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The 4Ws Of Marketplace Health Insurance
In this article we will discuss four major questions or in other words we will explain the 4 W’s of the health insurance marketplace. The knowledge that you will gain through this article will take you a long way in choosing the best health insurance plan that adheres to the provisions of the new Affordable Care Act aka Obamacare
The term Marketplace health insurance refers to any health insurance plan that has been obtained from one of the governmental health insurance exchanges. Such health insurance plans have one common attribute- they all adhere to a government established standard and also conform to the 10 essential benefits iterated in the Patient Protection and Affordable Care Act.
Every health insurance plan sold through government health insurance exchanges has a designation of gold, silver, platinum or bronze. The designation of a plan typically depends upon the services offered in the plan.
No matter what the designation of the plan is, all of them adhere to the 10 essential health benefits.
Why Purchase Marketplace Insurance?
The answer is pretty simple. Marketplace health insurance plans are backed by the government sponsored subsidies. These are actually indirect subsidies. You get them in the form of tax credits.
However, not everyone is eligible to receive the tax credits. The eligibility criterion for receiving tax credits is based on the annual household income. In order to be eligible for receiving the tax credits, your annual household income must not exceed than 400 percent of the federal poverty level.
The idea of tax credits finds its origins in the government’s vision that no American household should pay more than 9.5 percent of his/her annual income on medical insurance premiums.
You can also purchase a marketplace health insurance from independent insurers. However in this case you will be able to make a claim for the tax credits only at the time of filing tax returns. Contrary to this, if you buy a health insurance plan from a government health insurance exchange then you can deduct the amount directly from the monthly premiums.
Who is Eligible to Purchase Marketplace Insurance?
Any American citizen or an immigrant with a legal residence in the United States is eligible to purchase a health insurance plan through the federal exchanges. Small businesses with 50 or fewer employees are also eligible. Some restrictive conditions are that the person must not be above 65 years of age and he/she must not be a convicted felon.
What is the Penalty for not availing a Health Insurance Plan?
All able American citizens who can afford to buy a health insurance plan but choose not to do so will be penalized. The penalty is set at $95 per adult and $45 per child in the family. However if you have missed the open enrollment season due to a life changing event such as marriage or a loss of job then you can still obtain the health insurance even after the expiry of the deadline for obtaining a health insurance plan under the provisions of Affordable Care Act.