The Affordable Care Act (ACA), commonly known as ‘Obamacare’, only changed how policies are sold and bought in the marketplace going forward. There is no government health plan that was attached to the law. When someone purchases a plan, on or off the Health Insurance Marketplace/Exchange, they are purchasing the plan from the carrier that is offering the coverage. All the customer service, claims, and invoicing come from the actual health insurance company picked by the policyholder, not the government or anything called ‘Obamacare’.
Policyholders can now receive a tax credit, if they qualify. The tax credit is based on a number of factors, such as family status, income and percentage of the premium. There is a little more to the equation, so please seek a tax professional or insurance agent to receive more information on qualifications. The amount of the tax credit will vary based on these factors. For this year, the tax credit is based on the estimated income for 2014. We are pretty much predicting the future on the income but it will be reconciled on the 2014 tax return, filed in 2015. Be very careful with this. You could end up owing the whole tax credit back when you file your taxes. Please seek a professional with experience on the Health Insurance Marketplace to get the best answer for your situation.
The policies inside the Health Insurance Marketplace and outside of the Marketplace are the same. No difference. The plans are exactly the same; the premiums are exactly the same. Even the network of doctors and hospitals are the same. The only difference is the amount of tax credit one may qualify for versus another policyholder. Otherwise, everything is the same.
Of course, this is assuming we are comparing the same policies, premiums and provider network.
The insurance companies have more flexibility selling plans outside of the Marketplace. In many cases, if they operate outside of the Marketplace, there will be more plan options available to you that are not available through the Marketplace. There are certain guidelines that must be met for policies to be sold inside the Marketplace and receive a tax credit.
The major confusion is that the plans sold inside the Health Insurance Marketplace are different than what is available outside of the Marketplace. This is simply not the case.
The only thing that makes the Health Insurance Marketplace so special is the tax credit. If you do not receive a tax credit, there is no incentive to actually purchase a plan inside the Health Insurance Marketplace. The plans are the same along with the network. If your friends and family claim they are paying less premium for their new plan they purchased than before, it only means one of two things: 1) they were paying a huge amount to begin with; 2) they received a good tax credit to reduce their premiums.
There is a lot of confusion and more to come with the changes in the healthcare law. Always use a health insurance professional that is familiar with these changes. This will help you choose the right plan for you and your family and keep it affordable.
Butch Zemar
EliteBenefits.net