Ryan A. Crowley, BSJ; Thomas G. Tape, MD
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Current Author Addresses: Mr. Crowley: American College of Physicians, 25 Massachusetts Avenue NW, Washington, DC 20001-7401.
Dr. Tape: Division of General Internal Medicine, University of Nebraska Medical Center, 986430 Nebraska Medical Center, Omaha, NE 68198-6430.
Author Contributions: Conception and design: R.A. Crowley.
Analysis and interpretation of the data: R.A. Crowley.
Drafting of the article: R.A. Crowley, T.G. Tape.
Critical revision of the article for important intellectual content: R.A. Crowley, T.G. Tape.
Final approval of the article: R.A. Crowley, T.G. Tape.
Administrative, technical, or logistic support: R.A. Crowley.
Collection and assembly of data: R.A. Crowley.
Crowley RA, Tape TG. Health Policy Basics: Health Insurance Marketplaces. Ann Intern Med. 2013;159:784-786. doi: 10.7326/0003-4819-159-10-201311190-00724
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Published: Ann Intern Med. 2013;159(11):784-786.
Starting on 1 October 2013, most individuals and small businesses will be able to shop for and enroll in health insurance coverage through their state's health insurance marketplace, also known as an exchange. The health insurance marketplaces will serve as a one-stop resource to help the uninsured and the underinsured find comprehensive health coverage that fits their needs and budget and determine whether they qualify for health insurance tax credits provided by the Patient Protection and Affordable Care Act. Physicians may benefit because insured patients are more likely to have a regular source of care, adhere to medical regimens, and access preventive care. However, implementation of the marketplaces may prove challenging if enrollment numbers are insufficient, technical problems arise, and patients are unable to access providers. Despite these potential issues, physicians are encouraged to educate themselves about how the marketplaces work so they can direct their patients to find the coverage that best meets their medical needs.
Health insurance marketplaces, also referred to as exchanges, will soon be a key feature of the U.S. health care system. The purpose of the marketplaces is to help the uninsured obtain health coverage as part of the implementation of the Patient Protection and Affordable Care Act (ACA). Although enrollment begins in October 2013, many people are unaware of what is coming and what they will need to do. This policy brief provides information on how marketplaces will work and the implications of health insurance exchanges for patients and physicians.
In the past, shopping for health insurance could be a daunting and confusing experience. Those purchasing health insurance on their own faced health insurance plan choices with varying and often inadequate benefits accompanied by excessive premiums and deductibles. The hope is that marketplaces will enable individuals to make “apples-to-apples” comparisons of private health plans that meet minimum standards and enroll in the one that best suits their health needs and budget. Many will qualify for subsidies to make insurance more affordable. Small businesses will also be able to shop for and purchase health insurance for their employees through the marketplace.
Beginning in 2014, most individuals who do not already have health insurance will have to acquire health insurance or pay a fine. The marketplaces created under the ACA will be open to legal residents who are not currently incarcerated and to businesses with up to 100 employees. Starting in 2017, states may open the marketplaces to larger employers who want to purchase insurance for their workers. Patients will be able to access the marketplace through a Web site, via a toll-free call center, or with the help of specially trained consumer assistance professionals. Individuals can also use the marketplace to determine whether they are eligible for Medicaid coverage and, if they qualify, be referred to the appropriate state agency to enroll.
States may elect to operate their own marketplace, have the federal government run their state's marketplace, or partner with the federal government and share responsibility for health plan management or consumer assistance duties. In 2014, 16 states and the District of Columbia will be running their own marketplaces, and 7 states will collaborate with the federal government in a partnership marketplace (1). Twenty-seven states defaulted to allow the federal government to operate their exchange, although some states are acting as “silent partners” on certain activities, such as health plan management and oversight. Utah has been approved to run its own small business health insurance marketplace, and the federal government will operate the state's individual marketplace. Marketplaces are intended to provide the same functions regardless of whether they'e operated by the state, federal government, or both.
To be sold through the marketplace, a plan must be certified as a “qualified health plan.” Qualified health plan issuers must be licensed in the state in which the plans are sold, and plans must provide an essential health benefit package consisting of services within 10 benefit categories (Table. Plans will be offered in 4 tiers (bronze, silver, gold, and platinum) distinguished by the level of coverage provided. Although out-of-pocket costs are capped, plans have flexibility in setting rates, deductibles, and copayments if the overall value meets the tier standard. Limited-benefit catastrophic care plans will be available to people younger than age 30 years and some people with low incomes. Qualified health plans must follow the ACA's insurance market reforms (such as prohibitions on preexisting condition limitations) and marketing and provider network rules. Eventually, marketplaces will also rate health plans on the basis of quality and cost of benefits.
Table. Essential Health Benefit Categories for Qualified Health Plans
Starting in January 2014, U.S. citizens and legal residents who are uninsured or underinsured (their current job-based coverage is less generous than a bronze tier plan) will be able to claim an advance, refundable, sliding-scale tax credit that will help make marketplace-based insurance more affordable. To qualify, modified adjusted gross annual income must be between 100% and 400% of the federal poverty level: $11 490 to $45 960 for an individual and $23 550 to $94 200 for a family of 4 (2). Those with incomes up to 250% of the federal poverty level will also be eligible for cost-sharing subsidies. People with incomes up to 138% of the federal poverty level, or about $15,850 for an individual, will be able to enroll in Medicaid if their state has chosen to expand coverage. Small businesses may be eligible for a tax credit to help them purchase health coverage for their employees through the small business marketplace.
