If you think that the election marked the end of the health care reform debate, then you will be surprised to find out that the decisions that affect your coverage are still being debated.
What will your health benefits look like?
To avoid tax penalties, you are required to purchased a government-approved plan that provides certain minimum standards of coverage. This is going to be the case whether you are purchasing your health plan from a state exchange, a broker, or directly from an insurance company. It holds true for individual plans that you acquire for yourself, and for group plans sponsored by your employer. And, it would still be the case if you get coverage through the Medicaid expansion.
This minimum standard of coverage required by the health care reform law involves 10 health care categories known as the “Essential Health Benefits.” Some states have gone ahead setting their own benchmarks for coverage, but everyone is still waiting for the administration to provide clearer guidelines to help the states come up with these essential benefits. The typical plan will be more benefit-rich than that which most people currently purchase, so premiums are expected to go up also. We don’t know how much yet, but expect it to average 30-50 percent.
Who is going to be covered?
The decisions of the state governors and the Obama administration will help determine who will benefit from the provisions of the Affordable Care Act. The act allows those earning more than $11,170 a year, but less than 400 percent of the federal poverty level, to use subsidies to purchase coverage from state health insurance exchanges. And anyone with pre-existing conditions will qualify to purchase coverage starting in October.
In the wake of the Supreme Court’s decision upholding the legality of most provisions of the law, states now have the option to reject the Medicaid program expansion, which would provide affordable health care to adults below 65 earning roughly $1,300 or less in a month. The law does not explain what will happen to states that do not participate in the Medicaid expansion.
When are we going to get answers?
Enrollment through state exchanges will start October 1, 2013 and coverage will take effect January 1, 2014. This means that state exchanges have to start operation in less than a year. States have the option to run a fully state-based exchange, enter into a state-federal partnership exchange, or default into a federally-facilitated exchange. I predict a total mess, with many states and the federal government not being ready when the time comes.
The Affordable Care Act mandates that the Secretary of Health and Human Services (HHS) establish a federally-facilitated exchange in any state that is either not able or willing to establish a state-run exchange. In a federally-facilitated exchange, HHS will be performing all exchange-related functions. States entering into a partnership with the federal government to operate the exchange may administer plan management functions, in-person consumer assistance functions, or both. HHS will perform the remaining exchange-related functions. We expect the premiums to be higher in states with federally run exchanges, though the governors of those states may be making very smart financial decisions for their state budgets.