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Health insurance exchanges: CNBC explains

Thursday, 26 Sep 2013 | 1:12 PM ET
Tom Grill | Photographer's Choice| Getty Images

The Patient Protection and Affordable Care Act, commonly known as Obamacare, requires most Americans to obtain health insurance by 2014 or face a penalty—and millions of them will be buying that coverage from newly created places called health insurance exchanges.

Those government-run exchanges—also known as marketplaces—have been set up in all 50 states, plus the District of Columbia.

Their customers, who can begin shopping there in October, will primarily be people who don't get health coverage through their employer, Medicare or Medicaid.

People can enroll online, by mail, or in person with the help of people known as navigators. Those navigators are selected by the exchange to give you information about the available plans, help verify whether you are eligible for tax credits to offset the purchase price, and walk you through the enrollment process—but they can't recommend a specific plan for you.

(Read more: Obamacare: CNBC Explains)

Check this website—https://www.healthcare.gov/what-is-the-marketplace-in-my-state/—to see where you can enroll online.

Each exchange offer an array of competing insurance plans for sale at different price points. These plans are grouped together according to the name of a metal—platinum, gold, silver and bronze—reflecting their relative premium prices.

Generally speaking, the more expensive the plan premiums—the platinum and gold plans—the less you will pay in deductibles, co-pays and other out-of-pocket costs when you receive treatment. The cheaper the premiums—the silver and bronze plans—the higher the out-of-pocket costs will tend to be.

But all of the plans must cover the same level of benefits. And people will not have to pay annual out-of-pocket expenses in excess of $6,350 for individuals, and $12,700 for families.

(Read more: Insurers ready for Obamacare)

Many customers will check out the insurance options and enroll in a plan by being guided through a series of online screens that will resemble websites that sell plane tickets or hotel reservations.

Calculating a price

The actual prices for the plans will depend on where you live, family size, age, and whether you use tobacco. And the number of plans for sale will vary depending on the region of the state you live in—some areas will have many plans for sale, while others will have very few.

(Read more: 8 things to know about Obamacare)

Many people will be eligible for government subsidies that will reduce the cost of the insurance, sometimes dramatically. Those subsidies are available to people whose annual income is less than four times the federal poverty level—about $46,000 for individuals, and about $94,000 for a family of four.

The exchanges will have calculators that will determine your eligibility for subsidies.

State or federal?

The federal government is running, or running in partnership with states, 36 of the exchanges. The remainder are being run by the individual states.

(Read more: Red vs. Blue states in Obamacare exchanges)

The success of the exchanges will depend on getting as many people as possible to enroll—particularly young, healthy people who will pay premiums while being less likely to need the insurance's benefits. Because of that, many states, and the federal government, are conducting aggressive outreach efforts to direct people to the exchanges.

If not enough people enroll, or if there are too many people with health issues, premium prices on the exchanges could rise in coming years.

By CNBC.com's Dan Mangan. Follow him on Twitter @_DanMangan.

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