Start Your Exchange Shopping Early, But Don't Rush To Buy
In recent months, all eyes have been focused on today, the day health insurance marketplaces open for business. While the date is a milestone in the implementation of the health law, other dates are likely more critical for consumers planning to shop for health insurance on their state marketplace.
Start Window Shopping Early
Experts say they expect few consumers to enroll in a plan right away in October—and that may be wise. They advise that it's a good idea to start looking at the options early and to give yourself plenty of time for the application process. " Expect glitches " has become the catchphrase for officials who are working on implementation of the marketplaces, as well as politicians of every stripe, including President Barack Obama.
That's not all. Health insurance is a complicated product. Understanding how the plans work and picking one that suits someone's needs will take time, perhaps several visits to the marketplace website or conversations with those trained to help with enrollment.
"I think it's going to be a pretty thoughtful process for most people to make a decision," says Mila Kofman, executive director of the DC Health Benefit Exchange Authority.
The open enrollment period for 2014 marketplace coverage runs through March. The uninsured and people who don't get insurance through work and purchase their own policies on the individual market will make up the bulk of the 7 million people expected to buy coverage on the marketplaces, also called exchanges.
Dec. 15 Looms Large
The health law's mandate that most people have coverage goes into effect Jan. 1. But consumers can't wait until New Year's Eve to meet that deadline.
In general, consumers who want insurance to begin on the first day of any month have to enroll by the 15th day of the previous month. So someone who wants coverage to start on Jan. 1 should buy a plan by Dec. 15. If someone signed up from Dec. 16 to 31, coverage would begin Feb. 1 at the earliest.
Experts say they expect a rush of activity around Dec. 15 before the Jan. 1 coverage requirements kick in and again in mid-March before the open enrollment period ends.
Second Thoughts Are OK
If people sign up for a plan but then decide during the annual enrollment period that they want to switch, they can do so as long as their policy hasn't yet become effective, according to the Department of Health and Human Services.
If someone signs up in November for a plan that starts Jan. 1, for example, she could switch to another plan until Dec. 31. If she waited until after Dec. 15 to make a change, however, the new coverage wouldn’t begin until Feb. 1 and she would be without coverage in January.
Once a consumer's plan actually becomes effective, in general no changes may be made until the following open enrollment period. Next year that will be between Oct. 15 and Dec. 7. There are exceptions if someone experiences a significant change in life circumstances, such as a birth, divorce, job loss or permanent relocation.
Although the law requires most people to have insurance starting in January, people are allowed to be uninsured for a three-month period once a year without penalty. The latest date that someone could generally buy a plan and avoid facing a penalty for being uninsured next year would be March 15 for coverage that starts on April 1, three months after the coverage requirement kicks in, says Carrie McLean, director of customer care for ehealthinsurance.com, an online vendor that has received approval from the federal government to sell exchange plans on its site.
What Information You’ll Need To Gather
When consumers call or visit their state exchange website or stop by in person to get assistance with enrollment (contact information for all options are available through healthcare.gov or state insurance departments), they’ll need to have certain personal information available, including Social Security numbers and health insurance policy numbers for any health plans that cover household members.
Federal officials estimate that most people who enroll in an exchange plan will be eligible for subsidies to help cover the cost of premiums. These subsidies, which will come in the form of tax credits, will be available to people with incomes up to 400 percent of the federal poverty level ($45,960 for an individual or $94,200 for a family of four in 2013). To help determine eligibility for subsidies or health insurance programs for people with lower incomes, such as Medicaid and CHIP, consumers will need income information such as pay stubs available for everyone who is seeking coverage.
Subsidies will be based on an estimate of income for the coming year. If a consumer expects a bonus or raise, it's important to factor that in, say experts. Otherwise, consumers may receive a bigger premium tax credit than they're entitled to and have to repay it in their 2014 taxes when the IRS reconciles their actual income with the amount they projected.
"If you anticipate an increase in income over the course of the year, people can choose not to take the full tax credit up front," says Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation (KHN is an editorially independent program of the foundation.) "They may be better off paying a little more up front [themselves] toward the premium, so they're at lower risk of having to repay at the end of the year."
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Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.