Who can shop the health insurance exchanges?

Health insurance marketplaces created by the federal health care reform law will be opening for business this fall. And this raises the question for many Americans – are you allowed to shop the health insurance exchanges?

Experts say almost anyone can shop in the health exchanges, which will operate in each state and be run by either the state or federal government. But whether you’ll be able to get a subsidy to pay part of your insurance premiums depends on whether you can get healthinsurance coverage through work, what that coverage looks like, and how much money you make.

Who can shop the health insurance exchanges

Here’s a look at three groups of consumers and how shopping in the health insurance exchanges might work for each one.

shop-health-insurance-exchange1. You have health insurance through work.

If you can get health insurance through your job, you still can shop on the exchange, according to the Kaiser Family Foundation. But, in most cases, you probably won’t find a better deal than you’re getting through work, experts say. That’s because employers often pay at least 50 percent – and sometimes up to 90 percent – of the premiums for employees covered in their group plans. “Anyone can go to the exchange,” says Claire McAndrew, senior health policy analyst for Families USA, a non-profit health care advocacy organization. “But you’d be turning down an employer subsidy, which is hard to imagine.”

There are exceptions to the rule, though. For example, you will be able to shop in the health exchanges and get a tax credit to help pay your premiums, according to the Kaiser Family Foundation, if:

•You have a family income of less than or equal to four times the federal poverty level – that’s $94,200 for a family of four in 2013, and:

Either your employer plan covers less than 60 percent of your health care costs, or

•You pay more than 9.5 percent of your income in premiums for your work plan.

And, if you can get health insurance coverage through work but have a family income of 133 percent of the federal poverty level or less – that’s $31,322 for a family of four in 2013 – you might be able to get coverage through Medicaid. If you live in a state that agrees to expand Medicaid under the federal Patient Protection and Affordable Care Act (PPACA) you likely will qualify for the program. Medicaid coverage could be used instead of insurance through a job or in addition to it, to cover costs not covered by the work plan. So far, 20 states, including California and New York, have agreed to expand Medicaid.

2. You don’t have health insurance through work.

Maybe you’re self-employed, you work part-time or you can’t get employer-sponsored coverage for some other reason. In this case, you’ll probably buy your health insurance through an exchange, experts say.

If you don’t have coverage available through work and your household income is up to four times the federal poverty level-- for example, $45,960 for one person, $78,120 for a family of three or $126,360 for a family of six – you’ll also be able to get a subsidy to help pay your premiums. That means you’ll get a tax credit that will be paid directly to the insurance company to cut the amount you have to pay.

But not everyone who lacks coverage through work will be eligible for a subsidy through an exchange. If your household income is more than four times the federal poverty level, you will be able to shop for health insurance in an exchange – but you’ll have to pay full price, according to Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University.

And, finally, if you have a family income equal to or less than 133 percent of the federal poverty level – that’s $15,282 for one person, $25,975 for a family of three or $42,015 for a family of six – you probably will be eligible for Medicaid if your state has opted for expansion of this program, according to Kaiser Family Foundation.

3. You work for a small business.

If you work for a company that has less than 100 employees – or less than 50 in some states, until 2016 – you might be eligible to shop for health insurance on a Small Business Health Options Program (SHOP) exchange or, in some states, in a merged individual/SHOP exchange, says Sally McCarty, senior research faculty at the Georgetown University Health Policy Institute. Small employers will decide how much to contribute toward their employees’ premiums.

Who can’t shop the health insurance exchanges

So, who can’t shop in the health insurance exchanges? Experts say undocumented immigrants aren’t allowed to shop in the exchanges at all.

While consumers in most states also will be able to shop outside the exchange for a health insurance plan, it’s generally a good idea to stick with the exchange, according to Corlette: “You can shop with confidence that you’re choosing amongst good products.”

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