Despite the fact that the exchanges opened on Tuesday, most experts are suggesting that individuals wait at least a month before making a purchasing decision.  We certainly saw a lot of glitches with the exchanges especially here in Washington so it makes sense to wait awhile to cut down on your own frustration level and give the exchanges a chance to get things running smoothly.  You have six months to make a decision but having said that there’s nothing wrong with doing a bit of window shopping to see what’s available and to check price tags before making the decision.  That time will also allow you the time to ask questions and get familiar with your options.

Who’s covered/who’s not

There’s a penalty for not having insurance after March 31, 2014 but there is a lot of confusion about who is already covered and who isn’t.  Something that gets lost in all the stories and worries about the exchanges is that 85 percent of us are not affected by the health exchanges because we’re already covered through an employer or Medicare.  Here’s a glance at the individuals who either should not or can choose to not purchase insurance from the health exchange.

• Those individuals who are 65 and over do not need to go to the health exchange.  Medicare offers a much better premium price and better coverage.    The marketplace is primarily for individuals who are under 65.  You cannot use the Marketplace to buy a supplemental or dental plan.
• If your employer already offers medical insurance you are likely to find that your employer-sponsored coverage will likely be cheaper than comparable offerings on the exchanges depending upon what proportion of your premium your employer covers.  Those with job-based, employee-only coverage which is considered affordable (no more than 9.5 percent of annual household income) won’t qualify for government subsidies to buy coverage.
• Those individuals eligible for retiree-only coverage through a former employer can choose either that coverage or can choose to get coverage through the state exchange.  Only about 1 in 5 Americans work in companies that offer retiree health benefits and that share is dwindling quickly.
• Individuals that have private insurance through an individual insurance plan can continue with that plan but they may find that by purchasing through the health exchange that they have access to subsidies to offset some of the costs associated with insurance.  Individuals with incomes up to $45,960 and couples with incomes up to $62,040 in 2013 may qualify for subsidies.
• If you have COBRA insurance.  COBRA insurance is offered to laid off employees to cover their employer-covered health insurance for up to 18 months.  Former employees pay the full cost of the premium or benefit offered plus up to 2 percent in administrative costs.  It tends to be an expensive option.  Likely you will find that the marketplace offers better rates than COBRA.
• Military veterans who are covered through Veterans health care program, TRICARE, CHAMPVA or Spina bifida health care benefits programs are considered to be minimally covered under the health care law and do not need to purchase additional coverage.
• Children covered by CHIP (Children’s Health Insurance Program) won’t need to buy additional coverage.

Timing

For those who do need to purchase insurance you’ll have until Dec. 15 if you want coverage to begin on Jan. 1, 2014.  Open enrollment ends on March 31, 2014.  At that time, those who don’t have coverage will have to pay a penalty.  That fee will equal 1 percent of your yearly income maxing out at $95 a year, whichever is higher.  The fees get progressively higher the further along we are in on the plan so that in 2016 the fee grows to 2.5 percent per year or $695 per person, whichever is higher.  Those individuals unable to afford coverage, those who belong to an organized religious group with objections to health insurance or those who have been uninsured for less than three months will be exempt from the penalty.

Coverage

Pre-existing conditions such as diabetes or high blood pressure cannot be denied coverage nor be required to pay more for insurance even if you have been refused coverage in the past.  Nor can they be issued a policy that excludes coverage for their particular condition.  Nearly half of all Americans between the ages of 50 to 65 have a pre-existing condition that could have lead to denial of coverage in the past or to higher rates.  Those individuals can now get insurance and insurers can no longer raise prices for policyholder based on an illness or condition.  Insurers are allowed to charge more for older people, but less than what they charge now, for where they live, family size and they may charge smokers a 50 percent premium surcharge depending upon the state.

Make sure that you sign up for health insurance in your primary state of residence.  If you are a snowbird, some states offer wraparound networks that can be accessed when outside the primary network area.  A move is considered a qualifying event and is a time in which you may have to choose coverage outside of the open enrollment period.  Some experts believe that the marketplace will increase the mobility of early retirees and self-employed boomers and may lead to many boomers retiring early or starting their own businesses.

Individuals with chronic and terminal illnesses will no longer be subject to lifetime limits on health benefits.  The law will also restrict the use of annual coverage limitations.

Free preventive care

According to AARP, prior to the passage of the Affordable Care Act in 2010, only about half of U.S. adults received preventive health services such as screenings, consultations and prescriptions.  Beginning Jan 1, 2014, no matter how you pay for your insurance, more than 60 preventive tests and treatments will be required by the Affordable Care Act at no cost to you.  Here’s the list of preventive care services that are covered.

Prescription drug coverage gap

Between now and 2020 the Affordable Care Act will fill the coverage gap known as the donut hole so that by then you’ll pay only 25 percent for covered brand-name and generic drugs during the gap.  This link shows how those percentages will change over the next few years.

For more information on health coverage or to sign up for health benefits go to www.healthcare.gov.  If you do not want to use a computer or you do not have a computer, you can call 800-318-2596 or 1-855-923-4633).

For answers to other questions about the Affordable Care Act, please see AARP’s article on What You Need To Know.