You all know the story by now. On March 23, 2010 President Obama signed the Patient Protection and Affordable Care Act into law, otherwise known as "Obamacare," which created the soon-to-launch Ohio Health Insurance Exchange.
In addition to that, it also abolished all pre-existing conditions, set a defined list of 10 essential benefits all health insurance plans must cover and mandated every eligible American to carry a certain level of health insurance.
With these new changes comes new questions. There has been a lot of uncertainty floating around surrounding these new laws. Let’s see if we can’t help clear that up by tackling 13 commonly asked questions about the laws most ambiguous creation.
1. What is the Ohio Health Insurance Exchange?
A health insurance exchange is simply a fancy, and possibly more complicated, way of saying Amazon for health insurance. It’s a website that will allow you to access quotes from all the participating insurance companies in the state. Now you might be thinking to yourself, “it’s 2012, you can’t buy health insurance online yet?” Actually you can, Giangola Insurance already has a place where you can buy health insurance directly online from all of Ohio’s major health insurance companies.
2. So What is all the Fuss About?
Proponents of the exchange system argue that health insurance is too complicated and there are too many plan options for the average consumer to adequately purchase a policy on their own. Right now, in Ohio, you would have over 400 or 500 different plan variations available to choose from at anytime. You might be saying to yourself, “I like options” no one has ever complained about having too many ice cream flavors to choose from, why is it a problem with health insurance?
3. Why are Options a Problem?
Let’s take a look at two of the leading technology companies today, Apple and Microsoft. Apple is a company that offers a highly controlled experience, which means they offer a very limited number of product options. You can buy the iPhone 5 in white or black, the new iPad comes with 16, 32 or 64GB of storage. These limited options also means limited price. This would most accurately describe the goal of the health insurance exchanges.
The Federal Government's hope is that by limiting your options they will simplify the health insurance buying process. However, they also think in doing so they will be able to lower the cost. There are a few of economists who might politely disagree with that.
Microsoft, or the PC industry, on the other hand is focused on providing products with a myriad of options at various price points. That means you can buy a $200 budget laptop if you so desire. Is that laptop going to be any good, it depends, that's relative to what you need it to do. This would more closely resemble the current health insurance system.
4. Who Can Buy From Them?
Anyone. It doesn’t matter if you have coverage, don’t have coverage, get it through your employer or bought it on your own. The exchanges are kind of like Disneyland, everyone is welcomed.
5. Will You Have to Buy Insurance From the Exchange?
Only if you want to. However, you will have to buy insurance from someone in 2014 as a result of the new individual mandate.
6. Can You Keep Your Current Health Insurance?
Yes, as long as it’s offered to you. It’s possible that your company could discontinue its group health insurance plan in 2014 in favor of letting their employees get coverage through the exchange.
If you purchased your own individual or family policy, it will stay in force as long as you want it to.
7. What Type of Plans Will Be Sold There?
We don’t know. Ohio Governor John Kasich’s office released a fact sheet outlining what the state knows about the exchanges so far. It says:
The federal government has yet to issue required rules that would explain to states:
- The benefits that must be offered by health plans sold on the exchange or in the market
- How the federal government will pay for the federal exchange
- The requirements that multi-state plans must meet in order to be sold on the exchange
8. What Insurance Companies Will Be Participating?
Again, we don’t know. Until the above details have been released from the government, it’s unlikely we receive any clarity on this issues. Insurance companies cannot adequately design and price plans until this information is made public. The only thing we do know is that the government will select the companies to participate.
9. What About Tax Subsidies?
Individuals earning between 100-400 percent of the federal poverty level will be eligible to purchase subsidized health insurance through Ohio's exchange. You will also be subject to a handful of stipulations to verify your continued eligibility.
Here’s a rough estimate of the income ranges that would qualify you for a subsidy:
- Individual - $11,615 - $46,600
- Family of 2 - $$15,730 - $62,900
- Family of 3 - $19,810 - $79,210
- Family of 4 - $23,800 - $95,500
10. Will Ohio Be Running its Own Exchange?
No. Ohio has decided to allow the federal government to run its exchange. The reason for this decision is documented in great detail in the fact sheet. However, it doesn’t take an astrophysicist to understand why. The move will save the state $106 million in the first year and $43 million every year after.
11. Why is Ohio Not Running its Exchange?
Well, if you need more than 106 million reasons, states have very little flexibility or control over their exchange. Regardless what you may have heard, the law is very stingy in the amount of control it gives the state to operate its exchange. That makes it difficult for Ohio to set up an exchange that responds to the specific needs of its residents and the Ohio insurance market.
If you still need more, here is as direct quote from Governor Kasich's fact sheet.
“Governor John Kasich and Lt. Governor Mary Taylor want every Ohioan to have health care coverage and believe the route to achieving that is a market-based system that encourages both high quality and low costs. A rigid, prescriptive health insurance exchange that reduces choices and drives up costs does not align with the Kasich Administration’s health policy goals.”
12. Will Ohio Still Regulate its Insurance Industry?
Yes. Like it or not, there are over 400,000 jobs in the state that depend on the insurance industry, which is the second-largest number of industry jobs of any state in the country. By retaining regulation the state will be able to help maintain stability in the industry and preserves those jobs,
13. What About Medicaid?
Ohio will also remain the sole decision maker regarding Medicaid eligibility. Medicaid is the most expensive program in the states budget and complete control over such a hefty cost is imperative.
Only time will tell how these new exchanges will affect your health insurance choices, cost and flexibility.
Are you planning on buying your health insurance from the exchange? If so, why?