If the individual mandate is the heart of the Affordable Care Act, the online marketplace for state health insurance exchanges is the brain assisting individuals in choosing health insurance plans to suit their needs and financial status.
By 2014, those who meet the criteria will need to buy health insurance according to the Affordable Care Act law. You can view if you qualify here. State exchanges are being created to assist in the selection of health insurance. Federal subsidies are available for low income people; therefore, health insurance exchanges can assist people in choosing the health insurance best suited to their needs and income level.
Levels of care
The four levels of coverage are based on “actuarial value.” Actuarial value is a measure of the level of protection a health insurance policy offers and indicates the percentage of health costs that, for an average population, would be covered by the health plan. The four levels provided in Affordable Care Act (ACA) are:
In other words, for a bronze plan, the health plan would cover 60% of the cost for an average population and enrollees (on average) would cover 40%. For a platinum plan, an average individual would pay 10% out of pocket for their covered benefits and the plan would pay 90%. Those with chronic illness requiring regular care or cancer patients would benefit from paying a little higher premium, but lower out of pocket cost.
States have the flexibility to determine the role of the exchange with respect to contracting with health plans. All exchanges are required to contract only with health plans that meet the minimum federal requirements for qualified health plans. States can choose to have the exchange contract with all qualified health plans, called a clearinghouse, or states can choose to have the exchange contract with selected health plans and/or negotiate premium prices with health plans.
States have the option of establishing the exchange as part of an existing state agency or office operated by the state, as an independent public agency, or as a non-profit entity. If states choose not to set up an exchange, the federal government will do it for them.
State exchanges will be an online marketplace for people to shop for private plans packaged with benefits and consumer protections like ensuring coverage for pre-existing conditions. Insurance companies will be competitive as they sell policies to individuals, families and small businesses. The concept is to shop and compare insurance policies and decide what the best fit is financially and for the level of wellness for you or your family. Those with pre-existing conditions should read and know the levels of care.
Why does it benefit states to set up their own exchanges?
The value of establishing state-based exchanges include:
• Maintaining regulatory authority over a large share of the commercial health insurance market;
• Mitigating risk selection that may result from different rating and underwriting rules for insurance policies sold inside and outside the exchange;
• Enabling greater coordination of benefits and eligibility rules across health coverage programs (e.g., Medicaid, CHIP and policies sold through the exchange); and
• Promoting state health reform strategies and priorities through the exchange.
In addition, there is no reason for the states to claim funding the exchanges will be a problem, as the federal government has made available money to establish exchanges.
As of July 1, 2012, this is how the state exchanges are proceeding.
Federal grant money awarded to build Affordable Insurance Exchanges
Tennessee: $9.1 million
Georgia: $1 million
Alabama: $9.6 million
ACROSS THE NATION
• 15 states have established state exchanges
• 1 state planning for partnership exchange
• 18 states studying options, including Tennessee and Alabama
14 states with no significant activity, including Georgia
• 3 states decided not to create state exchanges
Source: The Henry J. Kaiser Family Foundation
Playing politics with state health insurance exchanges
Some states’ governors have refused to set up exchanges, playing politics with the health care of their citizens. If states refuse, the federal government will step in to do it as shown and will supply federal funding.
An article in Atlantic online reported that Louisiana Gov. Bobby Jindal declared last week after the Supreme Court ruling, "Absolutely, we're not implementing the exchanges. We're not implementing ObamaCare." Wisconsin Gov. Scott Walker's reaction to the ruling was essentially the same thing: "Wisconsin will not take any action to implement ObamaCare." And Sen. Jim DeMint of South Carolina has called on "every governor to stop implementing the health care exchanges." Some said the pledges hint of the "nullification crisis" when South Carolina defied President and a federal tariff. States can opt out of Medicaid expansion, but there is not much that Jindal and Walker can do to prevent health insurance exchanges from being set up in their states.
In order to make a statement politically, Republican governors are giving up regulatory authority of the exchanges and ignoring their ability to promote health reform strategies and priorities unique to their state’s citizens.
States have until November 16, 2012, to decide if they want to set up an exchange, so Democrats can prepare for more rhetoric from Republicans. On the other hand, Democrats can use Republican states’ inaction to declare this is more of the same from the “party of no.”
Interactive map of the U.S. to view your state’s progress here.
The next article on the ACA will focus on how the Affordable Care Act complements Public Health.
Previous articles on the Affordable Care Act:
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