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Your Cheat Sheet to the Health Care Law’s New Marketplaces


It’s time to hit the market, America.

On Tuesday, the Affordable Care Act’s health insurance exchanges, or “marketplaces,” open for business. That is, of course, after a presidential election, a narrow Supreme Court decision and countless rounds of political maneuvering failed to topple the health care reform law. And what that means for millions of uninsured Americans is they’ll need to start shopping or prepare to face a fine. But many are still left with some very basic questions. Primarily: What are the exchanges and how do they work? If you’re among the confused, the PBS NewsHour has you covered. Here’s your guide.

What is an insurance exchange?

An exchange is an online marketplace where individuals or small businesses can easily compare prices and plans and then sign up for insurance. At least that’s the intent.

Related: Exchange Basics

What’s the timeline for enrolling?

The exchanges are scheduled to open Oct. 1 at 8 a.m. EDT and will remain open through March 31. Those wishing to receive coverage Jan. 1 will need to sign up by Dec. 15.

How does it work?

Visit Healthcare.gov or the website for your state’s exchange. First, create an account and plug in the requested information, including age, income, household size, citizenship status, where you live and whether you smoke.

Those who qualify for Medicaid will be referred to their state’s Medicaid program. Those eligible for a subsidy will be told how much they will receive. Next, the exchange will show a list of health plans, including information about premiums and out-of-pocket costs, including deductibles and co-payments.

Are there other options for less tech-savvy Americans?

You can also apply over the phone or with a paper application. The federal and state exchange sites have toll-free numbers where you can find information about getting further assistance.

Who’s eligible to use the exchanges?

Almost everyone will be eligible to purchase insurance through the exchanges, but most won’t need to. The vast majority of Americans currently receive insurance through their employers or through federal programs like Medicare or Medicaid. Those individuals will not qualify for subsidies on the exchanges. If all goes according to plan, that coverage won’t change — at least not immediately. The exchanges are for people who don’t have insurance or who want to buy it on their own.


Who won’t be able to sign up?

Immigrants who are living in the U.S. illegally will be barred from purchasing insurance through the exchanges.

Will all states have an exchange?

Yes. Sixteen states and the District of Columbia are running their own exchanges, with 27 others opting to allow the federal government to run their exchange entirely. Officials in the remaining seven states will be partnering with the federal government on their marketplaces.


What kind of plans will be available?

Plans sold on the exchanges must offer a set of “essential benefits” — including prescription drugs, emergency care, maternity and mental health care, among others — and cover roughly 60 percent of your medical bills. From there, you can decide whether to pay a higher premium and get more of your benefits paid in the event of sickness, or pay a lower premium and run the risk that, if you get sick, you are going to have to pay more of your bills out-of-pocket.

There are bronze, silver, gold, platinum plans, each covering different percentages of your out-of-pocket costs.


What if I have a pre-existing condition?

Beginning Jan. 1, insurance companies will be banned from charging people with pre-existing conditions higher rates for health coverage. The prices on the exchanges will reflect this new requirement.

What if I can’t afford the premiums?

If you make up to 400 percent of the federal poverty level — that’s about $46,000 for an individual or $94,000 for a family of four — you will probably qualify for a tax credit to help you pay for coverage. Those making up to 250 percent of the poverty level — which is about $28,725 for an individual or $58,875 for a family of four — will also receive help with cost-sharing to reduce the price of copayments and deductibles.

Do I have to wait until the end of the year to get these tax credits?

No. If you qualify for the tax credits, the government can send its portion of your premium directly to the insurer, so it will help immediately offset the cost of your plan.

What if I want to pay the fine instead of buying coverage?

If you don’t have insurance in 2014, the fine is $95 or 1 percent of your taxable income, whichever is greater. That money will be due at tax time in 2015. The fine goes up over several years. Eventually, it becomes $695 or 2.5 percent of your income.

But there are a lot of people who won’t be subject to the fine if they don’t have insurance. If you make less than about $10,000 per year as an individual or $20,000 for a couple and aren’t required to file federal income taxes, the penalty won’t apply to you. The same is true if you’re in the U.S. illegally, are a member of a certain religious orders or make so little that the lowest-cost insurance available is more than 8 percent of your gross income, you are exempt.


How likely is it that my employer will drop health coverage or force some people onto exchanges?

Companies including Walgreens, Time Warner, Sears and Trader Joe’s have already announced plans to shift coverage for some onto the exchanges or privately run versions.

Is it a trend? While predictions vary, recent analysis in the journal Health Affairs found that large firms are unlikely to drop coverage for full-time workers en masse. It’s much less clear which direction small companies will take. Read the full analysis here.


How many people are expected to sign up?

The first year, the Congressional Budget Office estimates that only about seven million people are going to sign up for the exchanges out of more than 300 million Americans.

As the insurance marketplaces go live, we want to hear from you. Have you tried signing up for coverage on the online exchanges? Did you experience any technical difficulties? How easy or difficult was it to apply for the subsidy? Share your thoughts in the comments section below.

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