The federal government is giving states $49 million to set up their exchanges. And they assume there will be policies available outside the exchanges as well. However, anyone seeking subsidies to help purchase insurance must use the exchange for their state
National health care and state insurance exchanges. The new healthcare legislation taking effect in the US will succeed or fail, in large part, due to the quality of the insurance exchanges set up by state governments. The operational details of the exchanges will vary from state to state. As an example, Massachusetts has run an insurance marketplace for the past 4 years. In that state, applications for policies are usually handled on paper and the state is very active in getting bids and negotiating prices with insurance companies. On the other hand, Utah’s system is online and serves basically as a comparison tool. Their system has only been in place since early this year.. .
Utah’s online system allows any insurance company to list their policy offerings for citizens to choose from. There are minimum benefit standards, but insurers set their own prices and compete within the marketplace. The state feels that putting too many restrictions on insurers will discourage competition and give those needing insurance fewer options to choose from. Massachusetts has taken a more “governmental” approach, says State Senator Richard Moore, which the state feels is the best plan for a “bigger industrialized states” such as theirs.
Twenty-four million people will get health insurance through state exchanges by 2019, according to data from the Congressional Budget Office. Most will get government assistance to help them pay for the insurance, at an average subsidy of $6,000 yearly per person. Assistance will be available for people earning up to 4 times the US poverty level, or about $88,000 for a family of 4
It remains to be seen how other state’s exchanges will develop. Exchanges must be up and running in all states by January 1, 2014. National health care relies on state insurance exchanges.
