• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Obamacare Exchanges Launch: What You Need to Know

    Today’s launch of Obamacare’s exchanges represents the start of sign-ups for the law’s two new entitlement programs. To guide individuals seeking to understand the process, we’ve compiled answers to some basic questions about the exchanges.

    What are exchanges?

    In theory, exchanges are just a fancy term for insurance marketplaces, where consumers can shop for the plan that best meets their needs. In practice, however, Obamacare’s exchanges have taken on many regulatory functions that will restrict the choice of plans offered.

    Who may use the exchanges?

    Any American citizen or legal resident can purchase an exchange policy. However, exchange insurance subsidies are generally restricted to those individuals who 1) do not have access to “affordable” coverage provided by an employer, 2) are not eligible for benefits under Medicare or Medicaid, and 3) earn income under 400 percent of the federal poverty level (about $94,000 for a family of four). Individuals who meet these criteria may qualify for federal insurance subsidies provided on the exchanges.

    What kinds of plans are being offered?

    Under Obamacare, plans will offer a package of government-mandated “minimum essential benefits” in four tiers—bronze, silver, gold, and platinum. The “richer” the metal level, the lower the enrollee cost sharing—and the higher the premiums. A study in the prestigious journal Health Affairs last year concluded that all of Obamacare’s exchange plans will likely have richer benefits, and potentially higher premiums, than a majority of pre-Obamacare plans sold on the private market.

    Will the plans be affordable?

    The Congressional Budget Office concluded that premiums on the exchanges could be $2,100 per family higher due to Obamacare. While a recent report by the Administration claimed that premiums will be “lower than projected,” it did not say that premiums will be lower than in the current market. Moreover, many of the people receiving coverage under the law will be enrolled in Medicaid—a government program not accepted by many physicians, where patients often have poor health outcomes.

    Will I be able to see my current doctor?

    That depends—but in many cases, physician access on exchange plans may be limited. Recent articles in The New York Times and Los Angeles Times have emphasized that, to keep down premium increases, many insurance companies have restricted the number of “in-network” doctors or hospitals. Patients may face a choice of traveling longer distances to visit in-network hospitals, or paying higher co-payments to see an out-of-network physician.

    What happens if I don’t purchase coverage?

    Individuals who do not have insurance through an employer or a government program like Medicare or Medicaid, and who do not buy coverage, may be subject to tax penalties beginning next year for violating Obamacare’s individual mandate. However, because the penalty for violating the mandate starts at $95 in 2014, some may find it preferable to pay a small annual penalty rather than higher monthly premiums.

    Posted in Featured, Front Page, Obamacare [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×