Monday, February 11, 2013

State-by-State Health Insurance Exchange Decisions

Obamacare calls for the creation of state administered health insurance exchanges, where Americans without employer-provided coverage can shop for insurance policies.  Enrollment is scheduled to begin October 1, 2013 and coverage too take effect in 2014.

Those with incomes between 133% and 400% of the federal poverty level - up to $92,200 for a family of four - will qualify for federal subsidies.  Running an exchange could therefore get pricey.
States were given the choice of creating their own exchanges, partnering with the federal government, or permitting the federal government to completely run the state exchange.  Deductibles for all plans will be capped at $5,950 for individuals and $11,900 for families, with the limits adjusted over time for inflation.

Note:  under Obamacare prescription drugs are an essential health benefit, but with the high deductibles most patients will be paying out-of-pocket for prescription medications.  Depending upon the employer, this can be a good or bad thing.

The Department of Health and Human Services (HHS) dictates that all policies sold on the exchanges must meet one of four classifications:  platinum, gold, silver and bronze.  These categories indicate plan coverage for the average person as 90%, 80%, 70% and 60%, respectively.  

The auditing firm KPMG recently found that Ohio can expect to spend $63 million to set up its exchange and another $43 million each year to run it.  States will also need to provide call centers, navigators (sales personnel) and coordinate computer systems brokers involved in selling coverage.

The federal law indicates that states with their own exchanges must devise a source of revenue for running the exchanges, independently, beginning in 2015.   Where will this revenue come from?  

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