Exchanges Will Offer Consumers Better Choices in Every State

February 21, 2013 at 4:40 pm

Every state has now decided whether, under health reform, it will build and operate a state-run “exchange” — a marketplace where individuals and small businesses can compare and purchase insurance coverage — partner on an exchange with the federal government, or have the federal government operate an exchange in the state.

Seventeen states and Washington D.C. will go for a state-run exchange, seven states say they’ll pursue a State Partnership Exchange with the federal Department of Health and Human Services, and the remaining 26 states will let the federal government run an exchange within their borders (see map).  Moving forward, however, states that opt for a federally facilitated exchange or a partnership today can transition to a fully state-run exchange in coming years.

While health care aficionados have tracked the states’ decisions closely, we shouldn’t forget that residents in all states will benefit from major improvements to the way insurance is designed and sold, regardless of whether their state runs its own exchange or has the federal government operate one.  Most people without access to insurance today will be able to use these exchanges to comparison shop among a number of affordable, comprehensive coverage options.  And, depending on their income, many will receive tax credits to help cover the cost of this coverage as well as assistance with co-pays and deductibles.  Small businesses also can buy from these new marketplaces, offering many more choices to their employees than are available today.

People who are now covered will see upgrades to their insurance.  Often, many small businesses and individuals who buy insurance today can only afford policies that skimp on coverage or place lots of financial barriers on accessing care, especially for people who are sick.  In 2014, new insurance market rules will prevent insurance companies from selling products that discriminate against older people, women, and people with pre-existing health conditions.  Health reform (i.e., the Affordable Care Act or ACA) also creates standards to ensure that insurance policies provide value to consumers by covering the kinds of benefits and services most people need and limiting what they have to pay out of pocket for deductibles and co-pays.

There’s lots of work left to ensure that consumers can take advantage of all of the ACA’s benefits that start next year.  But residents in all states, regardless of whether their state will run its own exchange, will gain an insurance marketplace that is far more fair, transparent, and value-driven than today.

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More About Dave Chandra

Dave Chandra

Dave Chandra is a Senior Policy Analyst at the Center on Budget and Policy Priorities in the Health Policy Department.

Full bio | Blog Archive | Research archive at CBPP.org

2 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. Lynn Endres #
    1

    I know OK opted for Federal program, but have heard nothing and getting a little nervous. At age 59, if I could have afforded health insurance, believe me, I would ave gotten it by now. I am underemployed – lost main job, no more savings or investments left, barely hanging onto the house. Heard there will be “vouchers” to help us, but have also heard there will be financial penalties (on our taxes) if we don’t have insurance. I’ve already done my 2012 taxes, but have heard from friends that their tax reps asked them questions about their health insurance…I did mine online (HR Block) but didn’t see anything about this. MY CONCERN…when will this insurance be mandatory, what about the vouchers, and where are these companies that will cover us? I’ve Googled just about every site and can’t seem to find this information. Please direct me, if you can. Thank you!

    • Dave Chandra #
      2

      We are really sorry to hear you have had such difficulty obtaining coverage. Sadly, a lot of people in many states face similar situations. The Affordable Care Act is intended to address many of these very problems.

      We understand there is a lot of confusion regarding the changes to our health insurance system because of the Affordable Care Act. Many of these changes will improve the quality of health insurance and make it much easier to get for people who don’t have access today. But there are a lot of complicated details.

      Hopefully these changes (including the creation of an exchange in Oklahoma) can help you find affordable coverage once it is available starting in January 2014.

      Here are some facts we wanted to share with you to answer your questions:

      • It is true that tax credits will be available starting in 2014 to help people buy insurance, including in Oklahoma, where, as you pointed out, the federal government will run the exchange.

      • Eligibility for the credits and the actual amount depends on a family’s income level. It will help cover some or most of the cost of buying insurance through the exchange depending on which plan a person chooses.

      • Many of the major private insurance companies who already sell insurance in Oklahoma will likely offer plans in the exchange, though they may not have announced yet that they will do so. We are waiting on more details from the federal government as they finalize plans for each state.

      • There’s nothing to worry about regarding your 2012 taxes. There is nothing in the law that is currently in effect or that takes place starting in 2014 that would require you to have done anything special or different with your 2012 tax filings.

      • The new requirement under the law that people must have insurance does not kick in until 2014. People who choose not to buy coverage in 2014 will face a fine/penalty. Whether a person owes the penalty will be determined when they file taxes in the spring of 2015. The penalty will be lower in 2014 than in later years. Most importantly, though, people who cannot afford to purchase any health insurance option, including coverage in the exchange, will be exempt from the fine. A formula will be used to calculate whether or not any insurance available to you is “affordable.”

      • Also, in addition to the new exchanges, Medicaid will also become available to more people in 2014, depending on certain decisions a state must make. If a person’s income is below a certain amount (for example, less than $20,628 for a family with 2 people, less than $31,321 for a family of four people) they likely would qualify for Medicaid. Unfortunately, Oklahoma has thus far indicated it will not expand its Medicaid program.



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