The Exchanges Really will Open Oct. 1st

Source: http://www.benefitspro.com
By Allison Bell
Photo: United States Mission Geneva / Wikimedia Commons / CC-BY-2.0

U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius on Friday assured yet another congressional panel that the Patient Protection and Affordable Care Act exchanges will be opening on schedule.

"We are moving ahead," Sebelius said at a House Energy and Commerce health subcommittee hearing on the HHS fiscal year 2014 budget request. "We are definitely going to be open for open enrollment starting Oct. 1 of 2013."

Federal fiscal year 2014 will start Oct. 1.

Sebelius has given similar assurances about progress at the HHS PPACA exchange development program at HHS budget hearings organized by the Senate Finance Committee's Health, Education, Labor and Pensions (HELP) Subcommittee and at the House Ways and Means Committee.

PPACA calls for HHS to work with state regulators to start exchanges, or health insurance supermarkets for individuals and small groups.

Senate Finance Committee Chairman Max Baucus, D-Mont., suggested at the HELP hearing Wednesday that it looks as if the exchange program may be headed for a "train wreck."

Congress has provided only $1 billion of the $10 billion that analysts originally said HHS would need to set up the exchange program, Sebelius said.

"We've judiciously used those resources," and efforts to set up the "Hub," the data center and call center to be at the heart of the exchange system, are going well, Sebelius said.

HHS will transfer money from prevention programs to fund exchange education and enrollment efforts, Sebelius said.

Rep. Frank Pallone Jr., D-N.J., said Sebelius should speak more frankly about the funding obstacles that Republicans have put in the way of PPACA implementation.

"They can't come back and criticize if the outreach doesn't occur if they're not funding it," Pallone said.

Republicans on the subcommittee asked whether Sebelius really has to use prevention fund money to pay for PPACA exchange outreach programs.

Rep. Michael Burgess, R-Texas, a medical doctor, asked Sebelius about the HHS decision to abruptly suspend enrollment in the Pre-existing Condition Insurance Plan (PCIP) program, a health insurance program for uninsured people with health problems that make buying medically underwritten coverage difficult.

He referred to a woman with lymphoma who said she learned HHS had shut down the PCIP program the day before she had been about to submit her application.

"Is it Obamacare or Obamadon'tcare?" Burgess asked. "Rather than spending [prevention fund money] on advertising for a program that may not even work on Oct. 1, or Jan. 1, why should we not transfer money from that fund to actually help the people that you promised to help -- the people with pre-existing conditions?"

Sebelius said Americans like the woman with lymphoma will benefit greatly starting Jan. 1, 2014, because, after that date, "no American will ever again be locked out of a health program because of a pre-existing condition."

PCIP was always supposed to be a temporary program, not a permanent solution, and it would not exist if the Republicans had succeeded with their many efforts to repeal PPACA, Sebelius said.

At another point, an exchange between Sebelius and Rep. Joe Pitts, R-Pa., the chairman of the health subcommittee, hinted at the problems that even members of Congress and their staffers may be having with keeping up with PPACA implementation details.

Pitts asked why the PPACA exchanges would not give small businesses a choice of health plans in 2014.

Sebelius had to explain that HHS has decided to let the Small Business Health Options Program (SHOP) small-group exchanges put off giving employers a chance to offer employees a multi-carrier coverage option.

Each SHOP exchange will still offer the employers themselves a chance to choose from a menu that includes plans from all of the carriers that have agreed to sell plans through that exchange, Sebelius said.

 


Understanding Exchanges Still a Struggle for Consumers

Source: http://www.benefitspro.com

By Kathryn Mayer

Yet another poll is out underscoring one of the main concerns over health reform — that consumers just don’t get it.

According to this survey, released Thursday by InsuranceQuotes.com, 90 percent of Americans don’t know when the new health insurance exchanges will open.

A major component of the Patient Protection and Affordable Care Act, the new health insurance exchanges will be available for online and telephone enrollments beginning Oct. 1. Coverage begins on Jan. 1, 2014. Exchanges are intended to give families and small-business owners accurate information to make apples-to-apples comparisons of private insurance plans and get financial help to make coverage more affordable if they’re eligible.

The exchanges are a core component of the individual mandate that will require all Americans to obtain health insurance or pay a fine. As a result, tens of millions of previously uninsured Americans are expected to gain access to health insurance.

The survey of roughly 1,000 U.S. adults found that 40 percent expect health reform to have a major effect on their lives, while 39 percent think the law will have a minor effect and 19 percent expect no effect.

The survey found that Americans were more knowledgeable about other aspects of health reform. For instance, 73 percent correctly answered that health plans cannot deny coverage based on preexisting health conditions. And 66 percent accurately said that health plans must extend coverage to dependent children up to age 26. Those two provisions have been among the most popular.

Still, insurance experts say having only some knowledge isn’t enough.

“A lot of people need to study up on health care reform and what it means to them,” said Laura Adams, senior insurance analyst at InsuranceQuotes.com. “We found a very inconsistent understanding of the Affordable Care Act, and we fear that many people will miss key deadlines and benefits because they don’t adequately understand the new law.”

