Monday, October 14, 2013

Do you need to go to the Obamacare exchange?

There seems to be some confusion over the new health exchanges set up under the federal Affordable Care Act.

The exchange is not for everyone.

In fact, even if you are uninsured, you do not have to go to the exchange to get coverage. You can go directly to an insurance company, but you might miss out on some benefits if you do.
Be careful not to get snookered. Beware of private companies not informing you of potential subsidies.  There is no harm in going to the exchange first.

To qualify for subsidies available under the law you must go to the exchange. Fill out the application at It will tell you whether you qualify. Hopefully the site’s problems will be worked out soon but there is a paper application process. And remember, before blaming the glitches on Obamacare, remember that Michigan could have set up its own exchange instead of relying on the federal government. States that set up their own exchanges are experiencing far fewer problems than states that failed to do so.

Also, to apply for Medicaid, go to the Michigan Department of Human Services website, not the health exchange, although the exchange will tell you if you qualify.

Medicare recipients do not need to go to the exchange. They can apply at

The exchange is mostly for the uninsured, but others may benefit as well, according to information provided by Kaiser Health News and Cosmopolitan. If you have employer-based coverage, you may have no need to go on the exchange. But if your share of the premium costs more than 9.5 percent of your annual gross income, you may qualify for a subsidy. If you currently have an individual policy that you bought for yourself, you may find a better deal on the exchange because it offers subsidies that could lower your costs.

Roughly 80 percent of people who buy exchange plans will qualify for premium tax credits, according to Avalere Health. The credits, 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) will be based on your projected income for next year.

Altruis Benefit Counseling supplied the following figures:
•Single Person - $45,960 per year
•Couple - $62,040 per year
•Family - $94,200 per year

Subsidies can be sent directly to the insurer, reducing your monthly premium. If your income estimate is too low, however, you could have to repay at tax time any excess amounts you received.

Families USA crunched the numbers for a few different scenarios. By its estimates, a family of four earning $94,200 and purchasing a silver-level plan carrying a $12,500 annual premium will get a subsidy worth $3,550, which limits the cost of the premium to 9.5% of the family's income.

The government hasn't yet released its own estimates on how many Americans will be eligible for the subsidies, but Families USA believes that up to 26 million citizens will meet the criteria.

Not everyone eligible for those subsidies will actually sign up, though. The Congressional Budget Office is forecasting that only 6 million people will receive subsidized coverage through an exchange next year. It expects that number to grow to 22 million by 2017.

There are really just two important dates to keep in mind, according to a National Public Radio report. The first is Dec. 15. That's the date by which you need to be signed up if you want your coverage to begin Jan. 1, 2014 — the earliest any of these plans will take effect. The other date is Feb. 15, 2014. That's the last day you can get coverage and avoid being liable for a penalty for not having insurance. The maximum penalty if you don't have coverage for the entire year is $95 or one percent of your taxable income, whichever is bigger. It will go up in future years.

One thing is certain: There is no need to make the process more complicated than it needs to be. The resources for understanding the program are virtually  endless.

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