When the Affordable Care Act goes into effect in 2014 and all Americans are required to have heath insurance, they will have a variety of plans to choose from. California residents will be able to purchase plans on the Exchange (www.coveredca.com) and off the Exchange directly from the insurance company. Taking the time to review your options is critical to making the decision that’s right for you and your family. Here’s what you need to know about on-Exchange and off-Exchange plans.
On-Exchange or Coveredca Plans
These plans will be available on and off the Exchange. They will have the same price and provide the same benefits whether you buy them through Coveredca or the insurance carrier. Here are the advantages and disadvantages to buying a plan on the Exchange:
- Subsidies. To receive a subsidy from the government, you must purchase a plan through coveredca.com. If you are eligible for a subsidy or think your income may drop, qualifying you for a subsidy, it makes sense for you to purchase your plan from the Exchange. If you buy insurance off the Exchange, you must wait until the next open enrollment period to buy a plan on the exchange, even if you qualify for a subsidy before open enrollment begins.
- Selection. To offer the lower premiums required by the Affordable Care Act, insurance companies will be paying doctors less for the care they provide. It’s believed that higher quality doctors who charge more will no longer accept many of these plans, forcing individuals to see high-volume doctors who charge less.
- Prescriptions. By law every insurance carrier must cover a minimum of one drug in each USP category and/or class. To cut costs, insurance companies are expected to reduce the number of prescriptions they cover in each category. If the drug that works best for you is not covered, you will be required to pay out of pocket to get it.
Off-Exchange or Direct With Carrier Plans
When you purchase a plan off the Exchange, you work directly with the insurance company. Carriers want to attract buyers in this market as much as possible. It is the non-subsidized and business customers that will allow carriers to offer subsidized health insurance plans. Because of this they are willing to provide more benefits to customers in this market, including:
- Price. Since people who purchase plans off the Exchange can’t receive subsidies, they have more options when it comes to selecting a health insurance plan. As a result, carriers will have to compete for business outside of the Exchange. This is expected to drive down insurance costs for consumers.
- Selection. Off-exchange plans will pay doctors more for the services they provide, so more doctors will be willing to accept them.
- Prescriptions. Plans purchased directly from the carrier will cover more prescription drugs than on-Exchange plans.
River City Benefits can quote both on-Exchange and off-Exchange plans. We receive the same commission whether you choose a plan from Coveredca or the carrier, so there’s no financial advantage for us regardless of which plan you select.