In sum, the Affordable Care Act requires that uninsured individuals will be able to shop and purchase health insurance through “Insurance Exchange” programs. These Exchange programs must be in place and enrollment of individuals must begin no later than October 1, 2013, and the exchange program must be fully operational no later than January 1, 2014. This means every individual will have access to affordable health insurance.

Health Insurance Exchange

A key component of the Affordable Care Act (also known as “ACA”) is State-Based Health Insurance Exchanges, or marketplaces, where individuals and small businesses will be able to shop for health insurance coverage. The Affordable Care Act allows states an option of operating their own exchange or partnering with the federal government to run an exchange. The Affordable Care Act has set forth three options for states to create and implement the State-Based Health Insurance Exchange Program.

First, states have the option to operate a State-Based Exchange wherein the state will perform all exchange-related activities, including contracting with health plans, providing consumer outreach and assistance, and building the necessary information technology infrastructure to assess eligibility and enroll individuals into an insurance coverage plan. States have the option of using federal services to determine eligibility for premium tax credit and cost-sharing reductions, as well as to operate the risk adjustment and reinsurance programs. To date, 17 states plus the District of Columbia have indicated that they intend to establish a state-based exchange. Health Reform Weekly’s report dated December 17, 2012, reported that of the 17 states and District of Columbia that are planning to operate a State-Based Exchange, eight states and the District of Columbia have received conditional approval from the Department of Health and Human Services. The other ten states have submitted applications for State-Based Exchanges, which are currently being reviewed by the Department of Health and Human Services.

Second, states can opt to operate a State-Federal Partnership Exchange. States participating in the State-Federal Partnership Exchange are states that have recognized the difficulty of building a fully functionally State-Based Exchange before January 2014. Thus, the Department of Health and Human Services developed a State-Federal Partnership Model as an option for states. The State-Federal Partnership Exchange allows for the combined management of exchange functions and for an easier transition to a fully State-Based Exchange in the future. States opting for a State-Federal Partnership Exchange can choose to operate certain plan management functions, certain consumer assistance functions, or both. In addition, a state participating in the State-Federal Partnership Exchange can elect to conduct Medicaid and Children’s Health Insurance Program (also known as “CHIP”) eligibility determinations or allow the Federal government to perform this service. In all states participating in the State-Federal Partnership Exchange the Department of Health and Human Services will perform the remaining Exchange functions and ensure the Exchange meets Affordable Care Act standards.

States opting for a State-Federal Partnership Exchange must submit a proposal or outline of their plan to the Department of Health and Human Services by February 15, 2013. The Department of Health and Human Services will issue approvals for State-Federal Partnership Exchanges on a rolling basis beginning on March 1, 2013. To date, six states are planning to pursue a State-Federal Partnership Exchange. These states include: Arkansas, Delaware, Illinois, Michigan, North Carolina, and Ohio. Ten states remain undecided with regard to whether they will implement a State-Based Exchange or a State-Federal Partnership Exchange.

States not ready to run their own exchanges in 2014 may transition from a State-Federal Partnership Exchange to a fully State-Based Exchange at a later date when they have the capability; however, they must receive approval for their State-Based Exchange Program at least eleven months prior to the start of coverage.

The third option available for states to comply with the Affordable Care act is a Federally-Facilitated Exchange. This option is for states that are unable or unwilling to establish a State-Based Exchange Program or a State-Federal Partnership Exchange Program. In these states the Department of Health and Human Services will assume primary responsibility for operating an Exchange Program in that state. The Federal government will seek to coordinate with state agencies on multiple fronts including plan certification and oversight functions, consumer assistance and outreach, and on streamlining eligibility determinations for the Exchange Program and Medicaid. The states’ involvement with the Federally-Facilitated Exchange, while not mandatory, will be important for ensuring effective and seamless operation. Over time, this involvement may allow states in a Federally-Facilitated Exchange to transition into a State-Federal Partnership Exchange or a State-Based Exchange Model. As of the end of November 2012, seventeen states had declared they would not create a State-Based Exchange Program and will likely opt for a Federally-Facilitated Exchange Program.

To date, ten states are still undecided with regard to how they will operate their Health Exchange Program.

Medicare Pathways is devoted to staying informed with regard to the Health Exchange Programs and will assist individuals in enrolling in plans to the extent allowed by the Federal government. As more information becomes available, Medicare Pathways will post so you will know your options and how you can receive assistance in reviewing the options available in your state. This will enable Medicare Pathways to expand its clientele beyond the senior market and assist individuals of all ages in obtaining the most appropriate, most affordable health insurance policy. While Medicare Pathways remains devoted to the senior market and providing assistance regarding Medicare insurance we are very excited about working with all individuals in obtaining affordable health insurance.

 

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