Health Insurance Marketplaces
The ACA requires the establishment of health insurance marketplaces (formerly known as exchanges) for individuals to purchase private health insurance. They are intended for individuals without access to affordable employer-provided health insurance or public health insurance programs. The marketplaces will be run by the federal government if the state chooses not to establish a marketplace. As of May, 2013:
- 27 states will have a federally run marketplaces
- 17 states will run their own marketplaces
- 7 will run their marketplaces in partnership with the federal government
How do consumers sign up for a health insurance plan?
Individuals can go to www.healthcare.gov to access information about the marketplaces in their state and to enroll in federally run marketplaces. The ACA created a streamlined application process to make enrolling easier. It also required a glossary of health insurance terms and sample summary of benefits to make sure that the plans are using common terms and to make it easier to compare plans. There is also a 24 hour help line (1-800-318-2596) to answer questions and help people enroll.
What is the marketplace timeline?
- October 1, 2013 - Enrollment begins
- January 1, 2014 - Coverage begins
- March 31, 2014 - Initial open enrollment ends
What types of private health insurance coverage will be provided?
The ACA requires that plans sold in the marketplace be similar to typical employer plans. HHS has implemented this provision by requiring states to choose an existing plan as a benchmark plan. States are given significant flexibility to pick from several different types of plans to be the benchmark. Once a state selects the plan to be their benchmark, the state will check to make sure it covers the 10 categories of health care services known as the essential health benefits. HHS did not define the benefit categories or provide guidance on what would be adequate coverage. This leaves much room for state flexibility and insurance company discretion.
What are the 10 categories of health services (known as the essential benefits) that each plan sold in the exchange must provide?
- Emergency services,
- Ambulatory (i.e. outpatient) services
- Prescription drugs
- Laboratory services
- Rehabilitative and habilitative services and devices
- Mental health and substance abuse disorder services including, behavioral health treatment
- Preventative and wellness services and chronic disease management
- Pediatric services, including dental and vision care
- Maternity and newborn care
Will all the plans provide the same level of insurance coverage?
Plans that offer essential benefits can offer varying levels of coverage and plan design. There will be four levels of plan coverage. The percentages below refers to the average amount the insurance plan will pay for covered services. It does not mean that the insurance company will charge the person 40% of the cost of every service in a bronze plan. It is an average measure of the cost-sharing required. The more the plan pays, the more generous the benefit. More generous plans may mean higher monthly premiums. However, people with many health needs may want to purchase more generous coverage to limit their out of pocket costs.
- A bronze plan will pay for 60% of the cost of covered benefits
- A silver plan will pay for 70% of the cost of covered benefits
- A gold plan will pay for 80% of the cost of covered benefits
- A platinum plan will pay for 90% of the cost of covered benefits
What must the marketplaces do?
The newly formed marketplaces must:
- Certify qualified health plans, provide required information and assistance to consumers, and determine eligibility for federal premium credits and cost-sharing reductions;
- Operate a risk adjustment system and implement the requirement that issuers calculate risk across all of their health plans inside and outside an exchange;
- Implement insurance market reforms;
- Build capacity at the state level to enforce the new requirements;
- Ensure non-discrimination;
- Establish consumer education campaigns;
- Expand technical capabilities and create accessible electronic information systems; and
- Create a seamless eligibility and enrollment systems.
Will the coverage be affordable?
There are subsidies for low and moderate income individuals and limits on out of pocket expenses for covered benefits.(link to the updated premium tax credit page) the Individuals and families with incomes between 100 – 400% of the federal poverty level are eligible for subsidies IF they are not covered by Medicaid, Medicare, VA, Tricare and employer sponsored health insurance. Specifically all group plans must limit out of pocket expenses for covered benefits, using the same out of pocket limits that apply to high deductible plans that are used with Health Savings Accounts ($5,950 for an individual and $11,900 for family coverage in 2010). In the small group market, they must limit deductibles to $2,000 for individuals and $4,000 for families in 2014. After that, these limits will be updated each year as average premiums increase.
How do employers participate in exchanges?
Participation is open to small employers/non-profits (100 employees or less OR 50 employees or less if the state defines them this way). Participation is also open to large employers at each state's discretion starting in 2017. Non-profits are also eligible to participate in the Small Business Health Options Program Exchange.
Are their protections for people with disabilities?
The law requires that HHS will:
- Ensure that benefits are balanced among essential health benefit categories (see above list); and
- Establish that benefits are not denied based on individuals’ “present or predicted disability, degree of medical dependency, quality of life, age or expected length of life.”