If you’re looking to get health insurance, or even if you’re someone who’s had health insurance for years, there may be terms that you have heard but had no idea what they meant. For instance, have you ever wondered what on/off marketplace or on/off exchange means? Well, Jeff Hess, individual, group, and ancillary health expert here at Empower, knows the answer. Check out the video below!
The terms on-marketplace or on-exchange – or just the marketplace – mean the same. Essentially, they refer to clients going through healthcare.gov or at least having the application go out to receive help on the premiums. On-exchange, on-marketplace, or marketplace focuses on those people that are within 100-400% of the federal poverty level. There’s one caveat: there are some states that have expanded Medicaid to meet the federal guidelines. However, a majority of the states have not. So if you’re in a state that did not expand Medicaid, it’s 100-400%. If you’re in a state that expanded Medicaid, then you’re looking at about 138% of the federal poverty level to 400% of the federal poverty level. These people receive advanced premium tax-credits (APTC).
Advanced Premium Tax Credits
You’ll hear the acronym APTC a lot. The client, or applicant, receives advanced premium tax credit when they go in to healthcare.gov to verify their income level. Then, they find out their eligibility. For example, if I was applying and my income was X amount, the government could come back and say, “You get $256 a month.” That $256/month takes my insurance premium from $500/month, for instance, down to $244/month. It becomes more affordable. Bottom line, on-exchange is for those who want to see if they qualify for advanced tax-credits.
As for those people that are within 250% of the federal poverty level and below, they receive cost-sharing subsidies. Cost-sharing subsidies take a $6,850 deductible, for example, and, depending upon how close you are to the federal poverty line, take it all the way down to a $500 deductible. In some instances, it’s been reduced to a $0 deductible with a maximum out-of-pocket of $500. Where if you were over the 250% of the federal poverty level, your maximum out-of-pocket could be $6,850; it will take co-pays from $50 and bring them down to $25. Basically, it ratchets your out-of-pocket exposure to a minimum based on how close you are to the federal poverty level. So, the federal poverty level determines your advanced tax credits and your cost-sharing subsidies.
For the ACA plans that are off-marketplace or off-exchange, the application or applicant does not go to healthcare.gov. They’re paying the full premium. People who are over 400% of the federal poverty level shop off-marketplace so they have to pay the complete premium. Their plan does not change. Either they go to the carrier website with an agent to help them, or they complete a paper application. In other words, they don’t have to deal with the government. They simply buy a plan like they used to.
Does that mean it’s an old plan like they used to sell before 2014 or even before 2010? No. It’s still an Affordable Care Act plan. All individual plans and group plans for the most part are Affordable Care Act plans. It is the standard.
There are plans that are not qualified, or not Affordable Care Act “qualified plans”. An example of a non-qualified ACA plan is short term medical. Essentially, an non-qualified plan means (1) it doesn’t have the ten essential health benefits that are required for the law; (2) it’s not guaranteed issue; (3) it doesn’t have to cover pre-existing conditions. When you look at those three things, it tells you whether you have a qualified plan or not.
For those people that procrastinate and miss the open enrollment, then you may have to go out and get a non-qualified plan because those are sold year-round. When it comes time to enroll, you got to make sure that you enroll in the times that the government has set, which for 2017 health plans is November 1st through January 31st.
Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions. So if you have any questions or concerns, comment below and your question may be the topic of our next video!