NORMAN — Dear Savvy Senior, What can you tell me about the new Affordable Care Act health insurance exchanges that begin next year? I am interested in retiring early at age 61 but need to find some affordable health until my Medicare benefits begin at 65.
— Ready to Retire
The new health insurance exchanges — also known as Health Insurance Marketplaces — that begin in 2014 will be a welcome benefit to millions of Americans who need health insurance, especially uninsured baby boomers and pre-Medicare retirees who often have a difficult time finding affordable coverage.
How it will work: As part of the Affordable Care Act, starting Oct. 1 you will be able to shop and compare health insurance policies in your area and enroll in one directly through your state’s Health Insurance Marketplace website. The policies will go into effect on Jan. 1, 2014.
You’ll also be happy to know that federal law dictates that Marketplace insurers cannot deny you coverage or charge you higher rates based on pre-existing health conditions, and they can’t charge women more than men. But, they can charge older customers more than younger ones — up to three times more.
Every state will have a Marketplace, but each state can choose how it will operate. Seventeen states and the District of Columbia will run their own state-based Marketplace, seven states will partner with the federal government, and 26 states will offer federal Marketplaces. The differences between federal and state programs will be subtle. You will be able to access your state’s Health Insurance Marketplace at healthcare.gov.
The policies available through these Marketplaces will be sold by insurance companies and will provide a package of 10 essential benefits, including emergency services, hospital care, lab services, prescription drugs, doctor visits, preventive care and rehab services.
To make shopping and comparing a little easier, the health plans will be divided into four different levels — bronze, silver, gold and platinum — each offering similar benefits but with a different cost structure. The bronze plan will have the lowest monthly premiums but have highest out-of-pocket costs, while the platinum plans will have the highest premiums but the lowest deductibles and co-payments.