What is a health insurance exchange?

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The Health Insurance Marketplace, also known as the Health Insurance Marketplace, is a marketplace for comparing health insurance prices. Private health insurance companies list their health plans in an exchange, and people compare them in the exchange among the lists of available health plans.

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The term "health insurance marketplace" most often refers to government health insurance exchanges developed by the government under the Affordable Care Act (ACA, also known as Obamacare).

(There are also private health insurance exchanges, generally to serve employers who buy health insurance for their employees, but that's not what people usually mean when they say "health insurance market").

Public health exchanges are used to purchase ACA compliant individual and family health insurance plans ("individual and family" or "individual market" means health insurance that people buy on their own, as opposed to coverage through through an employer or a government program like Medicare or Medicaid).

And these exchanges are the only place where people can get premium subsidies and reduced equity participation, which serve to lower insurance premiums and cash costs for millions of eligible members (9.7 million people received premium subsidies through exchanges in 2021, and 5.4 million people received cost-sharing reductions ).

People who are eligible for Medicaid based on their income can register for Medicaid through the exchange in their state. Depending on the state, this can be done entirely through the exchange, or the exchange will refer them to the state Medicaid office after the preliminary eligibility determination shows that they are likely eligible for Medicaid.

In some states, small group plans for small businesses are also available through exchanges. But this segment of their market attracted few participants, and in May 2017 the federal government announced that they would stop using the small business admissions system (used in 33 states as of 2017) after the end of 2017.

Instead, small businesses in these states register directly with insurance companies or through a broker and pay premiums rather than make payments through the exchange. But SHOP certified plans through agents, brokers, and insurers are only available in limited areas in some of these states; most states that use HealthCare.gov simply no longer have SHOP-certified plans available due to low interest in the program.

But this article focuses on the ACA public health insurance exchanges and individual market health insurance plans, which make up the bulk of these exchanges' listings on private plans. These are plural "exchanges" because each state has an exchange. And while the word " market " conjures up a mental image of a physical place where shoppers go counter to counter checking merchandise from vendors, most people turn to online health insurance exchanges.

HealthCare.gov Plus 18 Government Platforms

States had the option of creating their own exchanges or relying on the federal government to create an exchange for them. Some states have hybrid exchanges that are a state-federal partnership or a state-run exchange that uses a federal registration platform (HealthCare.gov). As of 2021, there are 15 fully state-owned exchanges, six state-run exchanges using HealthCare.gov for registration, six state-federation partnership exchanges, and 24 federally managed exchanges.

The largest health insurance exchange, HealthCare.gov , is run by the federal government and serves health insurance buyers in 36 states in 2021 (including states that have government exchanges that rely on a registration platform managed by the federal government). government). The other 14 states and the District of Columbia have their own exchanges (for example, platforms like Nevada Health Link, Pennie, New York State of Health, and Connect for Health Colorado).

The three states using HealthCare.gov in 2021 (Maine, Kentucky and New Mexico) are moving to full state exchanges in fall 2021 and will no longer use HealthCare.gov for coverage in 2022 and beyond. Therefore, beginning with the 2022 target year, the District of Columbia and 17 states will have their own exchange platforms, while the remaining 33 states will continue to use HealthCare.gov.

Several other states are contemplating a similar transition over the next few years, so the number of states that rely on a federally controlled exchange platform is expected to decline over time.

Exchanges are registration portals, not your insurance company

It is important to understand that exchanges are just a market to buy coverage. If you buy health insurance from, for example, Covered California, Covered California is not your insurance company. Instead, your insurance company will be Health Net, Blue Shield, Anthem, or any other private insurance company that offers coverage through Covered California.

And to clarify another point that sometimes creates confusion, the terms "exchange" and "market" are used interchangeably. But the term "market" is used more widely.

So while a health insurance marketplace specifically refers to a portal in each state that people can use to compare different options and register, the term health insurance marketplace is much broader and can include plans sold off-the-market. and outside the employer. .. -sponsored plans , as well as parental and legacy plans (the latter two types of coverage are no longer available to new members, but are still valid for many employers and individuals who previously purchased them).

What is the difference between "stock" and "over the counter"?

