The Patient Protection and Affordable Care Act, commonly referred to as
Obamacare or the ACA, creates state-based health insurance exchanges for
individuals and small businesses to use to purchase health insurance. The
exchanges are organized market places providing a one-stop-shop for individuals
and small businesses to compare competing health plans and enroll in coverage
programs. The exchanges are an important pillar of the new health law and are
expected by 2019 to serve as the gateway for more than 29 million people to
obtain health insurance.
The new insurance marketplaces will provide consumers with
important information about various insurance plans, including:
• Covered benefits
• Provider networks
• Claims vs. administrative costs
• An electronic calculator allowing consumers to determine
their cost of coverage, including assistance from government
The ACA mandates that plans be standardized into four tiers, bronze, silver, gold and platinum,
with bronze plans being the least comprehensive and platinum plans offering the most coverage.
At a minimum, all plans must offer:
• Ambulatory patient services
• Emergency services
• Maternity and newborn care
• Mental health and substance abuse services
• Prescription drug coverage
• Rehabilitative services
• Laboratory services
• Preventative care
• Pediatric services, including oral and vision care
The health insurance exchanges will help to
streamline enrollment, offering annual open
enrollment periods as well as special
enrollment periods to account for changes in
status, such as the birth of a child, marriage,
etc. The exchanges will also work to direct
individuals eligible for Medicaid, CHIP or
other public programs to these services and
to decertify insurers who attempt to
discourage sicker individuals from applying.
Thanks to the exchanges, consumers will
have more information about their benefits
and their costs, allowing them to make
better choices with regard to their coverage.
Insurers participating n the exchanges are
required to provide consumers with a
summary of benefits, network availability,
cost-sharing examples, information on
claims payment policies and practices and
The ACA is designed to encourage quality improvement by requiring insurers to
report to the government and their clients on what programs they’re using to
improve health outcomes, reduce hospital readmissions, enhance patient safety,
reduce medical errors, promote wellness and reduce disparities in care. To
participate in the exchanges, insurers must meet requirements set forth by the
National Committee for Quality Assurance.
Regardless of whether an insurer participates in the
health exchanges or not, they will have to adhere to
some reforms intended to level the playing field and
prevent high-risk individuals from being dumped
entirely on the exchanges. These reforms include:
• Guaranteed issue and renewability of coverage
• Banning premium variation based on health status
or gender and limitations on variation based on age,
family size, tobacco use and geography.
• Minimum coverage regulations
• Banning lifetime caps on coverage
• Requiring plans to allow insureds to participate in
approved clinical trials.
State Participation Necessary
Success of the health exchanges may depend on individual states to ensure market
protections are enforced and financial assistance for the exchanges. The exchanges
can provide insurance consumers with a convenient and cost-effective method to
purchase health insurance, but only if state and federal governments stay active in
improving the technology and policy behind the exchanges.
About Coverage California
Coverage California helps to educated Californians about their health insurance options under
the Affordable Care Act and provides resources for them to find a plan that best suits their
needs. The new health care law is complex, and Coverage California helps consumers navigate
the marketplace to find the right policy.
For more information visit http://www.coverageca.com.