How Will Health Insurance Exchanges Affect You

I have received a number of questions about the new American Health Benefit Exchanges the PPACA authorized.

Each state will have its own Exchange with its own rules.  The PPACA allows the federal government to set up an Exchange only when the state governments fail to do so.  In 2010 every state except Alaska and Minnesota accepted federal grant money to start working on implementing the new Exchanges.

The Exchanges are not required to be active until 2013.  With close to 3 years until they are required to be effective and another national election in 2012, anything is possible.  As you hear rumors, remember, anything you hear at this point in time is pure speculation.

The Exchanges are discussed in several areas of the PPACA.  Below is section 1312 of the new law and addresses the rumor that all citizens are going to have to purchase their health insurance through the new Exchanges.

(d) EMPOWERING CONSUMER CHOICE.—

(1)     CONTINUED OPERATION OF MARKET OUTSIDE EXCHANGES – Nothing in this title shall be construed to prohibit—

(A)  a health insurance issuer from offering outside of an Exchange a health plan to a qualified individual or qualified employer; and

(B)  a qualified individual from enrolling in, or a qualified employer from selecting for its employees, a health plan offered outside of an Exchange.

(2) CONTINUED OPERATION OF STATE BENEFIT REQUIREMENTS.— Nothing in this title shall be construed to terminate, abridge, or limit the operation of any requirement under State law with respect to any policy or plan that is offered outside of an Exchange to offer benefits.

(3) VOLUNTARY NATURE OF AN EXCHANGE.—

(A) CHOICE TO ENROLL OR NOT TO ENROLL.—Nothing in this title shall be construed to restrict the choice of a qualified individual to enroll or not to enroll in a qualified health plan or to participate in an Exchange.

(B) PROHIBITION AGAINST COMPELLED ENROLLMENT.— Nothing in this title shall be construed to compel an individual to enroll in a qualified health plan or to participate in an Exchange.

(C) INDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN.— A qualified individual may enroll in any qualified health plan, except that in the case of a catastrophic plan described in section 1302(e), a qualified individual may enroll in the plan only if the individual is eligible to enroll in the plan under section 1302(e)(2).

(D) MEMBERS OF CONGRESS IN THE EXCHANGE.—

(i) REQUIREMENT.—Not withstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are—

(I) created under this Act (or an amendment made by this Act); or

(II) offered through an Exchange established under this Act (or an amendment made by this Act).

(ii) DEFINITIONS.—In this section:

(I) MEMBER OF CONGRESS.—The term ‘‘Member of Congress’’ means any member of the House of Representatives or the Senate.

(II) CONGRESSIONAL STAFF.—The term ‘‘congressional staff’’ means all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC.

What this means to you is that you will still have freedom to purchase health insurance plans outside of the American Health Benefit Exchanges provided they meet the qualifications established by the Secretary of Health and Human Services.  Everyone will be required to purchase a plan that meets the definition of a bronze, silver, gold or platinum plan as defined by the Secretary of HHS.  They may be purchased through either one of the new Exchanges or outside of the Exchange through an insurance agent or broker.  The only people required to purchase their health insurance through the Exchanges will be members of congress and their staffs.

In other words, nobody knows at this time exactly how the new American Benefit Exchanges will operate but we do know that consumers may elect to purchase their health insurance through them or through other sources, if they prefer.

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