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The key to accessing affordable health insurance options for individuals and small businesses under the Affordable Care Act are state health insurance marketplaces. Health insurance carriers, which state insurance commissioners and the Centers for Medicare and Medicaid Services (CMS) have approved, are listed in the exchanges. They provide different Qualified Health Plans (QHP) that provide comprehensive coverage for a broad variety of healthcare services (Centers for Medicare and Medicaid Services, n.d.). Additionally, the health insurance marketplaces serve as the gateways for Medicaid and the State Child health Insurance Programs.
While health insurance marketplaces will differ as to the health insurance companies offering the health insurance plans, the exchanges work in a similar manner. Many small business owners and individuals who obtain health insurance in the health insurance marketplace will be eligible for subsidies and tax credits to offset the cost of premiums and out of pocket expenses (Centers for Medicare and Medicaid Services, n.d.).
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Competition Makes Health Insurance Affordable
The theory underlying the health insurance marketplace is that the competition among health insurers will keep the cost of plans affordable. Currently, many people who do not have health insurance benefits find the only way they can afford an individual health insurance policy is to purchase plans with high deductibles and co-pays. Individuals with these plans typically find themselves insured, but unable to access health care services because of the high cost of out of pocket expenses (Todd, 2012). To address this barrier to healthcare, insurance plans offered on the health insurance exchanges must meet certain benchmarks that define how much the health insurance plans pay for the covered benefits and the essential health benefits included in the health insurance policies.
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Essential Health Benefits and Defined Coverage Amounts Provide Savings
When individuals and small businesses compare health insurance plans offered in the health insurance marketplace, they will find that the plans provide free preventative health care services. In addition, the plans must offer essential health benefits for the following services:
- Outpatient Services
- Emergency Services
- Inpatient Diagnostic and Treatment Services
- Maternity and Newborn Care
- Mental Health, Behavioral Health, and Substance Abuse Services
- Prescription Drug Coverage
- Rehabilitation Services and Devices
- Laboratory Services
- Prevention, Wellness and Chronic Disease Management
- Pediatric Services
Each state defines the specific essential health benefits offered on the health insurance exchanges. State insurance commissioners and CMS use a benchmark health insurance plan, which is typically the small health insurance group plan in the state with the highest enrollment, to determine the essential health benefits. Additionally, the plans must cover at least 60 percent of the cost of the healthcare benefits offered by the plans (Centers for Medicare and Medicaid Services, 2012).
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Accessing the Health Insurance Marketplaces
Beginning Oct 1, eligible individuals can begin to access the health insurance marketplace. This includes individuals who cannot afford health insurance plans offered by their employers because the cost is more than 9.5 percent of their gross W-2 income, uninsured and small business employers. By completing an application, either online, by mail, or in person, individuals and small business owners can find out what health insurance options are available to them.
People who need assistance have the option of working with a Navigator, who are typically located in community centers or at in non-profit agencies. The Navigator is a CMS trained expert who can educate individual about the health insurance marketplace and the options for health insurance coverage (Centers for Medicare and Medicaid Services, n.d.).
Health insurance marketplaces will offer affordable, high quality health insurance options that provide coverage for most healthcare services. The effective date of coverage for these plans is January 1, 2014.
- Centers for Medicare and Medicaid Services. (n.d.). In-Person Assistance in the Health Insurance Marketplace. http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/assistance.html
- Centers for Medicare and Medicaid Services. (n.d. ). Will I Quailify to Get Lower Costs? https://www.healthcare.gov/will-i-qualify-to-save-on-out-of-pocket-costs/
- Centers for Medicare and Medicaid Services. (n.d.). The Center for Consumer Information & Insurance Oversight: Qualified Health Plans. http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/qhp.html
- Centers for Medicare and Medicaid Services. (2012). Essential Health Benefits Standards: Ensuring Quality, Affordable Coverage. http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/ehb-2-20-2013.html
- Todd, S. A. (2012). Overview of the Uninsured in the United States: A Summary of the 2012 Current Population Survey Report. Washington, DC: U.S. Department of Health and Human Services. http://aspe.hhs.gov/health/reports/2012/uninsuredintheus/ib.shtml