In accordance with the ACA, states are required to have a health insurance exchange operational either independently, federally or as a partnership between the federal government and the state by January 2014. Since January 2014 is when most Americans must have health insurance, many will need to purchase coverage from an exchange by this coming October in order for it to be effective in January. Currently only Utah (for small businesses) and Massachusetts have working exchanges. Now what???

The Department of Health and Human Services (HHS) has given conditional approval to the 17 states that have indicated that they are willing to establish their own exchanges. These states have not shown their readiness for the October enrollment deadline, therefore they cannot yet be issued final approval. In addition, other states have until February 15 to file an application to operate an exchange in partnership with the federal government. These exchanges, however, will require state-by-state technology to interact electronically with the federal government in order to be functional. There will certainly be more partnership exchanges than were originally anticipated, thus likely to create a bureaucratic logjam.

California, which has the largest uninsured population is making progress with Covered California, their state run exchange. Although it isn’t ready yet, the state did receive an additional federal grant to keep plans for the exchange moving forward. California has more than 5 million uninsured people who will be eligible to use this exchange.

The idea behind health insurance exchanges is to negotiate with health insurance companies to provide the best rate for consumers. Exchanges should also assist the consumer in selecting the best plans for them and their family. Most insurers have not committed to participating in the exchanges and have said that they will look at each one individually to see if it is viable. The health insurance providers are a critical component to the success of the health insurance exchanges.

For those expecting to use a health insurance exchange, keep your fingers crossed. For additional information, contact EAB HealthWorks.