Buying your own health insurance will never be the same.
This fall, new insurance markets called exchanges will open in each state, marking the long-awaited debut of President Barack Obama’s health care overhaul.
The goal is quality coverage for millions of uninsured people in the U.S. What the reality will look like is anybody’s guess — from bureaucracy, confusion and indifference to seamless service and satisfied customers.
Exchanges will offer individuals and their families a choice of private health plans resembling what workers at major companies already get. The government will help many middle-class households pay their premiums, while low-income people will be referred to safety-net programs they might qualify for.
Most people will go online to pick a plan when open enrollment starts Oct. 1. Counselors will be available at call centers and in local communities, too. Some areas will get a storefront operation or kiosks. Translation to Spanish and other languages will be provided.
When you pick a plan, you’ll no longer have to worry about getting turned down or charged more because of a medical problem. If you’re a woman, you can’t be charged a higher premium because of gender. Middle-aged people and those nearing retirement will get a price break: They can’t be charged more than three times what younger customers pay, compared with six times or seven times today.
If all this sounds too good to be true, remember that nothing in life is free, and change isn’t easy.
Starting Jan. 1, 2014, when coverage takes effect in the exchanges, virtually everyone in the country will be required by law to have health insurance or face fines. The mandate is meant to get everybody paying into the insurance pool.
Obama’s law is called the Affordable Care Act, but some people in the new markets might experience sticker shock over their premiums. Smokers will face a financial penalty. Younger, well-to-do people who haven’t seen the need for health insurance may not be eligible for income-based assistance with their premiums.
Many people, even if they get government help, will find that health insurance still doesn’t come cheaply. Monthly premiums will be less than the mortgage or rent, but maybe more than a car loan. The coverage, however, will be more robust than most individual plans currently sold.
Consider a hypothetical family of four making $60,000 and headed by a 40-year-old. They’ll be eligible for a government tax credit of $7,193 toward their annual premium of $12,130. But they’d still have to pay $4,937, about 8 percent of their income, or about $410 a month.
A lower-income family would get a better deal from the government’s sliding-scale subsidies. Consider a similar four-person family making $35,000. They’d get a $10,742 tax credit toward the $12,130 annual premium. They’d have to pay $1,388, about 4 percent of their income, or about $115 a month.
The figures come from the nonpartisan Kaiser Family Foundation’s online Health Reform Subsidy Calculator. But while the government assistance is called a tax credit and computed through the income tax system, the money doesn’t come to you in a refund. It goes directly to insurers.
Obama’s law is the biggest thing that’s happened to health care since Medicare and Medicaid in the 1960s. But with open enrollment for exchange plans less than 10 months away, there’s a dearth of consumer information. It’s as if the consumer angle got drowned out by the political world’s dispute over “Obamacare,” the dismissive label coined by Republican foes.
“The people who stand to benefit the most are the least aware of the changes that are coming,” said Rachel Klein, executive director of Enroll America, a nonprofit that’s trying to generate enthusiasm.
“My biggest fear is that we get to Oct. 1 and people haven’t heard there is help coming, and they won’t benefit from it as soon as they can,” she said.