The Exchange: What You Need to Know February 29, 2012 Health Care Reform ACA, California health exchange, Health Benefit Exchange 0 As part of the federal health care reform legislation, known as the Patient Protection and Affordable Care Act (ACA), states were instructed to establish American Health Benefit Exchanges and Small Business Health Options Program Exchanges (collectively “the Exchange”). In September 2010, California became the first state to create a Health Benefit Exchange following the ACA’s passage. California’s Exchange is an independent public entity that is overseen by a five-member board appointed by the Governor and Legislature. The Exchange’s role in health care reform is to create a new insurance marketplace for individuals and small businesses to purchase health coverage. It’s important to note that not all health plans interested in offering a product in the Exchange will be eligible to do so. Based on criteria yet to be developed, the Exchange Board will select the plans eligible to be offered in the Exchange sometime in 2013. California’s Exchange is poised to have a huge impact on the state’s healthcare landscape in 2014 and beyond, with an estimated 8.3 million Californians eligible to purchase coverage on the Exchange in 2016. This represents an estimated 12 to 34 percent of California’s private insurance market. One of the most highly publicized provisions of the Exchange has been the “essential health benefits” package (EHB). The EHB is a set of benefits chosen by the state that will establish the scope of services provided by most Exchange-offered plans. Most plans may not impose benefit caps on services in the EHB. Additionally, the value of Exchange-offered plans will be categorized in levels (Platinum, Silver, Gold and Bronze) by their value as a percentage of the value of the state’s EHB. States are required to select one of four benchmark plan options by September 30, 2012. Preliminary studies suggest that, while covered services across plan choices may not vary greatly, cost-sharing and other coverage limits are likely to differ significantly. A number of major issues affecting physicians have yet to be decided, including the Exchange Board’s plan standards (higher thresholds are likely to result in fewer Exchange plans being available); how to handle individuals with frequently changing eligibility status (e.g., losing and gaining Medi-Cal eligibility); how to ensure plans offer the required adequate networks of providers; and finally, how the Exchange Board will pull all of this together before its target pre-enrollment date of July 2013. Currently, the Exchange board is still awaiting final federal regulations on the standards and the EHB – with both expected by fall 2012. Please click here for more information about the California Health Benefits Exchange. Comments are closed.
