In less than 70 days, one of the fundamental components of the Affordable Care Act (ACA), or Obamacare as it is often referred to as, is set to begin.
On Oct. 1 of this year, open enrollment for the health insurance exchanges is slated to start.
The health insurance exchanges will be online marketplaces at which individuals and small businesses will be able to compare and purchase health insurance policies. They are intended to make the purchase of insurance more affordable and accessible.
There are two types of different state-based exchanges that are slated to be offered starting Oct. 1. U.S. citizens and legal immigrants who don’t have insurance through their employer or who don’t qualify for public assistance will be able to purchase an individual policy through the American Health Benefit Exchange.
Small businesses with up to 100 employees will be able to purchase coverage through another exchange, the Small Business Health Options Program or SHOP.
States have the option of running these two exchanges separately or as a single exchange that serves both individuals and small business.
Although the exchanges are intended to be run by states and must be administered by a government agency or nonprofit organization, if any state fails to set up an exchange by the beginning of 2014, the U.S. Department of Health and Human Services (HHS), either directly or through an agreement with a nonprofit entity, will establish and operate an exchange in the state.
This is one of the concerns as to whether HHS will be able to make the Oct. 1 deadline, since 27 states, including Georgia, do not intend to run a state-based individual health insurance exchange but instead will default to the federally run exchange. Utah will operate a SHOP, but the individual exchange will be federally run. The other 26 states will have a federally run individual and small business exchange.
Only 17 states and the District of Columbia are planning on running a state-based health insurance exchange for individuals. The other seven states are planning on having an exchange run in partnership with the state and federal government.
Although the exchanges will be available to everyone, those with incomes between 138 to 400 percent of the Federal Poverty Level (FPL), which is $23,052 for a family of four, will be eligible to receive premiums subsidies to help them purchase coverage through an exchange. The subsidies will be on a sliding scale and these individuals will also be able to receive cost-sharing subsidies to limit out-of-pocket spending.
Herein lies one of the major problems with the implementation of the health insurance exchanges by Oct. 2 — exchanges must have the capability of providing information on users’ eligibility for subsidies as well as automatically enrolling users in Medicaid or other low income programs if they so qualify.
So, as you can see, the exchanges are set up with subsidies in mind, further expanding entitlements in our country. In fact, the whole premise of Obamacare is to expand entitlements.
Currently, Medicaid eligibility is based on several eligibility categories such as income, resources, age, disability and pregnancy. Obamacare sets out to expand this by first of all increasing Medicaid to cover those up to 138 percent of the poverty level, then by setting up the exchanges and offering subsidies to buy coverage to those whose incomes are within 400 percent of the poverty level.
All of this, of course, will cost the federal government an enormous amount of money to finance.
We all agree that our country cannot stay the current fiscal course it is on. Entitlement reform must happen. Obamacare does just the opposite — it adds more entitlements. In less than 70 days …
Carter can be reached at 421-B State Capitol, Atlanta, Ga. 30334. His Capitol office number is 404-656-5109.