By Michelle Andrews
Mon, Dec 19 2011
The state health insurance marketplaces that opened Oct. 1 give consumers who are looking for coverage on the individual market a whole new way to shop for health plans. At the same time, health insurance brokers and insurers will also continue to sell plans directly to customers. Sorting out who’s selling what can be confusing. What's more, some brokers and insurers will not just sell policies that are outside the marketplaces. They may also offer marketplace plans and their customers may be eligible for subsidies for those marketplace plans. While shoppers can find good coverage going any of these routes, the plans and services offered may differ in important ways.
The Affordable Care Act has fundamentally changed the market for individual health insurance. In the past, insurers held nearly all the cards. In most states, they could turn applicants for coverage down if they had even minor pre-existing medical conditions. The plans that were offered typically failed to cover common conditions such as pregnancy, and insurers generally faced few restrictions on the premiums they charged.
Starting in January, the individual market - including policies sold on the marketplaces and outside them -- will become much more consumer-friendly and consistent. Insurers will no longer be allowed to deny coverage to people who are sick, and premiums will only be permitted to vary based on a few factors, including age, tobacco use, family size and where someone lives. Every individual plan will have to cover a set of 10 comprehensive "essential health benefits," including maternity and newborn care, hospitalization and prescription drugs, among other things.
Instead of myriad cost-sharing options, consumers will pick from four plan types: bronze plans will pay for 60 percent of medical expenses, silver plans will pay for 70 percent, gold plans 80 percent and platinum plans 90 percent. The maximum amount people will be on the hook for out-of-pocket will be capped at $6,350 for individuals and $12,700 for families.
Whether someone shops on the state marketplaces, also called exchanges, or outside them, these elements will be consistent among all plans starting in January. The major difference between plans sold only outside the marketplaces by brokers and insurers and those that have been vetted and approved by a state exchange is that only exchange plans will make health law subsidies available to people with incomes up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four in 2013). But while marketplaces will sell only exchange plans, some brokers and insurers will sell both subsidized exchange plans and standard, non-subsidized individual market plans.
Brokers help consumers drill down for detailed plan information about participating providers and covered benefits, among other things, says Susan Rider, an independent insurance broker with Gregory & Appel Insurance in Indianapolis.