Uninformed consumers who are unaware of what the exchanges do and what health reform means for them has been a huge hurdle of PPACA. It’s something that government officials are working to alleviate. In January, The Department of Health and Human Services relaunched healthcare.gov, a website aimed at informing consumers about the health reform law while giving them a place to purchase insurance.

In total, 39 percent of Americans said they are somewhat knowledgeable about PPACA, 28 percent said they aren’t too knowledgeable, 21 percent said they aren’t at all knowledgeable and only 10 percent said they are very knowledgeable.

The survey was conducted March 7-10 by telephone by Princeton Survey Research Associates International.

 


Young Adults Should Have Reasonable Plan Options On Exchanges

Source: http://www.kaiserhealthnews.org

By Michelle Andrews

As landmark dates approach in the health-care overhaul, readers are trying to figure out how the new insurance exchanges will work. Here are some recent questions:

Q. After the exchanges go live in 2014, will consumers still be able to buy individual health insurance directly from carriers, without going through those state-based marketplaces? I fear the rules of the plans operating within the exchange will make the premiums unnecessarily high for younger, healthy people.

A. Consumers will be able to buy individual health insurance next year either through the state insurance exchanges or on the private market. Regardless of where they buy a plan, however, all new individual policies will have to meet certain standards related to coverage and cost.

Under the law, premiums for older people cannot be more than three times higher than those for younger ones. Currently, the gap between how much younger, typically healthier people pay for coverage and how much older people pay is larger than that, leading some experts to predict that younger people's rates will skyrocket next year.

An analysis published last month by the Urban Institute suggests that will not happen. Although premiums will be higher for many young people under the new rules, this increase will have very little impact on their out-of-pocket costs, the study found. The reason: The vast majority of young people will be eligible for subsidized coverage -- through the exchanges, Medicaid or their parents' health plans. On the health insurance exchanges, premium subsidies will be available to people with incomes up to 400 percent of the federal poverty level -- $45,960 for an individual in 2013.

"If you're young, you do want to go on the exchanges because you'll qualify for subsidies," says Jen Mishory of Young Invincibles, an advocacy group.

In addition to enrolling in regular plans, people up to age 30 will have the option of using the exchanges to buy less expensive, high-deductible policies that protect primarily against catastrophic events. Although these policies might require large out-of-pocket payments by members -- the deductible probably will be more than $6,000, for starters -- they will be required to cover preventive care without any co-pay or cost sharing, and three primary-care visits will be covered even if the deductible has not been met.

Q. If employers stop providing coverage and employees have to purchase individual policies on or off the exchanges, do the employees lose the option to make pre-tax contributions to their health savings accounts?

A. You'll be able to make pre-tax contributions as long as you buy a policy that meets federal standards for plans that can be linked to health savings accounts.

This means a high-deductible policy. In 2013, HSA-qualified plans must have a deductible of at least $1,250 for individual coverage and $2,500 for a family plan, among other requirements.

The amount that individuals and their employers can contribute to the accounts limited to $3,250 and $6,450 for individual and family coverage, respectively. (The Internal Revenue Service makes cost-of-living adjustments to these and other limits annually.) Even if your employer no longer offers health insurance in 2014, any money in the HSA is yours to use for medical expenses.

Some of the policies offered on the exchanges may qualify as HSA plans, says Carrie McLean of eHealthInsurance.com, an online vendor. But it's too soon to know whether carriers will offer such plans or the exchanges will choose to carry them, she says.

Q. In 2014, can someone who works for a company drop his coverage and buy it through a state exchange instead?

A. Next year, most people will be able to choose to buy a health plan on the exchange. As I said above, individuals whose income is less than 400 percent of the federal poverty level may be eligible for a subsidy. This can make buying a policy on the exchange an attractive option.

But even if you meet the income requirements, you won't be eligible for a subsidized exchange plan unless your job-based coverage is considered unaffordable (because premiums for individual coverage cost more than 9.5 percent of the individual's income) or inadequate (because the plan covers less than 60 percent of allowed medical expenses).

Q. What's to stop people from just paying the individual mandate penalty and buying coverage when they need it, since insurers won't be able to turn them down because of a preexisting condition?

A. If you decide to drop coverage altogether, the penalty for not having insurance in 2014 will be either $95 or 1 percent of your taxable income, whichever is greater. To discourage people from waiting to buy insurance until they're sick, there will be an open enrollment period for buying coverage on the exchanges from October 2013 through March 2014. If you don't sign up during that time and you subsequently get sick, you won't be able to sign up until the following year in most cases.

 


What is an exchange and how does it work?

Source: http://www.liazon.com

An exchange is an online store where employees can purchase benefits. Exchanges offer multiple options of health insurance plans, and may also offer other benefits, such as dental, vision, life, disability, and other options. Exchanges that are "private" are run by industry, while "public" exchanges are run by the government.

In most cases, the employer uses a defined contribution strategy to give each employee a set amount of money to purchase benefits. The employees and their families can then go shopping in the exchange with the money allocated by their employer and add their own if needed. Depending on the exchange, employees can receive guidance and education about the plans to help them make purchasing decisions.