For many individuals and some small business owners, the Supreme Court upholding the Patient Protection and Affordable Care Act means you will be looking into securing your health insurance through a health insurance exchange set up in your state.
If your state opts out of setting up its own exchange, you will be able to utilize a multistate exchange. Multi-state exchanges will be operated by the Department of Health and Human Services.
What is a Health Insurance Exchange? A HIX (Health Insurance Exchange) is a state based competitive market for consumers to purchase private health insurance from companies licensed by the state. The Exchange will regulate the insures to make sure coverage complies with the laws mandated by the Affordable Care Act, and offers affordable rates for individuals as well as qualified small businesses. The state requires that plans are easy to read and compare, ensuring purchasers can choose based on their needs.
Individuals whose insurance would cost less than 8% of their income are mandated to buy their own healthcare and are eligible to join a HIX. HIX aggregates small businesses along with the eligible individuals. The sheer numbers of participants allows for insures to offer plans with premiums that before could only be provided to large-scale purchasers like large businesses. If you are an employer with fewer than 100 employees, you will be allowed to participate in a HIX starting in 2014. This means your premiums and choices of plans are comparable to plans offered to multimillion-dollar national companies. Depending upon the size of your small company, you may be eligible for a tax credit. For instance, a small business with 25 or fewer employees earning under on average of 50 thousand dollars or less will get a tax credit for up to 35% of the cost of your insurance plan.
You may be asking, “How is this going to affect my cost?” “Will I still be able to get cheap health insurance?” The answer is yes and no. Estimates from the Congressional Budget Office (CBO) show the cost of healthcare rising approximately 5.7% a year for the next 10 years. Nevertheless, the CBO says that prediction is lower than if the Affordable Care Act did not pass. It breaks down this way. Individual premiums will rise a little bit, large companies will see a minimal drop in their premiums, and small business will remain at the same relative rate of change.