Understanding Obamacare

Tune in all this week for our User's Guide to Obamacare special coverage starting 6pmET. What can you expect when the Obamacare insurance exchanges open this week? No doubt, a lot of confusion. Understand that the entire system is a work-in-progress that may or may not be ready for primetime when the starting gates open Tuesday.

Here's what you need to know:

-- Exchanges will be different state to state. If you have an elderly relative living in a different part of the country, you'll have to get your arms around the offerings in their state, and it could be far different from the one where you live. Different insurers are participating in each market. While Washington's Health and Human Services Department says the average number of plans per state is 53, averages mislead. The number of plans available ranges from just six to 169. What's more, don't expect to see the big brand name insurers you've come to know in these new marketplaces. They are more likely to be dominated by smaller, lesser known rivals.

--Costs will vary, too. While the White House says the average premium consumers will pay is $328 a month or $3936 a year, that is unlikely what you’ll pay. Variation in prices is big and depends on where you live, how old you are and whether you receive subsidies from the government. In Albuquerque, NM, for example, a 27-year-old non-smoking man would pay $126 a month for a bronze plan, but in Little Rock, Ark., the cost for the same type policy would be $190 a month. If you are already in the individual market, you may be better off staying put. According to Tom Miller of the American Enterprise Institute, average annual premiums in the individual market at $2,580 a year, are currently far less expensive than the $3,936 average cited by the administration on the exchanges.

--The law requires some similarities. Exchange health plans are required to offer what the government calls "essential health benefits." That includes an extensive list of services from emergency room services to care for pregnant women, new mothers and infants. Outpatient and rehab services, counseling, and therapy are also on the list, as are preventative care and prescription drugs. Insurers will package these offerings at five different prices, depending on how much you’re willing to pay in premiums. The most expensive will be called platinum coverage which will pay 90 percent of costs and carry the highest monthly premium. Gold coverage will pay 80 percent of your costs and will cost more than silver coverage which pays 70 percent of costs. Bronze has the lowest monthly premiums but only pays 60 percent of costs. You'll also see policies for a bare-bones "catastrophic" coverage. These policies are designed for young people and those who can't afford the policies I just described. Coverage will be cheaper and include three annual primary care visits and preventative services, but deductibles will be high. To qualify, you have to be under 30 years of age or get a "hardship exemption."

--Watch out for glitches and errors. Up to the last minute, exchange operators were struggling with software which sometimes failed to price the insurance correctly. Some exchanges were pricing policies incorrectly, others were calculating subsidies wrong. In other words, it is likely to be tough going in the initial weeks and possibly months as the government attempts a near impossible technological feat of linking the major bureaucracies of Medicare, Medicaid and CHIPS with state exchanges.

If you want to find the exchange in your state, check out www.healthcare.gov.