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When the Affordable Care Act was signed into law in March 2010, one of the centerpieces of the plan was the creation of “health insurance exchanges.” These state-by-state marketplaces allow small businesses and individuals without insurance to band together in order to shop amongst competing insurance companies for more affordable coverage than is currently available to these individuals.
The hope is that, by 2019, these exchanges will provide health care coverage for some 24 million Americans—about half of all those currently uninsured. Most of them are expected to receive some form of subsidy to help pay for their coverage. People whose income hovers right around the poverty line, which is around $11,000 for an individual and $22,050 for a family of four, should not have to pay more than 3 to 4 percent of their incomes for reasonably good health insurance. People making less than about four times the federal poverty level (or about $44,000 a year for an individual and about $88,000 for a family of four) would be eligible for some money from the government to help them pay for their insurance. The less one makes, the bigger the subsidy.
So how are these exchanges going to work? Should you try to get insurance through one? The answers to those questions are still murky, although the details of just how the exchanges will work are starting to take shape.
“For people with neurologic conditions, health insurance exchanges may offer expanded access to coverage.” - —Marc Nuwer, M.D., Ph.D.
In August, the Department of Health and Human Services (HHS) awarded a total of more than $185 million in grants to help 13 states and the District of Columbia build the exchanges. States have a deadline of January 1, 2013, to submit detailed plans. More than half of states have already taken steps toward launching theirs.
Meanwhile, in letters sent to the governors of each state, HHS outlined more of the procedures involved and resources available to move the exchanges along. For example, single people and families will get tax credits for the premiums they pay into one of the exchanges, and small businesses that participate will receive tax credits to allow them to give their employees a choice of plans. But key details are still missing—such as exactly which benefits will have to be provided by participating plans.
Ultimately, says Marc Nuwer, M.D., Ph.D., Fellow of the American Academy of Neurology (AAN), chief of clinical neurophysiology at the Ronald Reagan UCLA Medical Center in Los Angeles, and a national expert on health care reform, shopping for health insurance via a statewide exchange will probably be a lot like the “open enrollment” period that happens every year at large companies.
“Here at UCLA, for example, every year they send us out a table with six or eight choices for insurance, what each one will cost you, and a very brief summary of what that plan is like,” Dr. Nuwer says. “Then you can go online to get more information about each. That's probably the same kind of information you're going to get from your state.”
Who will be sending you that information? That's not clear either. “In some states, the exchanges may be so large that they will be their own agency,” says Dr. Nuwer. “In other states, they'll be within another state office. In any case, the agency that oversees the exchange will be in charge of negotiating reasonable prices and reasonable benefits to be available for the people of the state.”
For many people with chronic neurologic conditions, health insurance exchanges may offer access to coverage that they have otherwise been unable to get, Dr. Nuwer says. Some examples:
▸ Younger individuals whose conditions—like multiple sclerosis or debilitating migraines—have limited their employment and kept them out of company-sponsored health plans
▸ People who are self-employed or independent contractors—a flexible option that can be a great career solution for those whose neurologic conditions keep them from a full-time work schedule, but a career path that rarely offers affordable insurance
▸ Older individuals who have not yet reached the eligibility age for Medicare
“This will allow a lot of people who have been kept out of the insurance pool by cost, preexisting conditions, or both, to buy reasonably priced insurance,” says Dr. Nuwer. Because while many of the rules governing the exchanges are still evolving, one is set in stone: they can't ask you how sick you are.
“You cannot be excluded from buying into a plan via a health insurance exchange, regardless of your past, current, and expected future medical problems,” explains Dr. Nuwer. “Those are off the table. They cannot be discussed when talking about signing up for a plan. They can't even send you for a medical exam, according to my understanding of the rules.”
Right now, insurers are afraid to offer affordable individual plans, Dr. Nuwer says. “They think the only people who will buy them are those who think they're sick,” he explains. “But if you lump together 100,000 people who mostly think they're in good health, it becomes reasonable for private insurers to play and give the group overall a good deal.”
But that doesn't mean every state's exchange will be a good solution for everyone. And court challenges to the individual mandate—that is, the law's requirement that everyone sign up for some form of health insurance—are moving forward. In August, the U.S. Court of Appeals for the 11th Circuit struck down the individual mandate, and it's expected that the issue will eventually end up before the Supreme Court.
“You need a lot of people signing up for the exchange to keep the rates low,” says Dr. Nuwer. “Without the individual mandate, the ability of states to make that happen will be substantially impaired. Watch to see if your state is making a big effort to get a large pool of people signing up.”
In the meantime, if you work for a smaller business that does offer health insurance, lobby them to keep their own benefits until the confusion over exchanges has settled down. “You don't want January 1, 2015, to come and the owner of XYZ agency to declare that they no longer offer medical benefits because you can get them through the exchange,” Dr. Nuwer says. “It could be crazy over the first couple of years, and it sure would be better if you kept any benefit you have at work until it all settles down. If you have something, don't give that up until you have a better idea of what the alternative is going to be with the new plans.”
Some states are resisting the idea of implementing health insurance exchanges (along with other provisions of the Affordable Care Act). Initial efforts to establish exchanges have failed in a number of states, including Louisiana, Arizona, and Florida.
So, if you think a health insurance exchange could help provide you with affordable access to coverage that you and your family need, then be the squeaky wheel. Contact your state legislators and tell them your story. Let them know why affordable health care coverage through a health insurance exchange is so important and urge them to work quickly to enact a program that will provide access to quality care for the people of your state who need it.
For More Information:
▸ Healthcare.gov , the government's Web site focused on health care reform and the Affordable Care Act, has a section on insurance exchanges: www.healthcare.gov/law/provisions/exchanges/index.html
▸ Find out where your state stands! Read a progress report on state health insurance exchanges, updated in July 2011: http://bit.ly/ExchangeUpdate
▸ The Kaiser Family Foundation has pulled together a wealth of background material on health insurance exchanges here: healthreform.kff.org/tags/exchanges.aspx