The Affordable Care Act (ACA), otherwise known as Healthcare Reform, or “Obamacare” makes major changes to our healthcare system. One of the major change is the creation of state “Insurance Exchanges” to help facilitate the purchase of insurance. Insurers are now also required to comply with new market reforms and the Medicaid program has been expanded.
In December of 2012, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) issued a helpful information sheet you can download here: FREQUENTLY ASKED QUESTIONS (FAQs). It covers Medicaid and Insurance Exchanges, two somewhat blurry topics in the Affordable Care Act.
Starting in 2014, Medicaid will face national expansion. With these changes, almost all adults under 65 with family incomes that are 133 percent of the poverty level (FPL) would qualify for Medicaid.
The Supreme Court ruled to limit the Fed’s ability to penalize states that don’t comply with Medicaid expansion, so now this is optional. States will receive their standard federal contributions for individuals who were already eligible for Medicaid coverage in their state, even if they don’t comply with the law.
Federal Matching Funds
The federal government will cover 100 percent of a state’s cost for the first 3 years and eventually go down to 90 percent.
The attached FAQ download covers more details of the Medicaid expansion.
HEALTH INSURANCE EXCHANGES
The Affordable Care Act also requires states to provide an Exchange where individuals and small businesses can buy health insurance. The Exchanges be available by Jan. 1, 2014, and will start accepting applications for insurance on Oct. 1, 2013.
Exchanges for each state may:
- Establish its own state-based Exchange
- Have HHS operate a federally facilitated Exchange (FFE) for its residents
- Partner with HHS so that some FFE Exchange functions can be performed by the state
State-based and State Partnership Exchanges
- The downloadable FAQs detail deadlines and federal funding
Federally Facilitated Exchanges
If a state lags in setting up its Exchange, a federal one will be implemented in that state. The FAQs state that HHS intends to work with these states to preserve the traditional responsibilities of state insurance departments when establishing FFEs. HHS plans to coordinate with the states to take advantage of regulatory efficiencies, such as relying on states with effective rate review programs for rate review of qualified health plans.
The FAQs address other topics of healthcare reform:
Medicaid Bridge Plan – States could ease the transition for consumers out of Medicaid or CHIP coverage using a bridge plan. It would be certified as a Medicaid managed care plan, but could continue to offer coverage through a single insurer and provider network to households transitioning out of Medicaid, or that have children in Medicaid or CHIP and adults in the Exchange.
The Navigator Program – Navigators are organizations or individuals, that will receive grants to educate and help people understand their new options for insurance.
ISU-ERM Insurance Brokers will continue to monitor health care reform developments and will provide updated information as it becomes available.
If you have questions, speak to an expert at (949) 222-0444