What You Need to Know About Health Insurance Exchanges

Experts offer consumers advice about heath insurance marketplaces.

Buying health insurance online? Here are some of the most-frequently asked questions.
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Just over a week remains until consumers will be able to shop for health plans through insurance exchanges, online tools that will give Americans — including millions who are now uninsured — access to expanded coverage and new ways to determine which health plans best fit their needs. In order to prepare consumers for this unprecedented change, U.S. News held a Twitter chat with experts from the Department of Health and Human Services (HHS), the government agency overseeing the implementation of exchanges, and the National Patient Advocate Foundation (NPAF), a nonprofit that helps patients obtain financially suitable health care. Experts discussed the basics of exchanges, how to prepare for enrollment, what costs to factor in, and what benefits to expect. The chat's 300 participants sent 1,142 tweets during the course of the discussion. 

The Basics

Health care exchanges are websites established by the states — or by the federal government in partnership with states — under the Affordable Care Act. Consumers in any state will be able to visit the state's exchange, shop for insurance and determine whether they're eligible for government subsidies. Using these "online hubs," or virtual marketplaces, consumers can compare plans and select coverage that meets their needs, NPAFsaid. "Ever bought an airline ticket through an online comparison source like Kayak or Travelocity?" the nonprofit asked. "Marketplace setup is similar." Consumers can go to HHS's website to access their state exchanges and see what plans are available. Even as the states scramble to get their online exchanges up and running, some commenters proposed improvements. Steven Daviss, a psychiatrist, suggested that exchanges should allow consumers to rate plans and comment on them, much like Amazon or Yelp. "Think doctor directories that patients can thumbs up/down, flag for errors," he wrote.

Open enrollment begins Oct. 1, 2013, and extends until March 31, 2014. Health coverage can start as early as Jan. 1, 2014. Individuals and families who are citizens or legal residents will be able to use the marketplaces, as will small businesses. "Did you know? Those with student visas may be eligible for marketplace plans," NPAF noted. Medicare recipients will not need to use the exchanges.

How should consumers prepare for enrolling in exchanges?

People signing up for health insurance through exchanges will need information about their household income, personal identification information such as social security numbers and policy numbers for any current coverage. They also need to have information about any dependents, including social security numbers and income information. Those planning to sign up through exchanges also should try to assess their current and future medical needs in order to choose the right plan, tweeted NPAF. Consider whether you have any chronic illnesses that require monitoring and treatment, or whether you have children with allergies. Do you have a history of diabetes in your family? Knowing how much medical care you're likely to need over the next year, will help you choose the plan that best meets your needs at an affordable cost. To find out more, sign up for text or email updates through HealthCare.gov, the agency said.

What costs should people be ready for?

The exchanges will allow consumers to compare monthly premiums, annual deductibles, coinsurance and copays to evaluate out-of-pocket costs for each plan. HHS tweeted that 90 percent of those who are currently uninsured can qualify for discounted or free insurance. The health insurance exchanges are designed to provide that information automatically, when consumers fill out the online application forms. Help may come in different guises: lower premiums, tax credits or financial assistance. The marketplaces will also allow people to enroll into Medicaid or the Children's Health Insurance Program (CHIP).

People who do not sign up for a health insurance plan by March 31 will pay a tax penalty for each month that they are uninsured, and the penalty will increase every year until 2016. The fee in 2014 is 1 percent of a person's yearly income or $95 per person, whichever is higher, HHS said. But, the agency pointed out, those who do not sign up face even more significant costs. "They also have to pay the entire cost of all their medical care and won't be protected from very high medical bills."

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