Exchanges

1. What is an exchange?
Basically, it's a marketplace where people, and small groups, can shop for health insurance. The exchanges for individuals and for small groups launched in October 2013. Simply stated, an exchange is a regulated marketplace, where the exchange selects the insurers allowed to sell policies and sets the minimum benefits those insurers must provide.
 
2. Who can use an exchange?
The law will allow individuals and small businesses (up to 100 employees) to purchase insurance through exchanges.
 
3. Would I have to buy through the exchange?
No, not unless you are receiving a federal subsidy.
 
4. Will large employers buy through the exchange?
Beginning in 2017, states will have the option to allow businesses with more than 100 employees to purchase coverage on the small business exchange.
 
5. Insurance is expensive. Will there be subsidies to buy coverage through the exchange?
Yes. Subsidies will be made available through premium tax credits and cost-sharing for those who qualify.

Beginning in 2014, premium tax credits will be available to eligible individuals and families with incomes between 133 and 400 percent of the Federal Poverty Level (FPL) to purchase insurance through the exchanges. The premium tax credits will be tied to the second lowest cost "silver" level plan in the area and will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels:

  • Up to 133 percent FPL: 2 percent of income
  • 133–150 percent FPL: 3–4 percent of income
  • 150–200 percent FPL: 4–6.3 percent of income
  • 200–250 percent FPL: 6.3–8.05 percent of income
  • 250–300 percent FPL: 8.05–9.5 percent of income
  • 300–400 percent FPL: 9.5 percent of income 

6. Who will oversee the exchange?
Exchanges will be administered by a governmental agency or non-profit organization. States can oversee exchanges on their own, form regional exchanges, or allow more than one exchange to operate in a state as long as each exchange serves a distinct geographic area.
 
7. What insurance benefits will exchange plans offer?
Qualified plans that participate in an exchange will be required to offer a uniform set of benefits defined by the Department of Health & Human Services and referred to as the essential health benefits. These benefits will be offered at four levels of value plus a separate catastrophic plan to the individual and small group markets.

  • Bronze plans represent minimum creditable coverage and provide the essential health benefits, cover 60 percent of the benefit costs of the plan, and have an out-of-pocket (OOP) limit equal to the Health Savings Account (HSA) current law limit ($5,950 for individuals and $11,900 for families in 2010).
  • Silver plans provide the essential health benefits and cover 70 percent of benefit costs of the plan, with the HSA OOP limits.
  • Gold plans provide the essential health benefits and cover 80 percent of the benefit costs of the plan, with the HSA OOP limits.
  • Platinum plans provide the essential health benefits and cover 90 percent of the benefit costs of the plan, with HSA OOP limits.
  • Catastrophic plans are available to those up to age 30 or those exempt from the mandate to purchase coverage and provides catastrophic coverage only with the coverage level set at the HSA current law levels. However, the prevention benefits and coverage for three primary care visits would be exempt from the deductible.
     

The questions and answers on exchanges are adapted from information from the Kaiser Family Foundation.

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