The Patient Protection and Affordable Care Act (PPACA) is a bit of a mystery to many Americans. It’s safe to say that very few people have sat down to read the whole thing. At GoHealth, we consider it required reading! Heck, we’d go as far as to call it a real “page turner!” We are making it our business to explain the changes that are expected to go into effect as of 2014 one step at a time.
Today we will discuss the concept of health insurance exchanges. These exchanges are new concepts created by the Affordable Care Act and will be key players in the new way Americans buy health insurance coverage. There are a few different types of exchanges – state run, multi-state and consumer operated and oriented plans. No idea what we’re talking about? No worries, you’re not alone. Let’s discuss.
What are health insurance exchanges?
Exchanges are new state run organizations that will be created in order to provide a more organized and competitive way to purchase health insurance. Consumers will be able to see several different options and compare rates and coverage details easily (much like GoHealth.com does).
In addition, exchanges will act as information resources for consumers of health insurance, providing information about all the different options and answers to any questions that buyers may have.
What type of consumer will use a health exchange?
U.S. citizens and legal immigrants who are not imprisoned are eligible. Exchanges will serve individuals, families and small businesses with up to 100 employees. If you have health insurance through your employer, you can either keep it or shop around through an exchange and pick a new plan.
What is a Multi-State Health Exchange?
Some states may choose to not operate their own health insurance exchanges, but to become part of a multi-state or regional exchange. Enrolling in a multi-state exchange would give you access to health care in all the different states that are included in your plan.
What is a Consumer Operated and Oriented Plan?
Certain organizations are expected to want to set up non-profit, member-run health insurance companies. If they meet eligibility requirements, these organizations will receive federal funds to operate. Many key requirements will determine eligibility to become a Consumer Operated and Oriented Plan (CO-OP). The most distinct requirement is that all profits must be used to lower premiums, improve benefits or improve the quality of health care to members.