Health Insurance Exchanges
The ACA requires the establishment of health insurance exchanges which are a market place where individuals and small businesses can purchase insurance. Exchanges become effective in 2014. They are intended for individuals with no employer-provided or unaffordable employer-provided coverage. Each state has flexibility on how they establish the exchanges. States can decide to run regional exchanges or can let the federal government run the exchange in their state.
What essential benefits must the exchanges provide?
- Hospitalization, emergency services, ambulatory (i.e. outpatient) services
- Prescription drugs and 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
What are the levels of coverage?
Plans that offer essential benefits can offer varying levels of coverage:
- A bronze plan will pay for 60% of the cost of covered benefits
- A silver plan will pay for 70%
- A gold plan will pay for 80%
- A platinum plan will pay for 90%
What must the exchanges do?
- 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 income individuals and limits on out of pocket expenses for covered benefits. Individuals and families with incomes between 133 – 400% of the federal poverty level are eligible for subsidies IF they are not covered by Medicaid, Medicare, VA, Tricare and ESI. 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 a family 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 tosmall employers/non-profits (100 employees or less OR 50 employees or less if the state defines them this way). Participation is also open tolarge employers at each state's discretion starting in 2017. Non profits are also eligible to participate in the Small Business Health Options Program Exchange.
What is the state role?
Health insurance exchanges can be state based. There will also be Multi-state Exchanges run by HHS for states that choose not to operate their own Exchange. The Office of Personnel Management (OPM) will contract with insurers to offer at least 2 multi-state plans in each Exchange. At least one must be offered by a non-profit entity (e.g. a co-op).
What is the federal role?
The HHS Secretary will:
- Ensure that benefits are balanced among categories (see above list)
- 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.”
- Develop uniform explanation of coverage documents and Standardized definitions including the following key terms: Rehabilitation and habilitative services and devices; Devices intended to include durable medical equipment; and Behavioral health treatment (intended to encompass autism treatments)