 (TTY: 1-855-889-4325). Online chat is also available. Spanish-speaking consumers can go to CuidadoDeSalud.gov.

While all insurance plans are offered by private companies, the Marketplace is run by either the federal government or individual states, and every state is mandated to use the marketplace. Nearly $4.2 billion in federal grants has been awarded to 49 states, the District of Columbia, and four territories to establish their Marketplaces. Seventeen states (including the District of Columbia) will fully run their own Marketplace. The Department of Health and Human Services (HHS) will fully run a Marketplace in 19 states. In 15 states, HHS will work with the state to run a Marketplace. Kansas is run by the federal government, so our Marketplace is accessed through HealthCare.gov. You can apply and enroll on this website, and if you do not enroll in a plan, you will likely be penalized with a fee of $95 per adult, and $47.50 per child, or 1% of your income, whichever is greater. This fee increases every year. Some people are exempt from this fee, which is outlined on Healthcare.gov. If you enroll by March 31st 2014, you won’t have to pay the fee for any month before your coverage began.

Many people will not need to use the Health Insurance Marketplace. If you have job-based insurance, you are covered by this policy. However, you can consider switching to a Marketplace plan. You cannot qualify for lower costs based on your income unless the job-based insurance is unaffordable, or doesn’t meet minimum requirements. You may also lose the employer contributions your employer makes to your premiums.

If you have Medicare, you are considered covered and don’t have to make any changes. You cannot use the Marketplace to buy a supplemental or dental plan.

In addition to any job-based plan or Medicare, you are considered covered if you have Medicaid, CHIP (Children’s Health Insurance Program), a privately-purchased plan, COBRA, retiree coverage, Tricare, VA health coverage and some other kinds of health insurance.

Small employers will be able to choose from a range of coverage options for their employees through the Small Business Health Options Program or SHOP. Eligible employers may qualify for a tax credit worth up to 50% of the employee’s premium contribution to a SHOP plan. In 2014, SHOPs will have the flexibility to decide whether employers can let their employees choose from a number of plans, or offer their employees one plan chosen by the employer.

Non-profit health insurers, called Consumer Operated and Oriented Plans (CO-OPs), will offer coverage inside and outside the Marketplace. To date, 24 non-profits that plan to offer coverage in 24 states have been awarded nearly $2 billion to set up CO-Ops.

More information is available at healthcare.gov.