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Your Finance: Navigating health insurance exchanges


Obamacare. Credit: iStock

Here comes the day the Obamacare enthusiasts have been waiting for and the haters have dreaded: The state health insurance exchanges mandated by the Affordable Care Act open for business on Tuesday, Oct. 1.

Finally, Americans will start to see their health insurance options for 2014. You can shop through the end of this year for coverage that kicks in on Jan. 1.

Here's how to shop for coverage:

Study all your choices. With the addition of public exchanges, there will be three ways to find insurance: from an employer, by buying it from a public exchange or through a private exchange, usually run by an insurance brokerage, such as or

For most people who can get coverage at work, that will be their best choice because it will be subsidized by their employer. But if your employer won't subsidize coverage for your spouse, partner or kids, you might find a better deal on one of the public exchanges, where you can get coverage that meets federal guidelines that will limit your out-of-pocket costs.

The private exchanges will offer a third tier of coverage: Some plans will be cheaper and have higher out-of-pocket costs than those offered on public exchanges. Others may provide consumers with a wider network of in-plan physicians and hospitals than they will find on the exchanges. But the plans won't always have to hew to the same federal limits on deductibles, co-pays and cost sharing, so pay attention to the small print.

Determine whether you'll qualify for a federal subsidy. If your employer provides comprehensive coverage that costs you more than 9.5 percent of your annual income, you'll qualify for subsidies on your premiums if your household brings in less than 400 percent of the federal poverty level for its size.

Decide whether to split your family's coverage. There's a trap hidden in the subsidy rules: If your employer provides affordable coverage for you, nobody in your family is eligible for subsidized coverage on the exchanges, even if your finances would otherwise qualify the whole household and even if you opt out of your employer's plan to shop with the rest of the family.

You may decide to shop on the public and private exchanges for your spouse or domestic partner and kids separately to find the coverage for them that would be best and most affordable.

Emancipate your young adult. Your 20-something child can be included in your health insurance plan until he is 26 -- but he may find a lower-cost and subsidized plan on his own if he is a low earner and doesn't live in your household.

Call your doctor. You'll want to make sure your favorite physicians and hospitals participate in the plan you choose, lest the higher costs you'll face for going out of plan blow your budget.

If you regularly travel to a different state, check to see that your policy covers your care there as well.




  • Relax. In a post-Obamacare world, no insurer can reject you or charge you more for pre-existing medical conditions. So you won't be locked into any plan for life, as you might have been had you developed a chronic condition after signing up for health insurance. That means if you go through all these steps and still feel like you chose the wrong plan, the damage is limited -- you can do all this again next year, for 2015.



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