Health Policy 101: Insurance Exchanges
What are they?
The Affordable Care Act (ACA) mandates that states develop Affordable Insurance Exchanges that will allow small businesses (<100 employees) and individuals to review, compare, and shop for both private and public insurance plans The exchanges will also make it clear if the individual or business is eligible for a tax credit. The ultimate goal of this initiative is to provide easy to understand, comparative information that will make choosing a plan easier. Exchanges will also create an administrative mechanism for easier enrollment. Because insurance companies can no longer deny applicants with pre-existing conditions, the exchanges will hopefully help reform the insurance market and make it more effective, as well as allow for monitoring of marketing practices. Additionally for an insurance plan to be included in the exchange it must meet a federal minimum requirement that stipulates what benefits must be included, among other things. While the individual and small business exchanges are technically separate programs, states have the option of combining the exchanges. There is no requirement for individuals or small businesses to use these exchanges, and an insurance market will continue to exist outside the exchange programs.
Why are they needed?
Historically small businesses have had a difficult time offering health insurance to employees, as premiums tend to be higher per worker due to the higher per person costs of administering a plan to a small group of people. The exchange program for small businesses (Small Business Health Options Program, aka SHOP) will make it easier for employers to compare plans and provide more choices to their employees without raising premiums. Both individual and SHOP exchanges must open enrollment by October 2013, and be fully functional by January 2014.
How will they function?
States have been given much latitude in determining how their exchanges programs will be executed. They may be an executive branch agency, and independent government authority, or a non-profit organization. States may also forge exchange partnerships with other states to cover a larger region. Additionally, if a state does not have a functional exchange in place by January 2014, or decides not do provide an exchange, the federal government will step in and partner with the state. States can also decide whether the exchanges will offer “any-willing-plan,” where any plan that meets minimum requirements would be part of the exchange, or states may be ‘active purchasers,’ where the state chooses what plans are in the best interest of their populations. It is estimated that by 2019, 28 million Americans will be covered through Affordable Insurance Exchanges.
Read the Robert Wood Johnson Foundation, Kaiser Family Foundation, Healthcare.gov sites for more detailed information.
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
William Teeter – National Delegate
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More "Heath Policy 101" articles on the official OSR Legislative Affairs website
For more Health Care Policy news go to: https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html
What are they?
The Affordable Care Act (ACA) mandates that states develop Affordable Insurance Exchanges that will allow small businesses (<100 employees) and individuals to review, compare, and shop for both private and public insurance plans The exchanges will also make it clear if the individual or business is eligible for a tax credit. The ultimate goal of this initiative is to provide easy to understand, comparative information that will make choosing a plan easier. Exchanges will also create an administrative mechanism for easier enrollment. Because insurance companies can no longer deny applicants with pre-existing conditions, the exchanges will hopefully help reform the insurance market and make it more effective, as well as allow for monitoring of marketing practices. Additionally for an insurance plan to be included in the exchange it must meet a federal minimum requirement that stipulates what benefits must be included, among other things. While the individual and small business exchanges are technically separate programs, states have the option of combining the exchanges. There is no requirement for individuals or small businesses to use these exchanges, and an insurance market will continue to exist outside the exchange programs.
Why are they needed?
Historically small businesses have had a difficult time offering health insurance to employees, as premiums tend to be higher per worker due to the higher per person costs of administering a plan to a small group of people. The exchange program for small businesses (Small Business Health Options Program, aka SHOP) will make it easier for employers to compare plans and provide more choices to their employees without raising premiums. Both individual and SHOP exchanges must open enrollment by October 2013, and be fully functional by January 2014.
How will they function?
States have been given much latitude in determining how their exchanges programs will be executed. They may be an executive branch agency, and independent government authority, or a non-profit organization. States may also forge exchange partnerships with other states to cover a larger region. Additionally, if a state does not have a functional exchange in place by January 2014, or decides not do provide an exchange, the federal government will step in and partner with the state. States can also decide whether the exchanges will offer “any-willing-plan,” where any plan that meets minimum requirements would be part of the exchange, or states may be ‘active purchasers,’ where the state chooses what plans are in the best interest of their populations. It is estimated that by 2019, 28 million Americans will be covered through Affordable Insurance Exchanges.
Read the Robert Wood Johnson Foundation, Kaiser Family Foundation, Healthcare.gov sites for more detailed information.
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
William Teeter – National Delegate
-----------------------------------------------------------------
More "Heath Policy 101" articles on the official OSR Legislative Affairs website
For more Health Care Policy news go to: https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html