Health Coverage through the Marketplace? To Buy (Participate) or Not?
July 10, 2013
By Louise Pongracz
One of the major components of the Affordable Care Act (aka “Obamacare”) is the upcoming introduction of “Marketplaces” or “Exchanges,” through which individuals can purchase health insurance directly. The Obamacare marketplaces are set to open in 2014, and can accept applications as early as this October. This means that starting very shortly, insurance companies will flood the airwaves and newspapers with ads encouraging people to purchase their company's coverage through the marketplace.
Union members can pretty much ignore these ads – it is very likely their employer-provided coverage will provide better benefits at a lower cost than anything offered on the marketplace. But that doesn't mean that union members and other workers won't be raising many questions about the Obamacare marketplaces. The information below should help answer those questions.
Can my members elect coverage on the Marketplace even though we have negotiated health benefits for them in the collective bargaining agreement?
Anyone can elect to purchase individual health coverage through the Marketplace, even if he or she has employer-provided coverage. However, this may well not be the best choice for most of your members.
In the first place, most collectively bargained coverage for full-time employees provides superior coverage, and at a lower cost to the individual, compared to the coverage that will be offered at the Marketplace.
Second, some members might be interested in the Marketplace coverage because they have heard about the financial support that might be available for purchasing Marketplace coverage. However, the Affordable Care Act provides that if an individual has employment-based coverage that meets or exceeds the Act’s “value” and “affordability” tests – which most collectively bargained plans, do – then the individual is not eligible for any of the financial support provided under the Act to purchase coverage through the Marketplace.
What financial support is available from the federal government to purchase coverage through the Marketplace?
The Affordable Care Act provides for financial assistance to purchase insurance coverage on the Exchange for individuals and families who earn up to 400% of the federal poverty level. The assistance is called the “premium assistance tax credit” or “PATC.” The amount of the PATC depends on family income and family size. The ACA provides assistance that caps both the amount of the premium a family must pay for coverage as well as their out-of-pocket costs (that is, deductibles and coinsurance).
Keep in mind, however, that even with this assistance, individuals and families should anticipate paying thousands of dollars annually for health insurance coverage and out-of-pocket costs for Marketplace coverage.
What are the “Marketplaces” or “Exchanges”?
The Marketplace, or Exchange, is a website that will provide “one-stop shopping” for health insurance. The Marketplace allows individuals to compare and buy insurance plans, either directly through the website, or by calling a toll-free telephone hotline. On the website, individuals will be able to compare information about health plans including availability, covered benefits, premiums, cost-sharing, provider networks, and financial information.
In every state, there will be a “Marketplace” administered either by the state or by the federal government. In Pennsylvania, we will have a “federally facilitated exchange,” meaning that the federal government will provide the “back office” but local insurance companies will offer products for Pennsylvania residents.
Is this government health care?
No. The plans offered for purchase through the Marketplace will be offered by private insurance companies, like Independence Blue Cross and Aetna. Individuals will also be able to access federal programs, like Medicaid and CHIP, if their incomes make them eligible.
Where will people go to get the information about the coverage available at the Marketplace?
Pennsylvania residents will have access to the Marketplace through the www.healthcare.gov website. For coverage effective January 1, 2014, individuals can start signing up through www.healthcare.gov as of October 1, 2013.
What kind of insurance can an individual buy through the Marketplace?
Independence Blue Cross, Aetna and other commercial insurance carriers will offer plans on the Marketplace and will develop the premiums for these plans. The ACA creates four benefit levels of coverage, or metallic tiers, based on how much of the cost is covered. The levels, called Bronze, Silver, Gold, and Platinum, are designed to make it easy to compare different health insurance plans. All plans contain the same core health benefits like doctor visits, prescription drugs, X-rays, and hospital stays. However, the premiums will differ depending on the level of deductibles and copayments that you select.
How much does Marketplace coverage cost?
We do not yet know what the cost of coverage from the Marketplace will be. The insurance companies have not yet announced the premiums for these products.