The new health insurance exchanges are either about to open or have just opened depending on when you read this article. These exchanges are essential to the Affordable Care Act or what is commonly known as Obamacare. Your state may have set up its own insurance exchange or if not, the federal government will have set up one. In either event, here are nine things these exchanges won’t tell you.
1. You might be kicked out of your current plan
In some cases, employees are being kicked off the health insurance plans of their employers and sent to exchanges but not to these health insurance exchanges. As an example of this, Time Warner, Walgreen and IBM – along with some of the country’s other biggest corporations − have said that in place of offering traditional health benefits to their workers they would send some of their current or retired employees to buy coverage at insurance exchanges. However, these are not the Obamacare insurance exchanges. They are what are called commercial exchanges. They are private exchanges operated by benefit firms such as Aon Hewitt and Towers Watson.
2. “We’re not very well understood”
Despite the fact that there has been a lot of discussion regarding the insurance exchanges, they tend to remain a fairly abstract concept. A lot of people thought these marketplaces would look like shopping malls. However, in reality they will essentially be websites where you will be able to compare insurance plans sort of the way you would compare airline flights.
3. Don’t ask us for advice
There are people called “navigators” who have been trained to facilitate enrollment, which means helping people set up online accounts or apply for a subsidy. However, they are not allowed to recommend or choose plans on a consumer’s behalf. This means that ultimately you’ll be on your own.
4. The blue states do it better
Many of the red states or those governed mostly by Republicans have been stalling when it comes to Obamacare. Some are actually refusing to run exchanges. In fact there are 34 states that have refused to run exchanges altogether. Because of this, their exchanges are run by federal health officials and tend to have fewer resources supporting enrollment and have encountered more holdups than those run by states.
5. “You’ll still pay for this insurance even if you don’t need it”
If you receive health insurance through your employer you won’t be eligible for any of the subsidies available on the exchanges. As a result, your company plan is almost surely going to be a better deal than individual policies – just like today. But this doesn’t mean you won’t pay for marketplace plans – at least indirectly. There is a provision in the Obamacare Act that requires your employer to pay fees that will help cover those Americans who were previously uninsured and may have had ongoing health problems. Until the day comes when these fees are phased out, employers are going to pass them on to their workers in the form of rate increases.
6. Don’t abuse our honor system
One of the most important parts of the Affordable Care Act is that lower-income people are entitled to receive subsidies on health insurance through the exchanges. In fact, people up to 400% of the federal poverty level will be eligible. However, there were certain processes for verification of eligibility that had to be delayed until 2015. This means exchanges will have to rely on the honor system to calculate subsidies for 2014. However, if you are dishonest about your eligibility, there are penalties that range from jail time to big fines.
7. “We are a target for hackers and con artists”
You need to be aware of possible threats in the marketplace. Scammers inevitably try to take advantage of developments in the marketplace and the new government programs. While healthcare officials say they are not yet seeing fraud on any big scale, previous initiatives such as Medicare have attracted criminals and it’s likely that Obamacare will as well
8. It’s possible you won’t be able to keep your doctor
President Obama said that if you like your doctor you will be able to keep him or her. However, this may not necessarily be true. Many plans available through the exchanges strictly limit the network of doctors they will pay for. You can look for a plan that includes your doctor but in some marketplaces you may not find him or her. McKinsey and Company found in 13 states that nearly half of the exchange plans have very limited networks.
9. The competition in marketplaces is a work in progress
One key element in Obamacare is the idea that the marketplace exchanges will help keep insurers’ prices down because they will have to compete with one another. However, so far the marketplaces are having another effect on major insurance companies, which is scaring them away. CIGNA, the UnitedHealth Group and other large insurers have refused to join many of the states’ exchanges to date. And Aetna backed out of seven exchanges it had originally joined saying that it just couldn’t effectively compete and cover its costs.
What to do
Given all of this, if you need to buy insurance you might want to wait a bit before going to your state’s marketplace and committing to a plan. Obamacare represents a huge and complex undertaking and it may take a while for it to shake out the kinks. If you can, you might wait a month or two then dial into your local marketplace and see what’s available.
Finally, here’s a video from Kaiser Permante with more information about the Affordable Care Act (Obamacare).
