Assignmet 9 - Health Insurance Exchanges

Question 1

intended to be the vehicles through which individuals and small businesses can compare a number of health insurance plans and buy coverage. They are also intended as the mechanism whereby eligibility for individual subsidies is determined and the subsidy applied to the selected coverage.

Answer 1

exchnages / marketplaces

Question 2

Under the ACA, what options were offered to states concerning the creation of health insurance exchanges?

Answer 2

1. Each state had until early 2013 to submit blueprints to the federal government for state-run exchanges
2. federal government would operate as the default exchange in the state

Question 3

Those states choosing to create a state-based health insurance exchange have three options in terms of the role the state plays in establishing and operating the exchange:

Answer 3

1. Market facilitator.
2. Selective Contractor
3. Active Purchaser

Question 4

• With this model, the state’s exchange accepts all health plans that meet the federal minimum requirements for qualified health plans. As such, the exchange serves as an impartial source of information and provides a structure in which people and businesses can compare plans and plan options
• This approach seeks to maximize the number of plan choices available.

Answer 4

Market facilitator.

Question 5

In this model, the state-based exchange provides additional constraints on health plans that otherwise meet the minimum federal requirements, selecting some plans while rejecting others.

Answer 5

Selective contractor.

Question 6

In this model, the exchange functions much as an employer would. The exchange would select which plans with which sets of benefits, copays and deductibles it wishes to offer and then negotiate premiums with insurers. Individuals and small employers would then purchase coverage from the exchanges, but only for the plans that have been selected by the exchange.

Answer 6

Active purchaser.

Question 7

What options are available to states in organizing and governing their exchanges? (2)

Answer 7

• The states can establish a new state agency or
• assign the responsibilities to an existing agency

Question 8

The ACA calls for the creation of two exchanges:

The states have the options to combine the administration of the two exchanges into a single entity and/or to combine the two risk pools into a single pool.

Answer 8

• an individual exchange
• Small Business Health Options Program, or SHOP exchange

Question 9

the phenomenon in the insurance mechanism whereby individuals who have higher-than-average potentially insurable risks ‘select against’ the insurer. That is, those with greater probabilities of loss, and who therefore need insurance more than the average insured, attempt to obtain coverage

Answer 9

Adverse selection

Question 10

The health care exchanges have five core functions to perform:

Answer 10

1. Eligibility determination.
2. Enrollment
3. Plan Management
4. Consumer Assistance
5. Financial Management

Question 11

are individuals or organizations that assist people in working through the process of enrolling and in understanding their health plan options and coverage.

Answer 11

“navigators”

Question 12

The Secretary of Health and Human Services has been given the task to establish standards for navigators. Under such standards, a navigator shall not:

Answer 12

• (1) be a health insurance issuer; or
• (2) receive any consideration directly or indirectly from any health insurance issuer

Question 13

What are the ten essential benefits that each plan must provide as required by the ACA?

Answer 13

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance abuse services
6. Prescription drugs
7. Rehabilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

Question 14

What is the rationale for the design of the tax credit created as part of the ACA?

Answer 14

The tax credit is designed to cover the cost of the second least costly silver plan offered in the area.

Question 15

those with 25 or fewer employees are eligible for a tax credit of up to 50% of the “employer’s contribution” toward the insurance premium. However, this subsidy is only available if the firm’s contribution is at least 50% of the full premium and the average annual wage is less than ____. The size of the subsidy is reduced as firm size and average wage levels increase. Under the originally passed ACA legislation, the subsidy was only available for __ years.

Answer 15

• $50,000
• two

Question 16

Plans offered through the exchanges (as well as those offered outside the exchanges) are limited in the demographic characteristics they may use in setting premiums. The ACA allows the use of:

Answer 16

• age
• family composition
• tobacco use

Plans may not use gender or preexisting health conditions

Question 17

The Society of Actuaries (SOA, 2013) released a report that estimates the average premium consequences of the ACA on the nongroup health insurance market. The SOA estimates that, in 2017, three years after implementation, on average, the per-member per-month premiums for coverage purchased through an exchange will be ____ higher under the ACA than they would have been otherwise.

Answer 17

31.5%