With the November elections behind us, the way has been paved for the Patient Protection and Affordable Care Act (PPACA) to be fully implemented. For states and federal agencies, that means they have only 11 more months to prepare for millions of uninsured people to start signing up for coverage under the new healthcare exchanges, with open enrollment scheduled to begin October 1, 2013. Coverage under the new exchanges will be effective January 1, 2014, and the Congressional Budget Office (CBO) estimates that 22 million people will buy coverage through the public exchange system by 2016.
A key element of the new law, these new health insurance exchanges are intended to be competitive marketplaces where individuals and small businesses can choose from an array of affordable, comprehensive health insurance plans. If states elect not to establish an exchange or are unable to, the U.S. Department of Health and Human Services (HHS) will establish a Federally Facilitated Exchange (FFE) in that state. States can also choose to pursue a Partnership Exchange in which they work with the federal government in developing and operating the FFE.
So what’s the latest on the establishment of these exchanges?
While there’s still plenty of political and legal wrangling going on and many questions yet to be answered, HHS is starting to get a clearer picture of which states will be establishing their own exchanges, which ones will opt for the Partnership Exchange, and which ones are reluctant to go along with the whole concept.
The Associated Press recently reported that 17 states and the District of Columbia are on track to set up their own exchanges, while nine have decided not to do so. As for Medicaid, 11 states and the District of Columbia plan to expand their programs, while six states report they will not. That leaves more than 30 states undecided.
What about private exchanges?
While public exchanges under PPACA are intended to offer consumers more accessible and affordable healthcare options, states preparing to implement their exchanges will also have to take into consideration the role of the private exchanges already in operation. These private exchanges have been successful because they offer a wide range of products with regard to cost, design, benefits and network participation by hospitals and physicians.
There are more than 100 private exchanges in existence today, representing more than one-third of most insurance carriers’ distribution efforts, and they will need to co-exist with the new public exchanges to maintain an effective health insurance system. As far as meeting PPACA’s goals, private exchanges can help public exchanges…
- Provide coverage to more consumers
- Promote a stable insurance market
- Reduce unnecessary government expenditures
- Help maintain the right balance of insurance risk pools between insurance markets
- Provide a choice of quality health insurance coverage options
With the drastic changes in the healthcare system and the many uncertainties yet to be ironed out, employers and insurance brokers alike need to stay tuned to the latest developments from the Department of Health and Human Services and other government agencies.
For more detailed information about each state’s status with regard to the establishment of healthcare exchanges, go to
As health reform continues, HR professional will be challenged to keep up with the constantly changing landscape. One way to provide relief is by outsourcing COBRA administration. To learn more about the pros and cons of COBRA outsourcing, download our free report, “In Search of ROO – Return on Outsourcing.”