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The health insurance exchanges will help increase the number of people with insurance.




Welcome to VoteFacts.org.  With all the reeling over health care this past week, we want to continue to help you keep focused on facts and learn as much as you can about what lies ahead.  With that in mind, we are going to dive into some bulletpoints relating to the health insurance exchanges.  Here we go...

Under the new health care law (PPACA), state-established “American Health Benefit Exchanges” will have to be established in every state by January 1, 2014.  Exchanges will not be insurers, but will provide qualified individuals and small businesses with access to insurers’ qualified health plans in a comparable way.   Congressional Research Service (CRS), Summary

The Exchanges will consist of a selection of private plans as well as "multi-state qualified health plans (QHPs)," administered by the Office of Personnel Management (OPM).   CRS, Page 1

The Exchanges will be government entities, with a role in setting minimum benefit standards, but they will not directly provide health insurance coverage.  The same situation applies to the multi-State Exchange plans arranged by the Office of Personnel Management.   CMS, Page 18

URL:   www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf

Within one year of enactment, the Secretary of Health and Human Services (HHS) will determine and make grant awards to states to create exchanges.   However, no grant may be awarded after January 1, 2015.  Exchanges will have to be self-sustaining by then, using assessments on insurers or some other way to generate funds to support their operations.  CRS, Page 18

Generally, the plans offered through the exchanges will provide comprehensive coverage and meet all PPACA market reforms. One of the requirements that most exchange plans must meet is to provide a certain level of coverage generosity based on actuarial value. Each level of coverage generosity is designated according to a precious metal and corresponds to a specific actuarial value: Bronze (actuarial value of 60%), Silver (70%), Gold (80%), and Platinum (90%).  CRS, Summary Page

A health insurance plan's actuarial value is the share of costs for covered services that it would pay, on average, with a broadly representative group of people enrolled.   CBO, Page 1

Beginning in 2014, the bronze, silver, gold, or platinum requirement will apply regardless of whether or not the Qualified Health Plan (GHP) is offered through an exchange (and premiums must be the same for QHPs inside and outside of the exchange).  Excluding dental-only plans, health insurance issuers must offer a silver plan and a gold plan in the exchange.   CRS, Page 16

As a rule, individuals would be required to have a policy covering the “essential benefits” specified in the law and having an actuarial value of at least 60 percent in order to avoid a penalty.  That minimum level of coverage is designated as a “Bronze” plan.   Overall, CBO estimates that premiums for Bronze plans purchased individually in 2016 would probably average between $4,500 and $5,000 for single policies and between $12,000 and $12,500 for family policies.   CBO, Page 2

A lower actuarial value would reduce premiums for Bronze plans directly, because the policy would pay for a smaller share of enrollees’ costs for covered services, and indirectly, because enrollees would use slightly fewer or less-expensive services when faced with the higher cost-sharing requirements included in Bronze plans.  CBO, Page 2



An exchange must do the following:
  • implement procedures to certify, recertify and decertify Qualified Health Plans (QHPs);
  • provide for the operation of a toll-free hotline;
  • maintain a website through which individuals can view standardized comparative information on plans;
  • assign a rating to each exchange plan based on criteria developed by the Secretary of Health and Human Services (HHS);
  • use a standardized format for presenting exchange plan options;
  • inform individuals of eligibility requirements for Medicaid, CHIP or any other state or local program and, if through the screening process the exchange determines they are eligible for one of those programs, enroll them;
  • provide for a calculator to determine the actual cost of coverage to individuals after taking into account any premium credits and cost-sharing subsidies;
  • certify whether individuals are exempt from the individual mandate excise tax and transfer the list of such individuals to the Treasury Secretary;
  • provide to employers the name of the employees who dropped the employer’s coverage and received premium tax credits because the employer’s plan was unaffordable or did not provide the required minimum actuarial value; and
  • establish the Navigator program.   CRS, Page 19
Relative affordability of health insurance premiums individuals and families might face within health insurance exchanges will likely vary from exchange to exchange based on a host of factors, including enrollees’ age, the varying prices paid by plans for medical goods and services, the breadth of the provider network, the provisions regarding how out-of-network care is paid for (or not), and the use of tools by the plan to reduce health care utilization (e.g., prior authorization for certain tests).  CRS, Summary Page

Some individuals and families may find their post-tax insurance premiums to be higher after PPACA than before.   CRS Report, Page 23

According to the Congressional Budget Office (CBO), 29 million individuals are projected to be enrolled in exchange coverage in 2019. Of those, 19 million are projected to receive premium subsidies.   CRS, Page 1

Watch for a future Fact or Fiction question focused on the facts relating to the Exchange subsidies.  But for now, we want to know what you think about the Exchanges.
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