If you buy a health insurance plan on the individual market, you will likely hear people refer to plans "on the market" rather than "without a prescription." An "exchange" plan is simply a plan that is purchased through an exchange. People can buy exchange plans on their own, or they can get help from a broker or browser (and in some cases, exchange plans can be purchased through an online broker's website or the website of an insurer; ask lots of questions if you work with a broker or a private website to make sure you get an exchange plan if that is your preference).

On the other hand, OTC plans are purchased without going through an ACA exchange in your state. They can be purchased directly from an insurance company or a broker. Premium and cost-sharing subsidies are not available if you purchase an OTC plan , even if you would otherwise be eligible. And you can't go back and claim the premium subsidy on your tax return if you bought the OTC plan, whereas you can if you buy the exchange plan and don't get the premium subsidy up front.

But in many cases, the plans themselves are identical or nearly identical, both on and off the exchange. All Individual Major Health Plans with effective dates of January 2014 or later must fully comply with the ACA, whether they are traded on or off the exchange . This part is important: Insurance companies cannot sell ineligible basic health insurance plans in a separate marketplace, even if they sell them off-the-market.

Depending on how your state has structured your exchange, exchange-traded health plans may need to meet additional requirements beyond simple ACA compliance (for example, some states require exchange-traded plans to be standardized, with the same set of specific benefits offered by each insurer). ).

Some insurers choose to offer their plans for sale only on the exchange, others only offer them off the exchange, and still others offer plans both on and off the exchange (note that Washington, DC does not allow the sale of plans outside the the bag; ACA – Eligible individual and small group health plans can only be purchased there through DC Health Link , the county health insurance marketplace).

Non-ACA plans are sold off the bag

Plans that are currently traded off-exchange but do not qualify for the ACA generally fall into the 'excluded benefits' category, which means that they are specifically exempt from ACA rules and, by definition, are not care organizations. important medical separate. health insurance. Excluded benefits include short-term health insurance , limited benefit plans, fixed benefit plans, accident allowances, serious illness / specific illness plans, and dental / vision insurance.

There are several other types of coverage as well, including Health Sharing Departments and Farm Bureau plans in several states , including Kansas, Iowa, Tennessee, Indiana, and South Dakota. that are not considered health insurance and therefore are not subject to health insurance rules and regulations.

Some of these plans, including short-term plans, shared health ministry plans, and agricultural office plans, are designed to be used as stand-alone health insurance for at least a short period, although all have gaps in coverage compared to HERE. – The corresponding plans are some more than others. The rest of the excluded benefits are for additional coverage. Exempt benefits and "uninsured" plans are available off the market in most areas (and dental / vision plans are available in exchange in many areas).

Who can use the exchanges?

All US citizens and residents with legal residence who are not incarcerated or enrolled in Medicare are eligible to purchase a health plan in exchange for the state in which they live. Undocumented immigrants cannot register for insurance coverage through exchanges, even without premium subsidies .

In some states, small businesses can also purchase insurance coverage on the exchange (in most states, this is limited to businesses with up to 50 employees). ). Note that in states that use the HealthCare.gov small business exchange, the exchange no longer handles registrations, but instead invites businesses to register directly with insurers. Some government exchanges take this approach as well, so the availability of small group health insurance on exchanges is quite limited.

As a result of Grassley's amendment to the ACA, members of Congress and their staff should receive coverage in return. To meet this requirement and ensure that Congress and employees do not lose their employer contributions, the government has created an alternative solution that allows Congress and employees to sign up for small group plans through DC Health Link. …

In April 2017, DC Health Link reported that approximately 11,000 members of its small groups were members of Congress and their staff. The annual open admission period for members of Congress and their staff is one month in the fall. This is the enrollment window for employer-sponsored coverage, so it is not the same as the open enrollment period that applies to people who purchase their own health insurance through DC Health Link.

How many people have access to ACA exchanges?

At the end of open enrollment for coverage in 2021 (which ended December 15, 2020 in most states), the total number of exchange participants in individual market plans was just over 12 million, including enrollments. through HealthCare.gov and 14 states. make exchanges.

Actual enrollment (i.e. current policies) in early 2021 was roughly 11.3 million people. The effective registration is always less than the number of people who register during open registration, as there are always people who do not pay their initial fees or cancel their insurance shortly after registration.

