The Health Insurance Marketplace: A new way to shop and purchase health insurance

As part of the Affordable Care Act, consumers will be able to purchase health insurance from the Health Insurance Marketplace (formerly referred to as the Exchange), beginning in October. Coverage will be effective Jan. 1, 2014, and after.

Each state will have an opportunity to have its own Marketplace, either run by the state in partnership with the U.S. Department of Health and Human Services or independently by the state, according to federal and state laws governing health care. Michigan’s Health Insurance Marketplace represents a partnership between the state and the federal government.

When launched, the Marketplace will enable consumers to compare prices and coverage between eligible insurance plans. This tool will allow consumers to select the plan that best suits their budget and their health care needs. Consumers will still be able to purchase health insurance coverage directly from health plans, such as Blue Cross Blue Shield of Michigan and Blue Care Network.   

As a provider, odds are that your patients are going to treat you as a primary source of information regarding health care reform, especially the Marketplace. The following information is designed to help you answer some basic questions.

The Health Insurance Marketplace in a nutshell
The Health Insurance Marketplace is a website that will allow consumers to compare prices and coverage from different health plans that have met certain government requirements for eligibility in their area. Once a health plan is selected, consumers can either make their purchase through the Marketplace or continue to purchase health coverage directly from health plans.

The Marketplace opens Oct. 1, 2013, for the selection and purchase of health coverage that will be effective beginning Jan. 1, 2014. There will be two different Marketplaces:

• Individual Marketplace — For consumers purchasing coverage on their own
• Small Business Health Options Program, also known as SHOP — For businesses with 50 or fewer full-time-equivalent employees

Michigan’s Health Insurance Marketplace will be located at healthcare.gov**.

Requirements for health plans to be part of the Marketplace
Requirements vary from state to state, but there are a few important federal requirements that health plans must meet in order to be included on the Marketplace. Plan must offer comprehensive coverage, including preventive visits with no cost-sharing, essential health benefits (listed below) and prescription drug coverage. Plans eligible to participate in the Marketplace must follow limits on cost-sharing and other rules to receive certification as a qualified health plan.

Impact on the cost of health coverage
Qualified health plans on the Marketplace must state all costs up front, so consumers will know exactly how much they will be paying for coverage, and can select the plan that offers the best value for their situation. The Marketplace is expected to create open competition among insurance plans, which could result in lower prices for some plans.

How plans are organized on the Marketplace
Plans will be listed by the following categories: bronze, silver, gold and platinum. Catastrophic plans will also be offered. Bronze plans will offer coverage for the lowest monthly premium; deductibles, coinsurance and copayments will be higher than the other plans. The highest level plans, gold and platinum, have the highest monthly premiums; however, deductibles, coinsurance and copayments will be lower. Consumers will have to estimate how often they use health care to decide which plan is best for them. Catastrophic plans, with a very high deductible, will also be available to individuals.

Regardless of category, each plan must offer coverage for the following essential health benefits***:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health, substance abuse and behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services (including dental and vision care)

Health plans may impose cost-sharing on essential benefits, but must offer preventive care with no cost-sharing.

Cost-sharing structure:

• Bronze: pays approximately 60 percent of covered health care costs
• Silver: pays approximately 70 percent of covered health care costs
• Gold: pays approximately 80 percent of covered health care costs
• Platinum: pays approximately 90 percent of covered health care costs (available for small groups only)
• Catastrophic (for individuals only): Generally requires you to pay all medical expenses up to a certain amount. These plans usually have a high deductible.

Resources for those who struggle to afford health care
Some individuals will be able to get some kind of discount on costs for coverage at the silver level, even those who were previously ineligible for assistance. There is a single, universal application on the Marketplace that anyone can fill out to see the discounts for which they are eligible.

There are two types of assistance available to those purchasing insurance through the Marketplace:

• Cost-share Reduction Subsidy — The federal government pays a portion of the consumer’s cost-share, thereby reducing the deductible, copayments, coinsurance and out-of-pocket maximum costs for the member. This subsidy is based on household size and is only available to individuals who meet specific financial eligibility criteria (currently between 133* and 400 percent of the federal poverty level and who purchase a silver product through the Individual Marketplace.
• Advanced Premium Tax Credit Subsidy — The federal government pays a portion of the consumer’s health care premium. This subsidy is only  available to individuals who meet specific financial eligibility criteria ( currently between 133* and 400 percent of the federal poverty level) and who purchase health coverage through the Individual Marketplace.

Note: Health insurance subsidies can be offered for people with incomes up to $94,200 for a family of four (based on 2013 figures).

*In Michigan, this could be lowered to 100 percent if the state of Michigan does not expand Medicaid coverage.

The information above is provided for informational purposes only. Providers do not need to do anything different for patients who receive subsidies.

Where consumers can get additional assistance
The Marketplace offers around-the-clock customer service representatives available to assist consumers with any questions. Call 1-800-318-2596.

Most consumers are eligible to use the Marketplace
As long as consumers live in the U.S., are U.S. citizens or nationals and are not currently incarcerated, they are eligible to use the Marketplace.

For more information on the Health Insurance Marketplace, please visit healthcare.gov**.

**BCBSM does not control this website or endorse its general content.

***Source: healthpocket.com/affordable-care-act/essential-health-benefits