Expanded choices, lower costs of health coverage are goals of insurance exchanges
Aug. 09, 2011
Individual consumers and small businesses will have broadened options, including subsidies and tax credits, when shopping for health insurance when statewide insurance exchanges come online in 2014.
New rules issued by the Department of Health and Human Services offer states guidance and flexibility on how to structure their exchanges, which aim to increase competition among insurance plans and bring about more affordable options.
The idea behind the exchanges is to make it easier for consumers to:
- Compare health plans based on price, benefits, cost-sharing and quality
- Get answers to questions about coverage options
- Find out whether they're eligible for private insurance tax credits or cost-sharing reductions, or for health programs like Medicaid or the Children's Health Insurance Program that make coverage more affordable
- Enroll in a plan
Generally, individuals would be eligible for subsidies to use on the exchange if their incomes are between 138 and 400 percent of the federal poverty level — between roughly $15,000 and $44,000 for individuals or $31,000 and $89,000 for a family of four in 2011. Subsidies are not available to individuals with access to other minimum essential coverage, such as Medicare, Medicaid, Children's Health Insurance Program or coverage offered through an employer.
However, individuals who get their coverage through an employer can qualify for subsidies if the coverage isn't of sufficient quality or it meets certain benchmarks as too costly.
Small businesses also will be eligible for a tax credit for coverage they purchase for employees through an exchange.
In Michigan, stakeholder workgroups organized by the Michigan Public Health Institute met earlier this year. MPHI recently presented the work groups' recommendations to the state, including a recommendation to create a single state exchange.
For more information, see the resources available at healthcare.gov:
The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.