Health Insurance Marketplace Basics
Written by Shannon Saksewski
Regardless of your particular role, if you work in health care or if you’re looking to get your healthcare management degree, you should understand the basics of health reform. It is often mandatory for administrators to be educated regarding the basics of reform. However, anyone who interacts with patients should have a clear understanding of how the Affordable Care Act (ACA) might impact a patient and their ability to pay for healthcare. Too often, the ACA is not covered with any depth by graduate programs or continuing education opportunities. This article provides a basic overview of some of the key aspects of ACA Marketplaces and why they are important to individual consumers.
What is a Marketplace?
Have you heard of the Health Insurance Exchange? What about the Health Insurance Marketplace? They’re synonymous, though “Marketplace” is the updated and preferred term, as the word “Exchange” is not as easily translated from English to other languages.
Marketplaces are a new way for people to buy health insurance. They are online tools which are meant to allow consumers to compare private health insurance plans in terms of cost, quality, and benefits. There are, in fact, two types of Marketplaces: One for individual consumers, and another for small businesses (called the Small-business Health Options Program, or SHOP). This article will refer specifically to the Individual Marketplaces.
Each state will have its own Individual and SHOP Marketplace. Some states will run their own, others will opt to have theirs operated by the federal government, and still others will partner with the federal government. As part of the individual shared responsibility provision, health plans offered on a Marketplace must offer minimum essential coverage. In other words, the plan must be adequate (covering at least 60% of health care expenses), and affordable (the monthly premium must cost less than 9.5% of one’s income). Plans offered on the Marketplace must also cover essential health benefits like emergency services, maternity/newborn care, prescription drugs, rehabilitative services and devices, hospitalization, pediatric services, and ambulatory patient services.
Enrolling in Coverage
The window during which individuals must buy Marketplace coverage is called open enrollment. For the 2015 plan year, open enrollment will take place between November 15, 2014 and February 15, 2015. Unless there is a qualifying life event, it is not possible to enroll in individual coverage outside of this time period.
It’s important to keep in mind that simply choosing a plan does not mean that coverage begins immediately. Rather, enrollments which occur between the 1st and 15th of any month will be covered as of the first day of the following month (e.g., Enrollment: 2/2/15; Coverage begins: 3/1/15). Enrollments which occur after the fifteenth of any month will be covered on the first of the second month after the month in which enrollment occurs (e.g., Enrollment: 2/17/15; Coverage begins: 4/1/15).
Anyone who is a citizen or national of the United States, and who is not currently incarcerated, is eligible to buy through the Marketplaces. Enrollees will be able to choose from four plan “metal levels”. Each metal level is distinguished by the percentage of health care costs which they cover. Bronze plans cover 60% of the cost of care, silver covers 70%, gold covers 80%, and platinum covers 90%.
Choosing a metal level is only one aspect of finding the right health plan. Other factors include: whether one’s provider is in-network; the amount of the deductible; the total amount of out of pocket costs; specific benefits available through the plan; and more. For an overview of each of these concepts and why they are important, click here.
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This overview of Marketplaces provides an introduction to what is, in fact, an incredibly complicated and evolving topic. More information, and a glossary, can be found at healthcare.gov. We will cover subsidies—another crucial aspect of the ACA—in another article to be published in the coming weeks.
Join the Conversation!
Until then, we’d like to know what questions and/or concerns you have regarding Marketplaces. Please let us know by tweeting your comments and questions to @healthadmdegrees and @ssaksews.
Shannon Saksewski has been practicing and studying health strategy in multiple contexts for more than five years. She earned a BA in psychology and studies in religion, a MSW focused on counseling practice, and a MBA focused on health strategy from the University of Michigan. Shannon can be reached via email (firstname.lastname@example.org), Twitter (@ssaksews), or LinkedIn.