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10 things you don't know about health insurance marketplaces

You're in good company if you don't know much about the new health insurance marketplaces that will open this fall -- even a lot of doctors are in the dark.

A survey of almost 500 independent physicians this summer by LocumTenens.com, a physician staffing agency, found that more than half were "not at all familiar" with how the health plans sold through the marketplaces would impact their practices. Most didn't know what benefits would be offered in the marketplace plans or how the claims process would work.

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health insurance marketplaces are openingWith the marketplaces now open, it's time to figure this out.

You can find your state's marketplace by going to healthcare.gov.

If you get group health insurance through your employer, you probably won't interact with a health insurance marketplace. But if you need to buy health insurance on your own, or your employer is giving you money to go get your own plan, you need to know whether your state marketplace is the right choice.

The health insurance marketplaces are often called "exchanges," their original name in the Affordable Care Act.

Here are 10 things you probably didn't know about marketplaces, but should.

1. Open enrollment for 2014 runs for six months

You have from Oct. 1, 2013, through March 31, 2014, to buy a 2014 health plan through the marketplace. Bear in mind, though, the plan doesn't take effect on the day you purchase it, says Kelly Fristoe, owner of Financial Partners in Wichita Falls, Texas, and immediate past president of the Texas Association of Health Underwriters.

  • For a plan to take effect Jan. 1, you need to purchase it by Dec. 15.
  • If you buy a plan during the first 15 days of the month after the start of the year, the coverage takes effect the first day of the next month.
  • If you buy a plan after the 15th of the month, the coverage takes effect the month after the following month. Say, for instance, you buy a plan on Feb. 16. The coverage would take effect April 1, Fristoe says.

2. Your state will have a health insurance marketplace, even if your governor opposes health care reform

Sixteen states and the District of Columbia are setting up their own marketplaces, and each one is calling it something different. There's Covered California, Connect for Health Colorado and the Maryland Health Connection, to name a few. In 19 states, the federal government is setting up what are now called "federally facilitated marketplaces." In others, states and the federal government are partnering to operate the marketplaces.

3. There will be multiple ways to enroll and help will be available

You can apply for coverage through a health insurance marketplace online, by mail or in person, and there will be 24/7 online chat and telephone help available.

The online marketplaces will help you narrow down choices and compare plans side by side, says Christopher Neuharth, director of user experience at Connecture, a Milwaukee area-based software company that designed the online sales portions for marketplaces in Maryland, Minnesota and Washington, D.C.

The platform designed by Connecture guides users through a series of questions about what they want in a health plan and then shows plans that match those preferences. For instance, the program lets users fill in the names of their physicians if keeping their doctors is important, and shows plans that include those professionals in the provider networks.

4. You buy health plans from private insurers in the marketplaces

Fristoe says he runs into a lot of consumers who mistakenly assume the health plans offered through the marketplaces are government plans. They are not.

Although state and federal governments are setting up the marketplaces, the plans are sold and administered by private health insurance companies.

5. Four main types of plans will be sold

Health plans sold in the marketplaces will be standardized to make it easier to compare them. The four basic types will vary according to how much of your health care costs the insurer pays and how much you pay out of pocket. Here are the four types:

  • Bronze - The insurer pays 60 percent of the costs. You pay 40 percent.
  • Silver - The insurer pays 70 percent. You pay 30 percent.
  • Gold - The insurer pays 80 percent. You pay 20 percent.
  • Platinum - The insurer pays 90 percent. You pay 10 percent.

A variety of plans will be offered for each level. All the plans must offer the same core of "essential benefits," and none of the plans can deny you coverage or charge you more based on your health.

6. You have to shop in the health insurance marketplace if you want government help to save

If you don't have access to employer-sponsored health insurance, you'll qualify for premium discounts in the form of tax credits if you earn up to 400 percent of the federal poverty level -- that's $94,200 for a family of four in 2013. If you earn up to 250 percent of the federal poverty level you will be eligible for lower deductibles and copayments as well. You can get the savings help only on plans sold through the marketplaces.

If you're household income is low enough to qualify for Medicaid or the Children's Health Insurance Program, then you will be directed to apply for coverage through those government programs.

7. Dig out your tax return before applying

You'll need to provide information about your household income to apply for tax credits to save on health insurance. You'll also need the Social Security numbers of all the family members who will be covered on the plan.

8. You can browse as much as you want, but be prepared for sticker shock

"We expect people to do curiosity shopping in the first month or so," says Neuharth.

If you qualify for government premium discounts, you'll see the plans' discounted prices only after you apply for the tax credits. Before you apply, you'll see only full prices, he says.

9. You and your family can't qualify for discounts in the marketplace if you have access to "affordable" coverage at work

Employer-sponsored coverage is considered "affordable" if the worker pays no more than 9.5 percent of household income toward the coverage for him or herself. The amount you pay for your dependents to be covered on the employer-sponsored plan isn't considered, Fristoe says.

So even if a big chunk of your pay goes toward keeping your dependents on the employer plan, they're still not eligible for discounts in the marketplace if the portion you pay to cover yourself is deemed affordable and they have access to the employer plan.

10. You can also buy health insurance directly from insurers or through insurance agents

Health insurers will sell individual and family health plans outside the marketplaces. In fact, some major insurers aren't participating in the marketplaces, so the only way you can purchase their health plans is directly through them, an agent or a health insurance website.

To find an agent, Fristoe suggests using the National Association of Health Underwriters website's "find an agent" tool.

More from Barbara Marquand here

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