Everyone Has Access to the Marketplace
The Affordable Care Act began on January 1, 2014. Several protections were put in place under this law, including requirements for insurance companies to cover individuals with pre-existing conditions, allowing young adults the option to remain on their parents’ plan until age 26, and making it illegal for health insurance companies to cancel your coverage due to illness.
Under the Affordable Care Act, premiums can only be affected by five things: your age, the number of people in your family, tobacco use, an adjustment for your geographic area, and the type of plan you choose.
If you do not have health insurance through an employer or a working spouse, you can obtain a plan through your state’s health insurance marketplace. Also known as health insurance exchanges, these sites show you the available plans in your area so you can compare premiums. Some states, like California, have their own exchange sites, while other states use the national site at HealthCare.gov.
Health Exchange Premiums Vary
The plans available in the health exchange vary significantly in cost. The available plans are divided into different “metal” categories: platinum, gold, silver, and bronze.
Platinum plans have the highest premiums, with insurance companies paying 90% of your costs. Bronze plans have the lowest premiums, with the insurance company paying about 60% of the qualified healthcare costs you incur, while you pay 40%. Silver and gold plans are in the middle.
It’s worth noting that the average monthly premium for the lowest-cost bronze plan in 2022 was $329, according to the Kaiser Family Foundation. For the lowest-cost silver plan, it was $428, and for gold plans, it was $462.
You can choose plans with lower or higher deductible limits within these categories. To calculate the potential maximum cost for the year, add together the monthly premiums for the year plus the maximum out-of-pocket expenses you’ll pay. This gives you an idea of the worst-case scenario when it comes to your healthcare costs.
Open Enrollment Happens Once a Year
You can only enroll in a health exchange plan during the open enrollment period or during a special enrollment period. The open enrollment period starts every fall and runs from November 1 to January 15, with coverage starting on January 1 if you sign up by December 15.
If you experience a significant life change, you qualify for a special enrollment period. Life changes include: marriage or divorce, having a baby or adopting a child, moving, losing health insurance coverage, becoming a U.S. citizen, and leaving incarceration.
To apply for a plan during a special enrollment period, visit HealthCare.gov or your state’s health exchange website. Indicate that you qualify for a special enrollment period. You will need to state the reason and may need to provide proof of the change, such as a marriage certificate or divorce decree.
Health Insurance Is No Longer Required, But You May Want It
You have the option not to obtain health insurance, and you will not face a penalty for doing so.
When the Affordable Care Act was initially passed, there was a tax penalty for not buying health insurance. The tax penalty was abolished as part of the Tax Cuts and Jobs Act that was passed in 2017. The last year you could be subject to the tax penalty was 2018.
This means you can forgo health insurance without owing a tax penalty. While it may be tempting to bypass insurance to ease your budget, keep in mind that medical expenses and loss of work due to illness or both contributed to 66.5% of personal bankruptcy cases from 2013 to 2016 among respondents. Going without health insurance can have serious long-term consequences.
Taxes
Health Insurance Subsidies
There is a tax credit, or subsidy, available to make health insurance premiums more affordable. The value of the tax credit depends on your income. You can apply some or all of the tax credit to your monthly health insurance premiums to lower costs.
This tax credit is available to individuals and families with an adjusted gross income that falls within certain limits.
Source: https://www.thebalancemoney.com/health-exchange-plans-2388476
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