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- State-run exchanges were implemented by the ACA
- The exchanges are insurance marketplaces for each state
- SHOP is a program designed for small businesses
- The exchanges come in different forms, depending on the state
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The term “state-run exchange” refers to the public exchanges implemented in each state according to requirements set forth in the Affordable Care Act. “Healthcare exchange” is industry jargon for the different insurance marketplaces available to insurers, employers, and members. As of 2017, 28 states have a federally-facilitated marketplace, six have a state partnership marketplace, five run a state-based marketplace-federal platform and 11 states, including Washington D.C., run a state-based marketplace.
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The Four Types of State Exchanges
In a state-based marketplace, the state governs the websites hosting the different coverage options available for consumers, employers and employees in the individual market. The states classified as state-based marketplace-federal platform run the in a similar manner, they just operate on the Marketplace IT platform facilitated by the federal government. For small businesses, most states run the Small Business Health Options Program, better known as the SHOP marketplace.
States in the partnership marketplace are limited to administering consumer assistance in-person or conducting plan management. Human Health Services is responsible for performing the remainder of the marketplace functions. States operating under a federally-facilitated marketplace have all of the marketplace functions performed by Human and Health Services.
Special Cases and Exceptions
In Utah and Mississippi, the state operates SHOP and the individual marketplace is ran by the federal government. In addition, New Mexico and Arkansas administer their own SHOP marketplace online that employers and employees can use. States with HHS approval for conducting plan management activities for certified qualifying health plans under the federally-facilitated marketplace include Virginia, South Dakota, Ohio, Nebraska, Montana, Maine, and Kansas.
Framework for State Marketplaces
Sections 1311(b) and 1321(b) of the ACA allow each state to establish an exchange that serves as a platform to purchase SHOP for small businesses or qualifying health plans for individuals and employees. Only states with adequate resources are permitted to assist both groups as a singular organization. These exchanges are required to establish standards and regulations, as well as a survey that evaluates enrollees’ satisfaction.
States that failed to establish an operational exchange by 2014 had a federally facilitated exchange implemented according to the requirements established under Section 1321(c). The state-run exchanges, commonly known as health insurance marketplaces, may simply be described as price comparison websites that allow consumers to purchase insurance that can be granted exemptions, receive subsidies from the fed and qualify as minimum essential coverage.
The online marketplaces provided by the different states offer consumers assistance 24 hours a day, seven days a week. These websites make it easy for the average person to enroll, switch or sign-up for a plan in a matter of minutes.
For the dozens of states without their own exchange established, consumers can shop for a qualified policy on healthcare.gov. For those earning under than 400 percent less than the Federal Poverty Level, cost assistance may be available through the marketplace.
Cost Assistance in State Marketplaces
For consumers who earn 100 to 400 percent less than the FPL, this help could include reductions in premiums through tax credits. Consumers earning under 138 percent of the FPL and living in a state with Medicaid expansion, may be able to qualify for Medicaid. For those on Silver plans and earning from 100 to 250 percent less than the FPL, out-of-pocket assistance may be available through the state-ran exchange.
Understanding the Exchanges
If the exchange is not solely managed by the state or the federal government, the state may choose to conjoin with the government or another state on forming a marketplace. Despite the different ways the states and federal government form these exchanges, the end-users all shop for their insurance in a similar manner so the process is relatively simple for all involved.
In order to receive insurance through one of the state-run exchanges, consumers most obtain the coverage during the open enrollment period lasting from November to February or qualify for a special enrollment period.
State Exchanges for U.S. Consumers
The only way for consumers to qualify or access cost assistance for their health insurance is by applying through the state-ran exchanges. The state exchanges were designed to provide more than 50 percent of the uninsured with a means to get free or low-cost healthcare through their local state exchange.
Coverage options in the state exchanges are often classified as metal plans, with the most precious metals representing the most premium insurance packages. The Silver plans are the only metal plans to provide the Cost Sharing Reduction subsidies that can qualify consumers for out-of-pocket assistance.
Some of the primary requirements for all state-ran exchanges include no annual dollar or lifetime limits and providing the ten essential benefits to policyholders. The state-ran marketplace plans are also designed to have a minimum actuarial value of 60 percent, out-of-pocket maximums and cap deductibles. The plans available in the state healthcare exchanges are also required to offer annual wellness visits and free preventive services as well.
State-run exchanges are designed to provide more options for consumers who can not afford some of the high premium costs that have been associated with private healthcare in the past. The implementation of the state-run exchanges may be described as the embodiment of the what the ACA was all about.
Even though there were exchanges established in every state in the country, consumers still have the option of selecting from the private exchanges available as well.
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[su_spoiler title=”References:” icon=”caret-square” style=”fancy” open=”yes”]
- http://kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/?currentTimeframe=0
- https://www.gpo.gov/fdsys/pkg/FR-2013-06-19/pdf/2013-14540.pdf
- http://obamacarefacts.com/state-health-insurance-exchange/
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