But 2021 was an unusual year due to the COVID / American Rescue Plan registration period, which lasted at least six months in most states. In most parts of the country, this window lasted until at least August 15, 2021, and allowed people to sign up for insurance coverage without a related life event, even if open enrollment had ended months earlier. More than 2.8 million people were covered during this extended enrollment window in 2021. Many of these new members were interested in enrolling because of the expanded premium subsidies available as a result of the American Rescue Plan.

Small businesses can participate in plans through exchanges, but there were fewer than 200,000 people on small business exchange plans nationwide in 2017. – the vast majority of ACA members have individual market coverage.

How Health Insurance Exchanges Work

Exchanges are designed to increase competition and facilitate comparison shopping. Insurance companies compete for your business on the stock market. This direct competition is designed to lower the cost of premiums . Exchanges / markets make it easy to compare plans using the apples-to-apples approach:

All health insurance policies offered through exchanges provide a minimum set of basic health benefits , although the specific coverage offered will vary from state to state, depending on the monitoring plan you are using. (Covering essential health benefits is part of ACA compliance. As such, the basic over-the-counter personalized health plans available in your area will also cover major health benefits):

Standardized plans are available on exchanges in some states. On the California Stock Exchange, all plans are standardized.

All health insurance policies offered in exchange must meet one of five benefit tiers: catastrophic , bronze , silver , gold , or platinum . The benefit level of a policy (bronze, silver, gold or platinum), both externally and externally, describes the percentage of the average covered health care costs that the plan will pay, also known as the actuarial value (AV) of the plan. You can learn more about how these benefit tiers work in the article Bronze, Silver, Gold, and Platinum: Understanding the Metal Tier System .

In most of the country, there are few or no platinum plans available in the individual / family market. Silver and Gold plans are available in all regions of the country (insurers offering plans on the exchange must offer at least levels of silver and gold) And almost every county in the United States has bronze plans.

Catastrophic plans cover less than 60% of the cost of basic health benefits for the standard population, but must still meet the ACA's out-of-pocket limit . Disaster plans also include three pre-deductible primary care office visits, and some preventive care is fully covered as with all ACA eligible plans. Everything else applies to the franchise and is covered only after compliance.

Both internally and externally, catastrophic plans are only available to those under the age of 30 or those eligible for an exemption from having to purchase insurance coverage (although there is no longer a federal penalty for not having coverage, the mandate itself still exists. and an exemption is still required to purchase a disaster plan if you are 30 or older).

The exchanges provide subsidies for health insurance payments. Health insurance exchanges are the only point of access to government subsidies ( tax breaks ) that make health insurance more affordable for Americans with modest incomes. You can apply for a government health insurance subsidy through your health insurance exchange and the subsidy is only valid for health insurance purchased from the health insurance exchange. Learn more about health insurance subsidies at Can I get help paying for health insurance? '

Even if you think you are eligible for a premium subsidy but are unsure due to fluctuations in your income, you should consider purchasing the plan through an exchange. You can pay the full price and then come back later and claim the subsidy (since it's really just a tax credit) on your tax return. But you won't be able to do this if you bought the plan out of the bag.

This is especially important to understand for 2021 and 2022, as the American bailout plan has made subsidies much larger and more affordable. But to benefit from this additional financial assistance, you must be enrolled in an exchange health insurance plan.

In addition to premium subsidies, cost-sharing subsidies (also known as cost-sharing reductions ) are also available only if you purchase the Silver plan through an exchange in your state. If your income qualifies you for cost sharing and / or premium subsidies, you will want to register through exchanges (rather than registering an OTC insurance company) to take advantage of the assistance available.

How to find a health insurance exchange

Your state may have its own health insurance marketplace, like California, Covered California . Or, your state may have decided not to create a health insurance exchange or create an exchange, but to use a federal registration platform. In this case, residents use the federal government exchange at HealthCare.gov.

The following states have their own registration websites, although you can visit them by starting HealthCare.gov and clicking on your state or entering your zip code:

In each state, trade (and off-trade) registrations are limited to an annual open registration period (November 1 – January 15 in most states) and special registration periods triggered by qualifying events.

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