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October 10, 2013

Exchange or No Exchange? And, do I qualify for a subsidy?

Filed under: ACA - Affordable Care Act,Obamacare — Jeff @ 7:35 am

This one is easy. If you do not qualify for a subsidy, then do not go through an exchange. It takes you through needless hurdles and background checks that you otherwise do not need to face if you avoid the health insurance exchange. And, right now it is a very slow process due to the demand on the computer servers. In DC, however, you can only go through the exchange as plans are not sold off the exchange there. Otherwise, the exchanges really serve one purpose and that is to facilitate the subsidies. They first determine whether you qualify for a subsidy and what your portion of the premium is. Then they match your payment with the government payment and send that amount to the insurance company that you choose.

For the most part, insurance companies are trying to keep it simple and are offering the same exact plans both on and off the exchange. The plan is the same, the benefits are the same, the cost is the same and the payment to the broker is the same as well. Yes, brokers will still get paid the same whether they take you through the exchange, or whether they take you directly to the carrier. Though, the amount brokers get paid is drastically lower than pre-ACA. So…please be sure to support brokers through this process. The state is otherwise paying money to train people without insurance backgrounds to get licensed to help people on the exchange. Yes, they will be legally able to help folks once they have a license. But, I would not go as far to say that most will actually fall in the category of “qualified” to do so. And, as always, it costs you nothing to use a broker. You are actually put at a disadvantage without a broker because then you have to be completely reliant on the information you get from the customer service representative. You always have the option of calling the company directly, but with a broker, you will gain an advocate and an advisor — not just in picking the plan, but with claim issues, billing issues, canceling a plan, etc.

Moving on…Let us see if you qualify for subsidies. Here is a link to a subsidy calculator if you want to find out the actual, ballpark amount (ballpark, because you are still guessing your income for 2014). Or, you can look in the chart below for a quick glance to see if you qualify.

You qualify for subsidies IF you fall in one of these categories:
$11,490 to $45,960 for individuals
$15,510 to $62,040 for a family of 2
$19,530 to $78,120 for a family of 3
$23,550 to $94,200 for a family of 4
$27,570 to $110,280 for a family of 5
$31,590 to $126,360 for a family of 6
$35,610 to $142,440 for a family of 7
$39,630 to $158,520 for a family of 8

Where you fall in the category is what the calculator will help you with. If you are below the lowest level, then you should qualify for Medicaid (welfare). And, if you are above the highest level, then you exceed 400% of the FPL (Federal Poverty Level) and do not qualify for governmental premium assistance. Towards the lower income levels of that scale, there are additional assistances with deductibles and such as well, but I will not get into that here. Because, if you qualify, you will learn about that as you go through the process.

Your take away here is, if you qualify for a subsidy, call your broker and buy a plan through the health insurance exchange. If you do not qualify for a subsidy, then call your broker and buy a plan off the exchange. And, if you live in DC, just call your broker. Lastly, since it is not worthy of its own separate article here, DC runs their own exchange, Maryland (MD) runs their own exchange, and Virginia (VA) chose to do nothing which gives them the federally operated exchange. There are 26 states, including Virginia and Pennsylvania, that have decided to let the federal government run their exchange. Here is a link to the complete breakdown of state decisions for creating health insurance exchanges.