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October 2012
Looking Forward to NEW Health Insurance Exchanges!
By John Paul Galles

     One year from now, on October 1, 2013, you should be able to choose your health insurance plan under the NEW federal rules from a Health Insurance Exchange. While you may not be able to choose from a North Carolina Exchange, you will be able to choose from a federal exchange.

     Under the Affordable Healthcare Act (ACA) and the portions of the act found to be constitutional by the U.S. Supreme Court, individuals and employees of small businesses will have access to affordable coverage through a new competitive health insurance market—state-based Affordable Insurance Exchanges or the federal exchange.

     These will be one-stop shops to find and compare affordable, quality private health insurance options available for you and your families. Exchanges will bring new transparency to the market so that Americans will be able to compare plans based on benefits, price and quality. It is hoped that by increasing competition between private insurance companies and allowing individuals and small businesses to band together to purchase insurance, exchanges will help to lower costs.

     Unfortunately, the State of North Carolina and the State of South Carolina have yet to begin to set up their own exchanges. In the event that they fail to form statewide exchanges, citizens of those states will be given the option of signing up for insurance coverage from a federal insurance exchange. States will be allowed to establish exchanges in the future should they choose to do so on their own timetable.

     In 2007, the first exchange was launched as the Massachusetts Health Connector. Ada May Roberts was among the first to sign up for health insurance. She recounts her experience:


     Ada May Roberts worried each year about renewing her health insurance. She feared being told the price had doubled or the insurance company would not renew her policy.

     So every fall, the Massachusetts innkeeper spent hours with insurance salespeople, reading the fine print and filling out medical forms. Then she prayed she’d be covered.

     All that changed three years ago. On the first day the Massachusetts Health Connector opened, Roberts typed her name, birthday and zip code into a website. In five minutes, she had a list of 22 plans—rated gold, silver or bronze. It took her only 10 minutes to buy health insurance. Since then, her rates have dropped $300 a month, and she never fears being kicked off.

     “I’m happy, happy, happy,” says the 59-year-old. “The weight of uncertainty has been lifted. Massachusetts got it right.”


     Utah has the only other operating exchange at this time.

     Regardless of the politics and threats of repeal, the ACA law is the law and the act is being implemented. In 2014, every individual will be required to purchase health insurance coverage. Many individuals and employees of firms with fewer than 50 employees will qualify for subsidies to make the coverage affordable through an expanded Medicaid program. Subsidies will be available for individuals and families through a cost sharing program under Medicaid up to 400 percent of the poverty level or about $88,200 for a family of four.

     The law specifically exempts all firms that have fewer than 50 employees—96 percent of all firms in the United States or 5.8 million out of 6 million total firms—from any employer responsibility requirements. These 5.8 million firms employ nearly 34 million workers. More than 96 percent of firms with 50 or more employees already offer health insurance to their workers. Less than 0.2 percent of all firms (about 10,000 out of 6 million) may face employer responsibility requirements. Many firms that do not currently offer coverage will be more likely to do so because of lower premiums and wider choices in the Exchange.

     Hopefully, states will choose to form their own health insurance exchanges. States have been given greater flexibility to set up exchanges under the rules established by the Health and Human Services Department. Exchanges will provide access to Qualified Health Plans (QHPs). These plans will be subjected to a specified list of requirements including marketing, choice of providers, plan networks, essential benefits and other features and be licensed by the state.

     QHPs may provide coverage at Bronze (60%), Silver (70%), Gold (80%) and Platinum (90%) levels paid by the insurer. Included in the benefit packages will be essential health benefits (EHBs) defined as ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health, substance abuse and behavioral treatments, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness and chronic disease management and pediatric services including oral and vision care.

     We look forward to action by North Carolina and South Carolina that will establish consumer friendly exchanges within their state boundaries soon. Until then, we will choose from the federal exchange.






John Paul Galles is the publisher of Greater Charlotte Biz.
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