While the actual law itself is a couple thousand pages long, and has plenty of guidelines and stipulations. It all comes down to these marketplaces and how they will provide you with a completely new(ish) way to buy health insurance in a few months.
Ohio's Health Insurance Marketplace will be run by the federal government and as of right now include 14 different insurance companies selling a variety of plans.
But what are these mythical marketplaces? More importantly, should or do you have to buy your Ohio health insurance this way?
NOTE: At the beginning of the year President Obama renamed Ohio's health insurance exchange to now be called marketplaces.
Let's take a look a four reason you might want to consider taking advantage of Ohio's health insurance marketplace by shopping there.
1. Tax Credits/Subsidies
If you are eligible to receive a federal tax credit to help lower the cost of your health insurance, this is the only place you will be buying your health insurance from for a while. That is unless you're one of the few people allergic to extra money.
Here's an estimated look at the income rages broken up by family size:
- Individual - $11,615 - $46,600
- Family of 2 - $$15,730 - $62,900
- Family of 3 - $19,810 - $79,210
- Family of 4 - $23,800 - $95,500
These tax credits will be applied automatically based on your income if you buy through the Ohio Marketplace. That means you don't need to worry about doing anything fancy come tax time to make sure you get reimbursed.
You simply play the adjusted, lower rate from the first day you buy the policy. The insurance companies and federal government will handle the rest.
2. Cost Sharing Subsidies
This is where things get a little more complicated.
If you meet even more specific income requirements, you will qualify for subsidies to help lower deductibles and copays or in fancy insurance speak pay for your out-of-pocket costs. To qualify, your income needs to be between 100 and 250 percent of the federal poverty line.
NOTE: These subsidies are only available on Silver plans, which cover 70% of your benefits. You cannot buy a gold, bronze or platinum plan and still qualify.
This is what your updated coverage amount would look like, based on poverty level, after the cost sharing subsidies have been applied.
| FPL | Coverage |
|---|---|
| 100-150% | 94% |
| 150-200% | 87% |
| 200-250% | 73% |
3. Easy Plan Identification (Medals)
All plans sold inside Ohio's health insurance marketplace will be assigned a medal to indicate the amount of coverage it provides.
You will have a choice between bronze, silver, gold and platinum which will pay for a maximum percentage based upon it's level.
Here's a breakdown of the different levels:
I know gold and platinum are the standard for luxury, however I would caution you against lusting after those precious medals as the commoners medal, bronze will provide plenty for the savvy marketplace shopper.
4. Limit On How Much You Pay
If all that wasn't enough, you might also be interested in the fact that, as part of the law, only a certain percentage of your income is allowed to pay for health insurance costs.
Here is a breakdown of how much of your income should go towards health insurance in relation to your position on the federal poverty line.
- Up to 133% FPL - 2% of income
- 133-150% FPL - 3-4% of income
- 150-200% FPL - 4-6.3% of income
- 200-250% FPL - 6.3-8.05% of income
- 250-300% FPL - 8.05-9.5% of income
- 300- 400% FPL - 9.5% of income
NOTE: If you haven't already, you will want to calculate your exact tax subsidy eligibility using this calculator.
The Bottom Line
Ohio's health insurance exchange or marketplace is going to offer you plenty of financial incentive to buy from it. If you fall into one of those income ranges you will have a hard time justifying buying your health insurance elsewhere.
However, if you don't, there's a good chance you might want to sidestep this entire process and check out the “private” market (that's where and how you have been buying health insurance all this time). That's what I will be getting into next week, taking a look at a few cons buying health insurance through these new exchanges or marketplaces.
You Tell Me
Will these tax credits help you afford health insurance? Do these medals make it easier for you to understand your options?