Are you looking for health insurance coverage for you and your family? Or are you a small business owner looking for affordable health insurance for you and your employees? If you’ve answered “yes” to any of these questions, you may have heard of state health insurance. A federal or state exchange plan for insurance isn’t just about choosing an individual or family health insurance plan. these exchanges are often the only way many people receive health insurance based on their income or lack of it.
so how do state based plans work? are they subsidized by the federal government and how are they purchased? Here’s what you need to know about state health insurance.
Reading: What is a state insurance exchange
what is a health insurance exchange?
so what is a state exchange plan? The health insurance exchange or marketplace is a centralized portal where people can compare and purchase health insurance coverage. some states have their own marketplace platforms and fully run them. other states use the platforms run by the federal government. These portals give you access to health insurance plans of all kinds from a variety of insurers.
who can use the health insurance exchange?
The health insurance marketplace created by the Affordable Care Act is open to all United States citizens and other legal residents of the United States. two important exceptions include people who are incarcerated and people with medicare. Some small businesses can also use the marketplace to purchase health insurance and supplemental insurance coverage.
Sometimes you may need to supplement Marketplace insurance with other forms of coverage for specific needs.
what is a state exchange plan?
State health insurance is sold through state health insurance exchanges. A state health insurance exchange is an insurance marketplace where the state provides the infrastructure, website, and customer support for individuals and small businesses to purchase state plans.
When President Obama signed the Affordable Care Act into law in 2010, states were allowed to choose whether or not to establish their own state health insurance exchanges. some states already had their own state health insurance exchanges, so they could decide if they wanted to continue operating. In states that have chosen not to form their own health insurance exchanges and offer state-based plans, people can get insurance through the federal exchange. There are also other options for buying health insurance in the individual market, such as getting a plan directly through the insurance company or buying it through a private broker like eHealth, where you can see hundreds of plans from various companies.
All states have major medical plans that are not sold on the state marketplace, so be sure to check out this type of “state-based” health insurance when shopping online. States that offer their own health insurance can determine which insurers can offer state-based plans through their exchanges.
In some states, all insurers can participate. in others, they have to meet certain coverage or rate requirements. in others, states prioritize insurers whose plans offer benefits that align with the state’s overall health needs. For example, if a state has a high rate of obesity, it might select insurers that offer coverage focused on obesity treatments.
actually, there is no state health insurance
If you hear someone refer to state insurance, they are most likely referring to a health insurance plan regulated by that state’s insurance department. That doesn’t mean you can only use the insurance in that state. state, and it doesn’t mean you have to buy it at the state exchange. it simply means that it was approved as an insurance product in that state, for residents of that state. you can’t buy it if you live in another state. To truly understand health insurance, you must first understand that there are several different types of coverage you can purchase.
The first is insurance for major medical expenses. Major health insurance is usually the most comprehensive coverage you can buy, and it’s also usually the most expensive. All major health insurance plans offered in a state have been approved by that state’s insurance department (with a few minor exceptions). That means if you don’t live in that state, you can’t join that plan. There are three distinct features of major health insurance:
- guaranteed to be offered to anyone, regardless of health status, as long as they apply for coverage during an open enrollment period.
- has to cover 10 essential health benefits required by the Affordable Care Act, including things like maternity care, mental health and substance abuse coverage
- A person cannot be charged more for coverage based on their health history.
- district of colombia
- new mexico
- new york
- rhode island
- bronze: you pay 40 percent; the insurer pays 60 percent.
- silver: you pay 30 percent; the insurer pays 70 percent.
- gold: you pay 20 percent; the insurer pays 80 percent.
- platinum: you pay 10 percent; the insurer pays 90 percent.
Short-term health insurance exists to fill the gap when you’re waiting for open enrollment periods or waiting for your coverage to start. if there is an amount of time when you don’t have insurance but expect to have health care insurance again soon, then short-term health insurance will cover you in the meantime.
Indemnity health insurance or fee-for-service health care plans will pay a flat rate for your health care services. if that fee doesn’t cover the amount of the service, you’ll have to pay the rest out of pocket. some forms of these plans count as major health insurance, but not always.
These types of plans can also work as a supplement to your regular health insurance, especially when used for a specific purpose. however, an indemnity health care plan does not comply with the aca. you will not receive any of the benefits associated with using government exchanges.
states with their own state health insurance marketplaces
So, exactly how many states have their own health insurance exchange?
Currently, there are 15 states with their own markets. Some of these marketplaces offer plans for individuals as well as small business owners and employees. Others have marketplaces that are just for small business owners and employees. In these states, people cannot purchase state health insurance and must instead visit healthcare.gov. But in all states, people still have the option to buy from private marketplaces, such as brokers like eHealth, or directly from a health insurance company. Below are the states with their own state insurance marketplaces:
how federal subsidies work with state plans
Although many people believe that state plans are only available to people with low incomes, the truth is that they actually benefit a large part of the middle class. The reason for this is that federal subsidies in state health insurance plans apply to people within certain income levels. If you earn between 133 percent and 400 percent of the federal poverty level, then you qualify for state health insurance backed by the federal government. That means your monthly premiums for your state-based health insurance plan will be lower depending on the amount of subsidy you qualify for.
In 2017, the federal poverty guidelines were as follows:
Federal subsidies in state health insurance are often called “tax credits” because they are automatically added to your tax refund. however, they are applied at the beginning of the tax period to reduce your state plan premiums based on your estimated income for the year. If you earn more or less than you estimated, your subsidy is adjusted accordingly when you file your taxes.
Be careful not to guess your income when applying for health insurance. If you’re estimating your income and you underestimate to get a larger tax credit, you’ll likely end up owing money once tax season hits.
how do you buy health insurance on state health insurance exchanges?
If you want to buy insurance on a state health insurance exchange, the process is relatively simple. When you go to the appropriate state health insurance website, you will be asked to enter an individual’s information to determine if they qualify for a federally supported state health insurance plan. (note: you can also go to healthcare.gov, which will redirect you to the marketplace for your state). if you qualify, you will be presented with the health insurance plans for which you qualify. You will see that the plans are divided into four categories. These categories represent how you and the insurer will split medical costs:
Of course, the category that’s right for you will depend on your specific needs. You’ll be able to review health insurance plans and the specific coverage options they offer before selecting one. And don’t worry if you find it confusing – most marketplaces provide additional phone support should you need additional help understanding the various options.
benefits of buying insurance through the health insurance exchange
Because plans on the market must meet criteria set by the aca, there are several things that come with them as standard, like essential health benefits.
All plans have some free services, like preventive care. many will offer additional benefits like prescription discounts and other health-related programs. a prime example of this is the plethora of women’s preventive care services available.
When you buy insurance through the health insurance exchange, it’s also possible to find a great health insurance provider with plenty of additional coverage options. This may include things you just won’t see with some non-ACA providers, such as a greater focus on mental health and some alternative medicine practices.
The main benefit of the marketplace comes from the fact that it subsidizes and reduces costs based on your income. in this way, it works much like typical employer-provided health insurance works.
what to do if you don’t want state health insurance
You don’t have to use a government or state exchange to get health insurance. The biggest drawback to choosing a plan outside of the Marketplace is the loss of benefits associated with those plans. however, depending on your specific situation, those benefits may not even apply to you or you may have a health care situation that does not require them.
You may see a state exchange plan as just one option among many. you may even find it beneficial to mix and match state or government plans with other supplemental coverage to round out your health insurance policy.
In ehealth, you can search for plans from numerous providers by state and even zip code. use the site and the experts to determine if state exchange plan insurance or any other type of health insurance plan is right for you.