Marketplace enrollment is voluntary, but people can use premium tax credits and cost-sharing assistance only for qualified health plans offered through the marketplace. The Congressional Budget Office estimates that by fiscal year 2023, 24 million people will be enrolled in market-place-based coverage, 19 million of whom will receive premium tax credits (3).
Community-based consumer assistance organizations called navigators will raise awareness about the marketplaces and will be available to help patients apply for coverage, shop for and compare qualified health plans, and enroll in the plan that best fits their needs. Health care providers, such as community health centers and hospitals, may apply to become certified application counselors and train to assist patients in filling out enrollment applications. Marketplaces must be prepared to assist those with limited English proficiency and individuals with disabilities.
More than 48 million Americans were uninsured in 2011, and millions more were covered by insufficient insurance (4). Uninsured adults are less likely to receive preventive services, more likely to die of serious acute conditions, and more likely to experience financial hardship connected to medical care than those with insurance (5). The ACA's coverage expansion seeks to help reverse these negative consequences. Marketplace-based coverage must limit out-of-pocket costs and provide essential health benefits, and it cannot restrict coverage on the basis of preexisting conditions or vary premiums according to health status. Once the marketplaces are fully implemented, patients can compare health plan premiums, cost-sharing, benefits, provider networks, and quality ratings and then enroll. They can also determine whether they are eligible for tax credits or Medicaid coverage.
The reformed health insurance landscape may also present challenges. Many people have low awareness of the ACA's health coverage provisions and may not understand the law's impact (6). Many have limited knowledge of how health insurance is structured and how cost-sharing works, undermining their ability to make informed decisions about plan choice and budgeting (7). An efficient enrollment process depends on the data hub—the information technology used to verify eligibility information, such as Social Security numbers and immigration status. Problems with the data hub could slow eligibility determinations and information sharing among states and the federal government (8, 9). Although subsidies increase the affordability of marketplace-based insurance, coverage may remain costly for persons who receive smaller subsidies. In addition, many low-income patients residing in states that have chosen not to expand Medicaid will not be eligible for marketplace-based subsidies.
Insured patients are more likely to have a regular source of care, enabling better adherence to treatment regimens and early intervention of illness (10). Patients will have access to a wider range of services, including preventive care, without cost-sharing. Consequently, physicians are likely to benefit because their patients will have the coverage they need to obtain medical services and access a regular source of care. The potential for bad debt may be reduced along with the rate of uninsured care.
Despite the potential benefits of a stable health insurance marketplace, physicians should be aware of potential marketplace issues. Qualified health plans must meet network adequacy and essential community provider access standards to help ensure that patients have access to services in a timely manner. To control costs and keep premiums low, insurers may be forming smaller provider networks containing fewer physicians and other health care professionals (11). Marketplace-based plans may pose administrative challenges for office staff, including collection of deductibles and copayments and payment for services rendered to a patient whose coverage has been terminated for failure to pay insurance premiums. This issue may be further complicated by the wide variation in deductibles and copayments. In addition, it is unclear whether the current physician workforce will be able to absorb the newly covered patients.
Marketplaces will be up and running on 1 October 2013, to begin open enrollment for qualified health plans. On 1 January 2014, qualified health plans and Medicaid expansion coverage will begin, tax credits will be distributed, insurance regulations will be implemented, and most legal residents will be required to have health coverage. Initial open enrollment for the marketplaces ends on 31 March 2014. For benefit years beginning on or after 2015, open enrollment is from 15 October to 7 December of the preceding calendar year. Special enrollment periods are available for those who experience a significant life event, such as the birth of a child or loss of job-based health coverage. Those who miss the open enrollment period and do not qualify for special enrollment may seek coverage outside of the marketplace or apply for Medicaid.
To answer basic questions patients may have, physicians should educate themselves and their staffs about the ACA's coverage provisions. However, physicians should refer their patients to a navigator or other certified entity trained to provide health coverage information and assistance. Information on navigators and other assistance personnel can be found at www.healthcare.gov or through your state's health insurance marketplace. The American College of Physicians has developed an education and enrollment outreach campaign to provide members with state-specific resources related to the ACA coverage expansion. The College has also developed information for patients on how to learn about and enroll in health coverage. The materials can be accessed at www.acponline.org/advocacy/state_health_policy/aca_enrollment.
Physicians can also refer patients to www.healthcare.gov, the hub for federally run marketplaces, to learn about options and prepare for open enrollment. Posters, brochures, fact sheets, and videos about the marketplace are available at marketplace.cms.gov for physicians who wish to provide these materials for patients in their practices.
Health care reform presents major opportunities and challenges. For the first time, patients will have access to a marketplace to purchase high-quality, comprehensive health insurance. The ACA should enable millions to enroll in health insurance coverage, many for the first time. Physicians need to know what to expect and should encourage their patients to seek out and enroll in the coverage that best suits their family's needs.
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