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What are exchanges under obamacare?

Here's what you need to know...
  • Obamacare works through state-sponsored insurance marketplaces
  • Obamacare has a national website a Federal Insurance Marketplace
  • Insurance exchanges review and approve insurance plans
  • Insurance exchanges offer qualified health plans during Open Enrollment
  • Exchanges provide plans that meet the Individual Mandate

The health insurance exchanges are a vital part of the Affordable Care Act, and it is where most consumers have direct contact with Obamacare. Exchanges provide a place for consumers to review, consider, and select health insurance plans that meet their needs, and that satisfy the individual mandate. Comparison shopping provides a focus for consumers to find insurance plans that work well for them. Comparison shopping puts a plans side by side to view the features that matter most to the individual or family consumer. Start comparing health insurance plans now by using our FREE tool above!

State Exchanges

The ACA authorized the creation of state-run exchanges. These organizations would also work with the expansion of Medicaid and CHIPs to protect those with incomes below 138 percent of the federal poverty guideline. In conjunction with the powers of the states to create and regulate insurance businesses, the state exchanges have a potentially powerful position to influence the prices and content of qualified health plans, and to promote competition.

Federal Exchange

Healthcare.gov is the federal exchange website. It rolled out with some difficulty as would be expected from such a massive project. Thereafter, it has served the residents of 36 states as the exchange for states that failed or refused to provide an insurance marketplace for their citizens. Healthcare.gov is the portal for sign up during open enrollment; it is a source of information, counseling, and assistance. It offers live assistance both online and by telephone. It supports sign up in all four ways, as listed below:

  1. Paper sign up by mail
  2. Paper sign up as Obamacare locations
  3. Online sign-up during open enrollment
  4. All forms of sign up using special enrollment periods- Life Events.

Types of Plans

The federal government developed a structure for qualified health plans, and they must al have the essential health benefits. The system creates groupings based on actuarial value. The four groupings gather plans at the respective levels of 90 percent, 80 percent, 70 percent, and 60 percent levels of insurance paid plan costs. A goal of this labeled system was to make it easier for consumers to compare plans. The below listed items describe the four types of insurance:

  • Platinum Plans: offer high coverage by insurance, more than 90 percent, and low out of pocket costs, co-pays, and deductibles.
  • Gold Plans: provides high levels of insurance coverage of plan costs. They cover more than 80 percent of costs. The premiums are higher than Silver and Bronze plans, but deductibles and co-pays are lower.
  • Silver Plans: offer a great combination of payment assistance, premium subsidy, and health savings accounts
  • Bronze Plans: offer low premiums; considering prices with the tax subsidy, many subscribers pay less than $100 per month.
    Catastrophic Plans: are emergency type coverage plans with limited availability. They cover major health events.

State Exchanges Oversight Roles

The role of state exchanges is to be the level of government that is close to the situation of its residents. Many states have sparsely populated and rural areas in which medical services may be in short supply. The distribution of hospitals, clinics, and research institutions may be quite uneven across a state. The state exchanges are in the position to find the best harmony given the local situations here some areas have many providers, and other areas have few or none.

  • Review Insurance provider proposals for health plans
  • Work actively or passively to lower prices
  • Work actively or passively to increase services
  • Work with insurance providers to promote coverage throughout their States
  • Work to promote competition in every area of their states

Exemptions

Exchanges handle requests for exemptions from the individual mandate tax and penalty provisions. These include hardship exemptions as well as exemptions for those who do not meet the minimum threshold for taxation.

The state exchange can accept requests for exemption based on the costs of health insurance.

The federal regulations provide exemptions for those who face high costs for health insurance. The exchanges can grant exemptions when the costs of health insurance exceed eight percent of annual income.

Life Events

After the close of the Open Enrollment, those without coverage can no longer apply. The exception recognized by the ACA regulations is for changes in status called Life Events. They include significant changes in life circumstances that in fairness require a new opportunity to sign up. These status changes include marriage, divorce, loss of insurance as a dependent, and loss of insurance due to job loss. The ACA regulations accept the birth of a child and adoption as changes of status that create special enrollment periods.

Basic Exchange Functions

Exchanges accept and approve qualified health plans from insurance providers. These plans meet the requirements of the ACA and the individual mandate. The exchanges during open season offer sign up, options for change of plans, and health plan renewals. The exchanges also handle income qualifications. They make beneficial referrals to CHIPs and Medicaid for those who do not qualify because of income below 138 percent of the federal poverty guideline.

Exchanges Make Obamacare Work

Whether it is expanding services by assisting a CO-OP or driving down prices by active negotiations, exchanges play a critical role in Obamacare’s health care reforms. They are the primary source of qualified health plans and the operation of financial assistance that makes health insurance affordable for millions of Americans. To get the most from the plans and information services offered by the federal and state exchanges, one must use comparison shopping. The exchanges also urge consumers to shop carefully and, particularly higher income earners, to shop off the exchange as well. Comparison shopping helps consumers find the best match. Start comparing health insurance plans now by entering your zip code in our FREE tool below!

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