The creation of Health Insurance Exchanges is one of the major features of the Affordable Care Act (ACA). They may become especially important to people who are over age 50 but too young for Medicare and who need to replace their health insurance coverage. The Exchanges are scheduled to launch Jan. 1, 2014.
People between age 50 and age 65 can have a difficult time replacing their health insurance when they lose group coverage from their jobs. Self-employed people may also struggle to find affordable comprehensive health insurance as they grow older. Older Americans between ages 55 and 64 are at particular risk of being effectively uninsured since a majority have some type of pre-existing condition. Under the ACA, starting in 2014, insurers can no longer limit needed benefits, charge higher premiums, set lifetime limits on benefits, or deny coverage due to a person’s pre-existing condition. And individuals and small businesses will be able to purchase private health insurance at competitive rates through state-based Health Insurance Exchanges.
It is hoped that these Exchanges will serve as virtual shopping centers like Amazon.com. Tax credits and cost sharing reductions will be available for individuals and families with moderate incomes to ensure Exchange options are affordable for all. Exchanges will coordinate with Medicaid coverage. They should also help small businesses that are seeking to provide employee health insurance.
In March, the Department of Health and Human Services published a 644-page final rule which sets out the minimum standards states must meet in establishing and operating their exchanges. The rule provides minimum standards that health insurers and employers must meet to participate in an exchange and that employers must meet to participate. The final exchange regulations give each state a lot of flexibility to design its own exchange.
Pennsylvania is required to develop and obtain federal approval for a health exchange by January 1, 2013, or the federal government will assume responsibility for running a health insurance exchange in the state.
The Corbett administration has been working on a plan to establish a health exchange for use in the event the Supreme Court upholds this aspect of the Affordable Care Act. However, it is possible that Pennsylvania could implement an exchange on its own even if the ACA requirements are voided by the Court. In November 2011, the Insurance Department released an extensive report which suggested that there is broad support for a state-run exchange. For the report and further information see the Department’s website at http://www.portal.state.pa.us/portal/server.pt/community/health_insurance/9189/health_insurance_exchange_-_archived_exchange_information/1075404.
In January, the Corbett Administration requested (and later received) federal funds to complete planning and begin development of a Pennsylvania health insurance exchange. And the Insurance Department circulated a 32-page informal draft that contemplates a public private partnership approach. The Insurance Department estimated that 2 million to 2.2 million Pennsylvanians could get coverage through the exchange.
No matter what result is announced by the Supreme Court in its impending decision on the health reform law it seems that a health insurance exchange may be part of Pennsylvania’s future. Good. It should greatly ease the burden we face in finding affordable health coverage.
Legislation will be required to implement an exchange in Pennsylvania.
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