September 12, 2013

Applying for health insurance? Homework involved

Step-by-step instructions and tips about how to apply for the Affordable Care Act's new health insurance markets, which open for enrollment on Oct. 1.

RICARDO ALONSO-ZALDIVAR, Associated Press

(Continued from page 1)

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FILE - This April 30, 2013 file photo shows the short form for the new federal Affordable Care Act application in Washington. Getting covered through President Barack Obama's health care law might feel like a combination of doing your taxes and making a big purchase that requires some research. You'll need accurate income information for your household, plus some understanding of how health insurance works, so you can get the financial assistance you qualify for and pick a health plan that's right for your needs. (AP Photo/J. David Ake)

AP

If you're like most people, you'll be getting a tax credit to help pay your premiums. The credits are based on your income and keyed to the premium for a benchmark plan known as the "second-lowest cost silver plan" in your area.

With your tax credit, you can finally shop for insurance. Beware: you'll probably have to live with your decision until the next annual enrollment period.

You'll have up to four levels of coverage to consider: bronze, silver, gold and platinum. Plans at every "metal level" cover the same benefits and have a cap of $6,350 a year in out-of-pocket expenses for an individual, $12,700 for families.

Bronze plans generally have the lowest premiums, but cover only 60 percent of medical costs on average. Policyholders will pay the difference, up to the annual out of pocket cap. Platinum plans have the highest premiums, but cover 90 percent of costs. Young adults up to age 30 can pick a skinny "catastrophic" plan — but you can't use your tax credit on a catastrophic plan.

Tip — Make sure your doctors and hospitals are in the plan you pick. You may have to check the plan's own website, or call your doctor.

Tip — Your share of the premium could be lower — even zero — if you apply your tax credit to a bronze plan. It's because the credit is keyed to the cost of a silver plan, which is generally more expensive.

Tip — Check if you are eligible for "cost-sharing subsidies," in addition to your tax credit. Extra help with out-of-pocket costs is available to people with modest incomes. But only with a silver plan.

Head spinning?

Richard Onizuka, director of the Washington state market, says picking a plan could be the most difficult step. Most of his customers were previously uninsured, so insurance jargon could seem like a foreign language.

"The biggest challenge for consumers will be understanding health insurance and how to purchase it," he said.

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