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AARP Bulletin

The Affordable Care Act's Insurance Marketplace Opens for Business

Americans can now shop for health coverage in a new way. Here’s what you need to know

Woman handing over a health insurance card to a medical professional, Health Insurance Exchanges (Getty Images)

The ACA's insurance marketplace open enrollment period runs from Oct. 1, 2013, through March 31, 2014. Policies opened by Dec. 23, 2013, provide coverage beginning Jan. 1, 2014. — Getty Images

En español l About 7 million people are initially expected to buy health coverage through the Affordable Care Act marketplace in each state.

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On the website (which, depending on where you live, will be HealthCare.gov or your state's own marketplace site) insurance companies compete for customers, and it's easy to compare prices.

In the coming weeks and months you'll see the marketplace — also known as the exchange — touted, attacked and discussed. How will the insurance marketplace affect your coverage? Here's what you need to know right now.

1. Will I have to buy my health insurance through a marketplace?

No, if you have health coverage, you won't have to change a thing. You won't use the marketplace if you're among the 85 percent of Americans who get their insurance through an employer or through Medicare, Medicaid, TRICARE or the Veterans Administration, or get employer retiree health benefits.

You'll use it if you're among the 15 percent of Americans who are uninsured. You may also use the marketplace if you can't afford your employer's plan. Members of Congress and their staffs also will buy their health insurance through the site.

(Tip: If you now buy your own insurance from a private company, you can use the marketplace.)

2. What's the reason for the new marketplace?

Under the Affordable Care Act that President Obama signed into law in 2010, starting in 2014 most Americans and legal residents must have health insurance or pay a tax penalty.

To help the uninsured buy insurance, the law requires there be an online marketplace designed to serve as a one-stop shop where people can compare and buy health insurance coverage from a number of companies. Using the appropriate state or federal website, consumers also can find out whether they qualify for a tax credit to help pay for their insurance — up-front financial help to immediately lower the cost of premiums — or whether they qualify for Medicaid, the federal-state health program for low-income people.

(Tip: Nobody has to use the marketplace to buy health insurance. Individuals can still deal directly with insurance companies, but subsidies to help pay for insurance will be available only to those who purchase polices through the marketplace.)

3. I work for a contracting business that doesn't offer me or the rest of its 22 employees health insurance. Will the owners have to do so now?

No, small businesses with fewer than 50 full-time workers don't have to offer insurance. If your employer doesn't offer insurance, you will be able to shop for an individual policy on the marketplace, where you may qualify for help paying your premiums.

4. How much financial assistance can I get to help pay for insurance?

When you use the marketplace, you'll find out whether you qualify for help with your monthly premiums, out-of-pocket expenses or both, depending on your annual household income, age and other factors.

Individuals with income up to $45,960 and couples with income up to $62,040 in 2013 — slightly higher in 2014 — may qualify; for those who do, the new tax credits can be sent directly to the insurance company. Many older people qualify for higher subsidies than younger men and women because insurance companies can charge older people higher prices. But with the financial help offered, they will pay the same out-of-pocket for their premiums as younger people.

For example, take two individuals — one a 51-year-old sales associate, the other a 60-year-old musician. Each is a nonsmoker who makes $45,500 a year and doesn't have employer health insurance. Each will pay about $360 a month of his or her own money for insurance premiums for a silver plan, the middle-tier marketplace plan, which covers about 70 percent of health care costs.

Next page: Do you qualify for financial help in the marketplace? »

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