You’ve probably heard that all Americans will be required to have health insurance by January, 2014. If your employers don’t offer health insurance, where are you supposed to buy affordable coverage?
A large part of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, are the Health Care Exchanges. There is a lot of confusion about these exchanges: what is their purpose, how do they work, when will they be available, do I have to go to an exchange to get my health insurance?
A Health Care Exchange is a web portal where you can go to buy your health insurance. There will be two types of exchanges. The first is a Public Exchange. A Public Exchange is one that is run either by the state or by the federal government. There are some states that have said they will not operate an exchange.
If you live in one of those states, that doesn’t mean you won’t have access to an exchange, it means that the exchange in your state will be run by the federal government. In Indiana, the public exchange will be run by the Federal Government.
The second type of exchange is the private exchange. These exchanges will be run by private companies such as insurance providers, insurance brokers or benefits consultants. Most of these exchanges will be run by companies already in the health insurance business in some way.
An important point to remember when deciding whether to go to a private of public exchange are the tax subsidies. If your household income is between 100% and 400% of the federal poverty level, you may be eligible for tax subsidies if your employer does not provide affordable health insurance. What is the income range for 100% to 400% of the poverty level? That depends on your family size.
According to Families USA, a family of four who earns between $23,500 and $94,200 annually will be eligible for a subsidy. The more you make, the less your subsidy will be. These subsidies are only available if you use a public exchange. If you use a private exchange, you will not get the subsidy.
Whether you use a private or public exchange will depend on your personal situation, but if you are eligible for a tax subsidy, you will be better off going to a public exchange.