07 Jan State and Federal Exchanges – do you know what they actually are?
Not sure what an insurance exchange is?We have the information – in plain English – here for you.
According to the U.S. Department of Health and Human Services (HHS):
An Exchange: “ (I)s a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality.” Great, but what does that mean?
• Basically, each state will have an exchange with specific minimum coverage offered in all plans.
• Each plan offered will fit into one of four benefit tiers for ease of comparison.
• People can use the exchange to compare plans and access federal subsidies and tax credits to make it more affordable for each person or family.
This doesn’t mean that the exchanges are a one size fits all type scenario for health care – as a one stop shop, they are going to have multiple plans for people to choose from. It will be similar to a health insurance quoting website, but with subsides discounting the plan costs.
So, what’s the purpose of a state/federal exchange?
• It’s meant to provide low-cost or affordable insurance as part of the Affordable Care Act (ACA).
• The exchanges will help low and middle income families or individuals gain access to subsidized health insurance.
• Families or individuals can receive the subsidy based upon their income – up to 400% of the Federal Poverty Level.
• People will be offered guaranteed-issue insurance, meaning they cannot be denied or charged more due to pre-existing conditions.
The goal of PPACA (commonly referred to as Obamacare) is to offer coverage to more people “by pooling people together, reducing transaction costs and increasing transparency, exchanges create a more efficient and competitive market for individuals and small employers” according to the HHS. Whether these goals will be met depends upon each state’s actual exchange and the implementation of PPACA.
If you or your company is looking for additional information on confusing terms or just need clarification on the lengthy reforms, don’t hesitate to give the Barrow Group a call. We have specialists on hand who are always up to date and ready to help. Also, we are the only agency endorsed by the United States Staffing Association – take a look and get more information at http://www.usstaffing.org.