Health Insurance Marketplaces (Exchanges):
Under the Patient Protection and Affordable Care Act, marketplaces or exchanges are resources for obtaining affordable and quality health insurance. The marketplaces can either be public or private organizations that operate online websites for American citizens to shop and compare health insurance plans. The exchanges must be established, certified, and operational by January 1st, 2014 throughout all America states. The purpose for theses marketplaces is to ensure everyone from an individual to a small business has the opportunity to receive the health insurance plan that is more suitable for them. Health insurance marketplaces also help insurance companies meet the rules and regulations of consumer laws, compete more efficiently, and spread health insurance coverage to more Americans.
What are public health insurance exchanges? Public health insurance exchanges are standardized health plans that are offered in state regulated marketplaces opened to the public under the new Patient Protection and Affordable Care Act. Public health insurance exchanges give individuals, families, and small employers the opportunity to explore and learn about the options they have in finding suitable health insurance coverage. Health insurance exchanges are where shoppers can enroll, compare costs and benefits, and choose a health insurance plan. Health insurance exchanges provides helpful information about programs like Medicaid and the Children’s Health Insurance Program, and other programs that will help people pay or save money on insurance coverage, such as out of pocket, premium rates. Names of insurance exchanges or marketplaces may be named differently, according to what the state is, but as an example, the exchange that the federal government operates is called “the Health Insurance Marketplace.” On the other, public health insurance exchanges is an option for individual, families, and small businesses, but not the one because they can still purchase health insurance coverage what ever way they would like (NCSL.org, 2013).
What is SHOP and who is a “small employer?” To help make it easier for small businesses to provide an adequate and affordable health insurance for their employees, the Patient Protection and Affordable Care Act created a program named “the Small Business Health Options Program or (SHOP).” SHOP is a marketplace that makes the affordability of health insurance more practical for small businesses with 50 or less full-time equivalent employees. Because of the buying power that the SHOP program obtains, it is able to negotiate the best prices with health insurance companies, in which produces better cost options for small businesses. Each state in America will have a SHOP marketplace, but employers must have a work site for employees or an office located in the SHOP’s service area before they can use the Small Business Health Options Program. The SHOP marketplace will open for enrollment November 1st, 2013. Before a small business can use a SHOP plan they must offer all full-time employees health insurance coverage. The way SHOP works is that the employer pays one lump amount to SHOP, and then the SHOP is responsible for making the payments to the health insurance companies. Small businesses that plan to use the Small Business Health Options Program will benefit in the following ways:
Control the coverage offered and employee premiums
Compare health insurance plans, which helps in choosing the best decision for the business
Increases the chance of receiving a small business health care tax credit up to 50% of premium cost
November 1st, 2013, small businesses can begin enrolling in the SHOP marketplace, but the health insurance coverage doesn’t start until January 1st, 2013 (Healthcare.gov, 2013).
A small employer is a business that has less than 25 full-time equivalent employees on their current payroll. And before a business can be recognized as a small employer, the employees must average wages less than $50,000 a year. If a business is considered a small employer and they cover at least 50% of each employee’s health insurance coverage for a single individual, that employer may be eligible to claim a tax credit. Also, before a small employer can become an eligible participant for claiming a tax credit, they must first pay health insurance premium for employees that are enrolled in a health plan that is qualified through a SHOP (Small Business Health Options Program) marketplace. An eligible small employer is able to claim a tax credit two years consecutively (IRS.gov, 2013).
What are private health insurance exchanges? Under Patient Protection and Affordable Care Act, health insurance exchanges were implemented to increase the accessibility of healthcare in the United States. The exchanges, which are marketplaces that people can shop and purchase health insurance. Health insurance exchanges come in two different models, one being public and the other being private. Public insurance exchanges have already been discussed previously in this paper, so, what are private health insurance exchanges? A private health insurance exchange is a health insurance marketplace managed and operated in a private sector by either an independent health insurance company or a nonprofit organization. All the insurance companies participating in the exchange must follow the rules set by the Patient Protection and Affordable Care Act. Private insurance exchanges can be used to offer subsidies to large organizations that would like to enroll their employees or assist customers that are looking for health insurance plans that specifically suit the individual. In private health marketplaces, there are two different types of exchanges available: A group health insurance market and an individual health insurance market. The private health insurance exchanges offer four important features that consumers can rely on with a private health insurance plan, which include:
A choice between two or more major medical health plans.
Recommendation and health insurance advice.
Automated billing and other services.
Continued support
Private health insurance exchanges are not consider being part of Patient Protection and Affordable Care Act, but only there to help expand health insurance to more individual and companies throughout America. Private health insurance exchanges just provide another option for people to choose a quality and affordable insurance (Aetna.com, 2013).