Time to learn about the health insurance exchanges under the Affordable Care Act

Posted by AzBlueMeanie:

Elections have consequences, and the most important consequence of the 2012 election is that the Affordable Care Act (aka "ObamaCare") is the law of the land and will now be fully implemented.

The Obama administration will allow states additional time to plan
health insurance exchanges, and
to set up the marketplaces at the heart of the Affordable Care Act (ACA). For hurried states, Obama administration extends health law deadlines:

States now have an extra month to send the federal government
“blueprints” for how they will have the health exchange up and running
by 2014, according to a letter Health and Human Services Secretary
Kathleen Sebelius sent to governors Friday.
They must still inform the Obama administration whether they plan to
set up an exchange by the original deadline of Nov. 16. Planning
documents must follow by Dec. 14.

Many states have already decided they will not build the insurance marketplaces, leaving the task to the federal government.

The governors of Florida, Virginia and Kansas announced Thursday they
would take this route. As many as 17 states are expected to have the
federal government run their exchanges
, according to an analysis from
consulting firm Avalere Health.

* * *

Sebelius wrote to governors that the agency had “heard from many
states that additional time would allow you to submit a more
comprehensive, complete Blueprint application for your Exchange.”

“We are committed to providing you with the flexibility, resources,
and technical assistance necessary to help you achieve successful
implementation of your state’s Exchange,” she wrote.

States also have the option of pursuing a “partnership” exchange.
Under that model, the state and federal governments would each take
partial responsibility for running parts of the insurance marketplace.

States pursuing that model must notify the federal government in just over three months, by Feb. 15.

The Obama administration must certify that all states planning to
administer their own exchanges have made sufficient progress by Jan. 1.
Next October, the marketplaces will need to launch for open-enrollment
periods.

* * *

“If states don’t make this decision in the next 15 to 30 days, it’s
going to be really hard to catch up,” said Sam Gibbs, senior vice
president of sales at eHealthInsurance, which is helping states build
insurance exchanges. “That’s why Sebelius is saying, ‘You can give me
your plans later, but I still need to know which direction you’re
going.’ ”

The extended deadlines will not affect the overall implementation
timeline: Health insurance exchanges are still slated to launch at the
start of 2014
.

Community Catalyst (communitycatalyst.org) is "a national non-profit advocacy organization
working to build the consumer and community leadership that is required
to transform the American health system." Its first priority is quality affordable health care for all. Community Catalyst has a good quick explanation of the health insurance plans to be offered through the exchanges that will be set up under the ACA. Essential Benefit Package – Health Insurance 101:

The Affordable Care Act (ACA) makes a number of changes to private
health insurance plans. One important protection is the establishment of
a package of essential health benefits.

* * *

The details of what is included in the essential health benefits package
will be determined by the Secretary of Health and Human Services (HHS)
in a future regulation, but the ACA lists a set of core,
federally-required benefits and describes the health plans which will
not be required to offer these essential health benefits
.

* * *

The essential health benefits are intended to mirror those provided
under a typical employer-sponsored health plan. The HHS Secretary must
define a package that includes, at a minimum:

  • Ambulatory patient services, such as doctor's visits and outpatient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

While the ACA requires coverage for each of these categories, the law
does not define the specific services that must be covered or the
amount, duration, or scope of services. The HHS Secretary will define
the specific benefits within each of these categories and will be able
to update the definition over time to address gaps or respond to
changing medical practices in the future.

In defining the essential benefits package, the HHS Secretary must
decide not only which health services to include, but also how much
discretion to leave to insurers in coverage decisions. For example, if
the Secretary determines that physical therapy to treat lower back pain
is a covered benefit, she could determine the minimum number of physical
therapy sessions that must be covered to treat the condition, or she
could leave that to the discretion of the insurers.

Currently, many insurers must cover certain services as requirements
of state law. The ACA allows states to continue to mandate health
benefits
. However, going forward, if the mandated benefits are not
included in the essential health benefits defined by the HHS Secretary,
states will have to pay for any increased premium costs that result from
those mandates. HHS will likely determine this process in future
regulations.

* * *

The ACA links the essential health benefits package to limits on
cost-sharing. So health plans that are required to provide essential
health benefits will also be required to limit the amount consumers will
have to pay out-of-pocket
. Specifically, health plans will be
prohibited from requiring consumers to pay annual cost-sharing that is
greater than the limits for high deductible plans linked to health savings accounts. Currently, those limits are $5,950 per year for individuals and $11,900 per year for families. In addition, small group plans must limit deductibles
to $2,000 for individual coverage and $4,000 for family coverage. As
with all health plans under the ACA, there is no cost-sharing for
certain preventive health services recommended by the United States
Preventive Services Task Force.

Within these allowable limits, all health plans except grandfathered or self-insured plans
will be required to provide consumers with specified levels of
coverage, determined by the plan's actuarial value
. The levels of
coverage are set as percentages of the actuarial value of a plan that covers the full essential benefits package with no cost-sharing. These levels are represented as Bronze, Silver, Gold, and Platinum.

Starting January 1, 2014, the ACA requires individual and small group plans
to include all essential health benefits, limit consumers'
out-of-pocket costs, and meet the Bronze, Silver, Gold and Platinum
coverage level standards
– however, grandfathered and self-insured plans
will be exempt. Large group plans (in most states, groups with more
than 50 employees) are required to meet the cost-sharing limits and the
benefit levels, but are not required to provide the full scope of
benefits in the essential benefits package.

Beginning January 1, 2014

Must Provide Essential Health Benefits

Must Limit Cost Sharing and Deductibles

Health Plans in Exchange

Small Group

Yes

Yes

Non-Group

Yes

Yes

Other Health Plans

New Plans

Self-insured

No

No

Large Group

No

Yes

Small Group

Yes

Yes

Individual

Yes

Yes

Grandfathered Plans

Self-insured

No

No

Large Group

No

No

Small Group

No

No

Individual

No

No

The Essential Benefit Package – Health Insurance 101 page links to a menu of related topics of interest.

The National Conference of State Legislatures (NCSL), which many state legislatures rely upon, has a more detailed summary for policy wonks at American Health Benefit Exchanges.

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