This year many people in Chicago think Christmas came early with the health insurance marketplace, AKA “Obamacare”. All across America, we have preconceived notion about what the “Obamacare” plans do. Most of them are false. What is the truth? Let’s pull the rabbit out of the hat and see.
I have heard statements that are made similar to the following:
“Isn’t Obamacare cheaper”
“I should be able to get it for free through Obamacare”
“Aren’t the Obamcare plans better coverage”
I can go on and on.
The truth is, there is no magic with this. None…
What is it then? All math and taxes.
What! Let me explain, so listen up…
“Obamacare” plans are about plan changes to meet the requirements of a “Qualifying Health Plan” and tax credits/government subsidy. When comparing plans both on the Marketplace (Obamacare) and off the marketplace, and when comparing the same plan, they are exactly the same. No difference except 3 things:
- If you qualify for a tax credit and exactly how much of a government subsidy. Then your “Retail Premium” will be reduced by the exact amount of the tax credit qualified for.
- If you do qualify for a tax credit, you may also qualify for a tax credit to reduce your out-of-pocket expenses on the Silver Plans. This will vary depending on the household income and filing status.
- There are a few plans off the Marketplace (Obamacare) that are not tax credit eligible and will not be available on the Marketplace, only outside of the Marketplace. The opposite is true as well. There are a few plans that are only available through the marketplace and are not available outside of the Marketplace.
It is important to keep in mind that the “Retail Premiums” for comparable plans on and off the marketplace are the exact same (when comparing all the same particulars). There are two reasons this is important:
- Once you get your official tax credit, the government subsidy reduces it from the retail premium. If you do not qualify for a tax credit, now or in the future, you have to pay the full retail premium to have the health insurance.
- One day you may not qualify for the health insurance tax credit and you will need to pay the full retail premium to maintain coverage.
The reality is there is no “magic” in Obamacare. It is simply math and taxes. There are no lower premiums available on the Marketplace unless you pick a lower level plan (more exposure to you) or receive any tax credit. There is the false hope that a magic wand is available on the Marketplace (Obamacare) and your premiums will instantly lower. This is simply not the case.
The Marketplace is nothing more than the controller for premium tax credit and cost sharing credits. The “Hub”, if you will, for getting dollars from the government to lower your cost for health insurance, assuming you qualify. Otherwise, they are no advantage to you, your family, or your business to go to the Marketplace for health insurance.