State of the states: insurance exchanges

Health insurance exchange costs remain unclear

By Jan Greene
healthinsurance.org™ contributor

The bottom line for most consumers remains unclear because it's still early – how much will health plans sold through the exchanges cost? That's impossible to know until the exchanges – also known as health insurance marketplaces – are actually built and insurers decide whether and how they will get involved.

We do know that the exchanges will provide a range of plans with varying levels of benefits, from 60 percent to 90 percent of the "actuarial value" of the benefits.

Also, some work remains for federal regulators to decide some big-picture questions for all exchanges, such as what the basic benefits package will be for all plans sold on the exchange. Clearly, the more robust the benefits package, the more insurers will want to charge.

Remember too that the health reform law includes subsidies for low-income people to buy private health insurance. If your income is between 100 percent and 400 percent of the federal poverty level ($22,350 for a family of four in 2011, so the top level would be about $88,000 yearly income), you will be eligible for a reduction in your premium.

You may also be more likely to qualify for Medicaid coverage, as that program is to be expanded under reform, to cover people up to 133 percent of poverty level.

If you get insurance from an employer, the exchanges could eventually affect you – states have the option of eventually including larger employers (above 100 employees) in the exchanges.

Another open question is whether consumers will be required to buy health insurance, as envisioned by health reform. The constitutionality of that provision is being challenged in court; the U.S. Supreme Court is expected to decide that issue around June 2012. Even if the requirement is struck down, exchange supporters argue that having a consumer-friendly marketplace for buying health coverage would still make it easier for many currently uninsured people to come in from the cold.

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