Health insurance exchanges under the Affordable Care Act
By Legal & Regulatory Affairs staff
April 25, 2013–One of the main objectives of the Affordable Care Act (ACA) is to expand access to affordable health care coverage to the approximately 45 million Americans who currently have no coverage. To achieve this goal, the ACA creates health insurance exchanges and calls for potential expansion of state Medicaid programs.
Under the ACA, health insurance exchanges must be operational beginning in 2014. These exchanges create a marketplace wherein individuals and employees of small businesses can purchase affordable private health insurance from qualified health plans. Open enrollment for eligible individuals is expected to begin Oct. 1, 2013.
The exchanges must offer an integrated and simplified online system that allows consumers to submit a single application to apply for and enroll in any of the qualified health plans or public programs (such as Medicaid or Children’s Health Insurance Program [CHIP]) offered as well as provide consumer assistance tools (toll-free numbers and websites) to help consumers navigate the exchange.
Through the exchanges, consumers will have access to an online system that offers one-stop shopping. They will be able to view and compare plan choices through a standardized format; determine their eligibility for coverage for any of the available programs in the exchange; verify eligibility for federal tax credits to pay for coverage or for cost-sharing reductions; and enroll for coverage.
All plans offered through the exchanges must be certified by federally recognized accreditors (currently, the National Committee for Quality Assurance and URAC) as a “qualified health plan (QHP).” To be accredited as a qualified health plan, plans must satisfy certain minimum criteria further defined in Department of Health and Human Services (HHS) regulations. For example, insurance plans must offer essential health benefits, which include mental health benefits, as defined by the Affordable Care Act and maintain cost-sharing limits (for example, deductibles, copayments and out-of-pocket maximum amounts). Qualified health plans are also subject to federal parity requirements.
In addition, a QHP must demonstrate that it does not market its plans in any way that would discriminate against people with serious or chronic illness; that it has sufficient numbers and types of providers for its networks; and that it offers coverage for the entire geographic area of the state covered by the exchange.
Also, the qualified health plans must provide different levels of coverage, described as “metal” levels. These levels are: Platinum, Gold, Silver and Bronze. While each QHP “metal” level must offer the core package of essential health benefits, there will still be variability among plans as to the extent of coverage. But by offering plans with similar levels of coverage, consumers will be better positioned to evaluate coverage options. For example, if interested in “silver” plans, consumers can easily compare benefits for all plans classified under this category.
The health insurance exchanges may be established in one of three ways: state-based exchange where the state is responsible for creating and maintaining its own exchange; a state partnership exchange where the state partners with the federal government and each performs certain functions in support of the exchange’s operations; or a federally-facilitated exchange where HHS will manage operations of the exchange in those states that have chosen not to establish their own exchange or partner with HHS.
In a majority of states, the health insurance exchanges will either be managed by the federal government or as a co-partnership between the federal and state governments. In those states, HHS and the Centers for Medicare and Medicaid Services (CMS) are inviting local, state and/or regional leadership to participate in a teleconference conversation regarding the Health Insurance Marketplace. This call is part of the ongoing commitment by HHS to encourage public participation as it builds a new Marketplace in Federally-Facilitated and State Partnership states. Visit the Health Insurance Marketplace Stakeholder Engagement Open Door Forum webpage for more information.