|By Kristi L. Nelson, The Knoxville News-Sentinel, Tenn.|
|McClatchy-Tribune Information Services|
This is what the health care insurance marketplace is supposed to look like next year, according to standards set by the Affordable Care Act, passed in 2010. A small part of the far-reaching health care reform act deals with so-called "exchanges," new ways to simplify buying health insurance and make it affordable for more people.
All about exchanges
Under the ACA, each state will have its own exchange, sometimes referred to as the "health insurance marketplace," with several health plans available from various private and nonprofit companies. Though the coverage won't take effect until
The federal government gave states three options for setting up the exchanges. States could choose to implement their own exchanges, making all decisions on coverage and administration within certain federal guidelines. Or they could forfeit this right and let the federal government run its "default" exchange in the state, charging the state a percentage of premiums. Or states could "partner" with the federal government, using the standard federal exchange but administering some parts of it through state government.
Yet at the federal government's
"There would be significant risk involved with taking on an exchange while your department is still developing the rules of the game or if the federal government is ultimately going to control the more important levers," Haslam said in a letter informing U.S. Secretary of Health and Human Services
And while several groups have speculated that a state-federal hybrid exchange isn't completely off the table, Haslam's office declined to address that specifically. Spokesman
The different types of exchanges work basically the same way. But states that establish their own exchanges can decide which insurers can participate, while the federal exchange will accept any plans that meet guidelines. State-established exchanges also could put more emphasis on certain benefits.
Who will use the exchanges?
At first, only individuals and employees of companies with 100 or fewer workers can buy insurance on the exchanges. Most people will be eligible for subsidies to help them pay their premiums. Most Americans will still get insurance through their employers. Undocumented immigrants cannot buy insurance through the exchanges, nor would they qualify for
What products will be on the exchanges?
Plans will be offered by different insurers at four standardized "levels": bronze, silver, gold and platinum. The coverage for all plans at a given level will be the same, but costs and providers could differ. Bronze plans have the lowest premiums and cover 60 percent of bills; platinum plans have the highest premiums and cover 90 percent of bills. Silver and gold fall in between.
The federal government will require all plans to cover "essential benefits," which will include hospital, emergency, maternity, pediatric, prescription drug and lab services, among others. Out-of-pocket expenses will be capped. Insurers will have to take all comers and can't charge more based on gender or pre-existing conditions. (Older customers can be charged up to three times more than young ones.)
It's expected most of the same players from the commercial insurance market will compete on the exchange: for-profit insurers like
"At this point, it's safe to say we plan to put multiple products at each level," said
But there will be one new player on the exchange: Each state can have (though not all states do) a private, nonprofit Consumer Operated and Oriented Plan, commonly called a CO-OP.
In August, the federal government approved
The CO-OPs differ from traditional cooperatives in that they're not member-owned but are "community assets," Burgess said. They differ from insurance companies in that they're not accountable to investors and are governed by a board of directors made up of consumers who are elected to the position by customers. They're akin to health cooperatives like
Like traditional insurers, the CO-OP will have to manage risk, making sure the premiums it takes in are enough to cover the services it pays for, though in the CO-OP's case, the federal government is sharing in some of the risk. The loan is intended to help mitigate the administrative costs associated with starting a new company, which is likely to start with 100 or fewer members, compared to several hundred thousand at a well-known company like BCBS.
"I think people will come to look more locally for insurance," Burgess said. "We think we're going to be more innovative, more flexible, more consumer-oriented" than larger, established companies.
How will people use the exchanges?
Burgess has visited a co-op program in another state and compares it to
And as easy as that system might sound to someone who's used
Beginning in 2010, states could receive grants to build or expand programs that would provide such help.
But states, aided by federal funds, will be required to establish specific "navigator" help programs by the time the exchange begins, contracting with at least one nonprofit agency. Navigators must be able to understand culture and language of different groups of state residents. Details are still being outlined.
It's already working on a plan that would connect grass-roots nonprofits that already are helping
"We're talking about people who maybe never carried insurance before and don't know what all those terms mean," he said. "We're talking about hundreds of thousands of people who will need help."
Because the population using the exchanges isn't necessarily stable -- it includes people who go in and out of
At the same time, it will include self-employed customers or small-business owners who simply have never before been able to find affordable insurance. Now, Burgess said, they will have multiple options.
How will things change in the insurance world?
The ACA lays out a host of new requirements insurers must meet. They must provide certain preventive services with no co-pays. They can't deny coverage based on pre-existing conditions, rescind payment based on a technical error on an insuree's application, limit the amount of some benefits in a year or a lifetime, or charge more based on gender or health conditions. They must reinvest large profits into maintaining quality services or lowering premiums; if they don't, they must provide their customers a rebate. Insurance paperwork will become standardized and easier to understand.
But the biggest change has to do with customers more than insurers. Because of the way people will buy insurance under the new regulations, they'll become more savvy, said
Young said health care costs historically have been so "buried," consumers with insurance policies haven't known how to uncover them and therefore haven't comparison-shopped for treatment.
"Suddenly, customers ... are going to requesting more information" about procedures and billing, Young said. "They're going to want to ensure that they're getting their money's worth. ... They're going to be online, looking up their test results -- a lot of things."
Summit has already adopted some "best practices": an online "patient portal," for example, that lets patients look up medical records, and the "medical home" concept, in which primary-care doctors and specialists take a team approach in care, sharing information and working together on a single plan for the patient's health.
"We are preparing for a future that's much more quality- and outcomes-driven with a consumer behavior, as opposed to what we're doing today," Young said.
And that requires a "culture change" for providers, he added, changes from leadership and management all the way down the line -- always a challenge.
"It's a tough industry right now," he said.
Young and Burgess both expect patients to be more proactive in managing their own health, in behaviors they can adopt or change to reduce their risk for expensive, complex medical problems. Both insurers and providers will step up the education they're already doing, they predict, and insurers will offer incentives for healthy choices. Some already are doing so.
"People don't realize this yet, but there's going to be a much great emphasis ... on having better health," Burgess said. "They're going to be much more aware of the price (of health care) and how their lack of taking care of themselves impacts that."
Timeline on the ACA
Health Reform explained
Who Health Reform hits
Health care reform: How does the Affordable Care Act affect you?
Health care reform: Exchanges to offer marketplace for health care
Health care reform: Timeline for Affordable Care Act
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