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Insurance subsidies available for some health plans bought outside of exchange

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Several states have experienced technical problems with their health insurance exchanges, forcing residents to purchase policies outside of the exchange. A policy change, announced Feb. 27 by the Centers for Medicare and Medicaid Services (CMS), will allow these residents to retroactively receive the premium tax credits and cost-sharing reductions available to those who purchase health insurance through an exchange.

While the Federally run Healthcare.gov website has been working well since December, when teams of IT experts descended on Washington to fix the website’s bugs, several state-run exchanges are experiencing problems. The Oregon health insurance exchange just got its website up and running last week; Maryland has continuing problems with its exchange and had to fire the contractor hired to fix the flawed Maryland Health Benefit Exchange.

Individuals who are enrolled in a health plan outside of an exchange after experiencing technical problems with the state website may reapply to determine eligibility for subsidies. The individual will be treated as if enrolled in a Marketplace health plan.

Prior to this change, Individuals had to enroll in a health plan offered on an exchange to be eligible for financial assistance with health insurance premiums.

The Affordable Care Act (ACA) offers tax credits for households with incomes between 138 and 400 percent of the Federal Poverty Level. Lower income households who purchase Silver level plans may also qualify for cost-sharing reductions, a reduction of the required co-payments, co-insurance and deductibles.

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