Health insurance exchanges have completely changed how many people view the process of purchasing insurance packages. These tools are more accessible for small businesses and individuals, helping ensure everyone has access to affordable and quality coverage for their healthcare needs. However, it’s crucial that brokers still know how to walk their clients through the process of choosing health insurance. Here, we’ll discuss what health insurance exchanges are and how they work.
Health Insurance Exchange Basics
The Patient Protection and Affordable Care Act (ACA), commonly called “Obamacare,” introduced health insurance exchanges in 2014. Health insurance exchanges serve as online marketplaces for individuals to compare and purchase health insurance plans. This allows them to shop for health insurance plans that match their specific income, location, and health needs. Health insurance exchanges enable individuals to benefit from increased competition among insurance plans and obtain affordable health insurance coverage.
The healthcare exchange operates year-round and serves as a centralized marketplace for individuals looking for health insurance coverage. Every state has either a federally run exchange or a state-run exchange that enables individuals to enroll in health insurance plans during an open enrollment period. This time usually begins on November 1st and ends on December 15th. State governments establish and maintain state-run exchanges, while the federal government manages federally facilitated exchanges for states that chose not to create their own. Regardless of which type of exchange is applicable to your area, all the health plans offered for sale are the same.
The Benefits of Health Insurance Exchanges
Health insurance exchanges can be an incredibly valuable tool for many people. Still, this option can go overlooked if you don’t inform your clients of its advantages. These are some noteworthy benefits of health insurance exchanges and reasons why they’re worth considering for your clients.
More Coverage Options
Health insurance exchanges provide a variety of options for individuals and businesses to choose from. Depending on the state, the number of insurers and plans available can range from a few to over 100. This helps insurance brokers find a plan that fits a client’s unique healthcare needs and budget. Additionally, health insurance exchanges offer transparency in pricing and coverage, making it easier for individuals and businesses to compare plans and choose the option that works best for them.
Health insurance exchanges have helped increase competition among insurers, resulting in lower prices for individuals and businesses. Under the ACA, insurance companies must provide coverage at a minimum level of benefits. This means that even the most basic plans must cover essential health benefits, such as preventive care, prescription drugs, and hospitalization. The exchanges also offer tax credits and subsidies to help lower the cost of premiums for those who qualify.
Before the ACA, individuals and businesses who wanted to purchase health insurance had to go through a lengthy and confusing process. With health insurance exchanges, the enrollment process is simple and streamlined. Clients can compare plans and enroll online, over the phone, or in person with the help of a licensed insurance broker.
Under the ACA, insurance companies cannot deny coverage to individuals with pre-existing conditions or charge them higher premiums. As such, those who were previously unable to obtain health insurance due to a pre-existing condition can now secure coverage through a health insurance exchange.
How Health Insurance Exchanges Work
Now that you know what a health insurance exchange is, it’s time to dive into the specifics of how they work. When an individual applies for coverage through the health insurance exchange, they’re asked to provide personal information such as their income level, employment status, age, and zip code. The exchange will determine whether the individual qualifies for a subsidy based on this information.
Generally, these subsidies are available to those with household incomes between 100–400 percent of the Federal Poverty Level. The amount of subsidy a person may receive will depend on their income and other financial factors. This can be a great benefit for individuals who may not have been able to afford health insurance in the past.
Health insurance exchanges offer a variety of plans that vary in coverage and price. These plans include Bronze, Silver, Gold, and Platinum plans. Bronze plans are the least expensive, with the lowest monthly premiums and highest out-of-pocket costs. Silver plans offer a balance between affordability and coverage, with moderate premiums and out-of-pocket costs. Gold plans have higher premiums but lower out-of-pocket costs, while Platinum plans offer the highest level of coverage with the highest premiums.
It's important to note that not all health insurance plans are available on the exchange. Insurance companies can choose whether to offer their plans on this platform, and some may choose not to. However, those that do post their offerings must propose at least one silver-level plan. Additionally, all plans must cover the same essential health benefits, such as prescription drugs and maternity care.
How To Navigate Health Insurance Exchange Enrollment
Though health insurance exchanges go the extra mile to make health insurance enrollment easy, it’s still important that you know how to support your clients through the process. Here are the important steps to follow when helping customers navigate the system.
Step 1: Create an Account and Verify Identity
The first step to enrolling in a health insurance exchange is creating an account. Clients will need to provide some basic information, such as their name, address, phone number, email address, and social security number. Once they create the account, clients will receive an email confirmation that allows them to verify their identity.
Step 2: Shop and Compare Plans
The next step is to compare available plans. Clients can use the online tools available via the exchange website to compare plans based on benefits, coverage area, cost, and other factors. This step is crucial, as clients need to determine which plans will provide the appropriate coverage and fit their budget. You can also provide your own professional insight here to ensure clients are on the right track.
Step 3: Enroll in a Plan
After finding a suitable match, clients must select a plan and enroll. Clients will need to have some basic information handy, such as their income, tax filing status, and household size. They’ll also need to provide payment information, such as a credit card or bank account number, for the first month's premium. Clients will receive email confirmation and other information about their plan.
Step 4: Activate Coverage
Even after enrollment, clients will need to take one additional step before activating their coverage. They must make their first premium payment to the health insurance company. This payment confirms their enrollment and officially begins their coverage.
Understanding all you can about health insurance exchanges will be vital in providing your clients with the best possible support. Warner Pacific aims to be a great resource to help you with each step of the process. Working with us gives you access to a series of small group medical plans through our premium partners. We also offer expert training and support for all aspects of enrollment, should you need it.