Health Insurance Exchanges In The Usa: State And Federal Marketplaces

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Health Insurance Exchanges In The Usa: State And Federal Marketplaces

The COVID-19 pandemic has exposed and exacerbated inequities in the health insurance landscape During times of economic turmoil, millions of people have lost access to coverage due to unemployment, reduced work hours and incomes, and other challenges.

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The health insurance marketplace created by the Affordable Care Act (ACA) has served as a safety net by providing coverage options and financial assistance to the uninsured and those who have lost employment-based health insurance.

The ACA Marketplace aims to make it easier for people to shop and sign up for comprehensive coverage

Twenty states and the District of Columbia operate state-based marketplaces (SBMs), six of which rely on the federal marketplace website healthcare.gov as an online platform for eligibility determination, plan comparison, and other enrollment processes. Thirty states use the federally regulated market

SBM has a proven track record of investing in registration efforts and often achieves higher registration results than federally facilitated markets.

Federal Policy Priorities For Coverage: State Based Marketplaces

They have also enacted policies that improve coverage and access to care, including opening more special enrollment periods and implementing standardized benefit designs to reduce consumer confusion and increase access to services.

States operating their own markets have more autonomy than states in federally mandated markets, but SBM is still influenced by federal policies. And while premiums, enrollment and insurer participation in the individual market have stabilized over the past few years, the Trump administration's move to weaken the ACA has coincided with a rise in the uninsured and is likely to have lasting effects on both insurance rates and individual market premiums.

To assess how federal policy decisions have affected SBMs and the consumers they serve, and how future federal actions could improve the functioning and stability of their markets, we conducted structured interviews with directors and officers of 17 SBMs, including three SBMs that use HealthCare.gov. This brief explores key themes from these interviews and identifies how federal policymakers can support SBM's role as a comprehensive and affordable coverage source.

Several SBM directors have pointed out that since 2017, the federal government's efforts to block or cancel ACA awards have hampered SBM's efforts to increase and maintain enrollment.

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Some officials lamented the time and resources needed to respond to federal actions affecting the ACA. They identified numerous federal restrictions, including that insurers bill separately for the portion of premiums that cover abortion services (implementation that has been blocked by the courts) and inconsistencies in how revenue is calculated for Medicaid purposes and marketplace subsidies.

Officials have repeatedly sought to reassure the public that the Marketplace is a coverage option, despite federal policy and rhetoric. As one instructor noted, "How much better off we all would be. If I didn't have to spend money dealing with the confusion and misinformation that federal regulations and policies create."

Two federal policies have recently been seen as particularly troubling: the expansion of insurance plans that do not comply with the ACA and mass tax regulations.

The Trump administration has finalized regulations that expand the availability of coverage in markets that do not have to comply with the ACA's individual consumer protections. This cover includes short term insurance, time limited and association health plans The administration is also proposing legislation to encourage membership in health care delivery ministries — non-insurance systems that are not primarily regulated by the state or federal government.

Affording Health Coverage In 2014

Marketplace officials explained that non-ACA eligible plans attract higher sticker prices and may pass health screenings that gobble up healthy people while excluding people with pre-existing conditions, negatively impacting the marketplace's risk pool. Several executives pointed out that their states have limited the negative impact of certain products, particularly short-term, limited-term policies.

However, these officials are concerned that ACA-noncompliant products are often misleadingly marketed as low-cost alternatives to ACA-compliant plans, requiring SBM about the risk of obtaining coverage outside the marketplace, which could leave enrollees with significant medical bills for treatment.

SBM officials have urged federal action to reduce the presence of substandard products, reversing the Trump administration's efforts to promote these plans. An executive has proposed a federal policy to crack down on companies that use deceptive marketing tactics that misrepresent these products as having extended coverage.

The SBM director also pointed out that the Trump administration's changes in setting general tariffs have limited enrollment. Under the 2019 rule — prompted by ongoing litigation and a review by the Biden administration — the Trump administration added Medicaid to the list of benefits considered when assessing whether immigrants would be considered a "common charge" when seeking approval for permanent residency. This designation may prevent people with certain immigration status from becoming U.S. citizens Under the new policy, Medicaid use, with few exceptions, may be considered in determining the general fee.

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Although market participants are not directly involved in the new rules, most SBM officials report that the rules have had a negative impact on market registrations. The director described confusion about who the law applies to and how families with members of different immigration statuses can waive coverage to protect family members. Some officials say they have devoted resources to fighting secession, but face an uphill battle. "No matter how much money you put into it, people are still afraid, so they will risk death rather than not getting citizenship," said one executive.

SBM directors identified affordability as one of the biggest barriers to obtaining health insurance, highlighting high premiums and cost sharing as key areas for federal action.

Officials noted that reducing the cost burden would help increase market stability by providing coverage to SBs as well as encouraging robust enrollment and a broader, healthier risk pool. Directors emphasized two approaches: improved federal subsidies and federal reinsurance.

Although federal marketplace subsidies (along with many state programs) reduce monthly expenses and co-pays, SBM officials note that many people struggle to afford health insurance and needed care.

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The federal government funds tax credits to offset the cost of market premiums. This tax credit, also known as a premium subsidy, is available to US citizens. and legally provides 100 percent to 400 percent of the federal poverty level income to immigrants who enroll in Marketplace plans if they do not have other "minimum essential coverage."

Cost-sharing reductions are available for premium tax credit recipients enrolled in a rupiah-level marketplace plan between 100 and 250 percent of poverty. Cost-sharing reduces out-of-pocket costs with reduced deductibles and co-payments

Source: Pub. L. 111-148, 124 Stat. 782 (2010) §§ 1401-02 (26 U.S.C. § 36B; codified at 42 U.S.C. § 18071).

* Legally present immigrants with incomes below 100 percent of the poverty level, who cannot enroll in Medicaid because of their citizenship status, are also eligible for federal premium and cost-sharing subsidies if they meet other eligibility requirements. Minimum essential coverage includes Medicaid, Medicare and employer-sponsored insurance that meets affordability criteria.

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SBM directors strongly support cheaper federal premium subsidies Most directors recommended extending the subsidy to those with incomes above 400 percent of the federal poverty level. Some advocate raising the maximum family income level to 500, 600 or 800 of poverty, or removing the cap entirely and basing premium contributions on a percentage of income.

Officials cited the need to address the "subsidy cliff," a reduction in subsidies for people with household incomes above 400 percent of the current poverty line. Some suggest changing eligibility rules to create a "tray" by gradually reducing grant amounts at higher income levels. Other officials want to increase subsidies to those who currently qualify for the premium tax credit but still lack coverage; Most of those who are uninsured have incomes below 400 percent of the poverty level

Some officials have suggested increasing the premium subsidy by basing the amount on the gold-level market premium rather than the current practice with the silver-level premium; Along with increasing premium support, these changes will make gold plans, which typically share lower costs, more affordable. Directors are calling for other federal policies to combat high cost-sharing -- a major barrier to getting people insured -- such as increasing the eligible population for cost-sharing above 250 percent of poverty.

The ACA established a temporary federal reinsurance program that successfully held down premiums during the first year of the law.

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In the absence of federal reinsurance, 14 states—mostly SBMs—currently operate reinsurance programs that reduce market premiums.

Reinsurance subsidizes insurance companies for high-cost claims, allowing insurers to lower premiums for consumers. The ACA established a temporary reinsurance program between 2014 and 2016 that successfully lowered premiums without subsidies. State-level reinsurance programs, which receive most of their funding from the federal government, have also seen premium cuts.

Source: Justin Giovanelli et al., Benefits and Limitations

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