What might Idaho's new Health Insurance Exchanges look like?
Obamacare (ACA or Patient Protection and Affordable Care Act) is here to stay, thanks to the President’s reelection. It’s a certainty that the law will be phased in by 2014, and everything will change.
One important part of Obamacare are the Health Insurance Exchanges or HIX, also known as American Health Benefits Exchanges. An exchange is a set of state-regulated and standardized health care plans, from which you may purchase health insurance eligible for federal subsidies. The policies will still be offered by private insurance companies, who will be allowed to participate in the exchanges if their policies conform to regulations. All state exchanges must be fully certified and operational by January 1, 2014, otherwise the federal government will step in and create an exchange. Individuals within income range between 133 percent and 400 percent of the federal poverty level are able to receive federal subsidies in the form of tax credits to purchase this insurance.
The insurance exchanges will shift a greater amount of financial risk to the insurers, but will help to share the cost of that risk among a larger pool of insured individuals. Massachusetts, Utah and New York had exchanges up and running before the PPACA was passed. Texas and California have failed exchanges.
Major requirements affecting insurers in the individual exchanges:
1. Guaranteed issue: The ACA’s prohibition on denying coverage for pre-existing conditions will begin in 2014. Until that time, the ACA provides funds for state-run high-risk pools for those with previously existing conditions.
2. Limit to price variations: prices will vary based on four factors (including age and smoking) and not beyond a total factor of approximately 10
3. Plans will be offered in four comparable tiers ranging from bronze to platinum with limited out of pocket expenses
4. Strict regulations on rescission
5. Lifetime and annual limits eliminated
Idaho’s legislature voted 50-15 to reallocate federal funds which had been intended for use in creating Idaho’s HIX. States creating their own exchanges will have some discretion to set the essential benefits that must be provided by insurers. States without HIXs will be subject to a federally administered HIX. So far Idaho does not plan to create its own HIX. On Oct 26 2012, Governor Otter’s 13-member health insurance exchange working group said Idaho should pursue a state-based health insurance exchange for 2014. Governor Otter did not comment on the situation before the election.