The idea of a health insurance exchange as laid out in President Barack Obamaís signature law seems straightforward: an online marketplace where people will shop for private health insurance, like buying an airline ticket or a hotel room. But making sure exchanges in every state are ready for business by the lawís deadline of 2014 has been anything but easy given the legal, technical and political questions surrounding them.
States had until Dec. 14 to tell the Obama administration whether they would be building their own exchanges. The answer was yes for 18 states and the District of Columbia. The remaining states, most led by Republican governors, will either have their exchanges run by the Department of Health and Human Services or take part in federal-state partnerships. One of the 18, Utah, is trying to gain permission to keep its current exchange even though it doesnít conform to the federal law.
Even with all thatís been written about the 2010 law (PL 111-148, PL 111-152), a lot of confusion still exists about the exchanges and the process required to set them up. Following are some answers to a few basic questions that have been asked.What does a health insurance exchange do and who joins one?
Each exchange will offer a selection of health care plans that meet standards for quality and affordability set by the health care law. The idea is that insurers will compete in the exchange to offer the best plans, reducing costs for consumers.
The exchanges will serve the 19 million people who donít have group health insurance through their employers and instead buy health care policies directly from insurance companies. Exchanges are not intended to replace the group coverage offered by large employers to about 60 percent of Americans.
Small businesses also will obtain insurance for their employees through the exchangesí Small Business Health Options Program. In addition, some states will have insurance plans in the exchange offered by nonprofit, consumer-run co-ops. The Congressional Budget Office estimates that 25 million to 26 million Americans will eventually buy their insurance through an exchange.How do people take part in an exchange?
Enrollment will open in October and end in March 2014. Consumers will look at health insurance plans on an exchange website or obtain details over the phone from a call center. Prescription drug coverage, in-network doctors, co-payments and more will be spelled out.
Consumers also will be able to find out from the exchange whether they qualify for federal subsidies to buy insurance, which will be available to single people and families earning up to 400 percent of the federal poverty level. And theyíll find out if they or their children qualify for Medicaid or the Childrenís Health Insurance Program. One of the IT challenges is how to communicate that information between the states and the federal government.In states in which exchanges are run by the federal government, how will they be different?