The Marketplace: Another way to buy health insurance

Health Insurance Exchanges

Beginning Oct. 1, 2013, individuals and small businesses can shop for health plans that go into effect on Jan. 1, 2014, through insurance Marketplaces, also called exchanges, in each state. People will still be able to purchase insurance directly from an insurance company or through a broker. The Marketplaces simply offer a new option. They are intended to increase the size of the insured pool to spread out risk and keep costs stable.

Marketplaces are designed to simplify shopping for and buying insurance. They offer consumers information on the quality of health plans. They won’t sell plans that fail to meet minimum quality standards and benefit packages set by the federal government.

Each Marketplace organizes health plans into tiers—bronze, silver, gold, and platinum—based on how much of the cost customers take on. The Affordable Care Act (ACA) also requires insurers to justify annual price increases to the Marketplace board.

ACA ordered states to create Marketplaces, which may be set up as state agencies, independent governmental entities or nonprofits. As of May 2013, 16 states plus the District of Columbia established Marketplaces, seven are planning for a partnership Marketplace, and 27 have decided not to create a state Marketplace and default to a federal Marketplace.

Marketplace Plans

Plan category Benefits
Bronze Minimum creditable coverage. Provides essential health benefits. Covers 60% of costs with an out-of-pocket limit equal to the Health Savings Account (HSA) law limit* ($6,350 for individuals, $12,700 for families in 2014).
Silver Provides essential health benefits. Covers 70% of costs with an out-of-pocket limit equal to the HSA law limit.
Gold Provides essential health benefits. Covers 80% of costs with an out-of-pocket limit equal to the HSA law limit.
Platinum Provides essential health benefits. Covers 90% of costs with an out-of-pocket limit equal to the HSA law limit.
Catastrophic Restricted to individual market only. Available to those up to age 30 or who receive a hardship exemption from the federally facilitated Marketplace. Provides catastrophic coverage with the coverage level set at the current HSA law levels, except that preventive benefits and coverage for at least three primary care visits are exempt from the deductible.
*Source: www.irs.gov/pub/irs-drop/rp-13-25.pdf

 

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