Health Insurance Exchanges - A Review
With passing of the Affordable Care Act (ACA) last year, Health Insurance Exchanges (HIX) is poised to play a major role in people’s lives starting from 2014.
They would start buying health insurance schemes from nearby stores like any other commodity, say industry experts. Some stores known as Health Insurance Exchanges are already in the business of selling this insurance coverage.
What is in Store
The U.S. Department of Health and Human Services (HHS) has already issued directives for the States in July 2011 towards setting up of affordable insurance exchanges. These directives cover detailed standards for exchanges planned to be set up and guidelines for maintaining stabilized levels of premium for the consumers as well as the insurance exchanges. The new rule is a guide map for setting up of Small Business Health Options Program (SHOP), grass root level exchange functions and certifying health plans for participation in the exchange. States are free to develop the system independently or do it in partnership with the government. Several states and few territories have already accepted Federal grants for setting up of insurance exchanges. Under the new rule it is mandatory for states to set up and operate HIX with multiple points of contact, viz., phone lines, online channels and paper based systems where any individual can choose to buy health insurance.
Initiatives by Private Insurers
Private insurers are in the process of setting up online exchange and kiosks. Retailers like Ceridian, ADP and Aon too are likely to enter the arena with private exchanges and in-store kiosks. People will be able to compare private insurance plans, raise queries to insurers about their eligibility to tax credits for private or public insurance programs such as the Children's Health Insurance Program. According to Kathleen Sebelius HHS Secretary, dealings of insurance companies would be transparent under the new rule and there would be competition which would bring down costs. It will give people and small businesses certain amount of purchasing power that suits their requirements.
The Revenue Impact
Based on Congressional Budget Office reports, in 2014 over 12 million consumers are expected to buy health insurance through HIX and this number is expected to go upto 28 million by 2019. A recent analysis by PricewaterhouseCoopers (PwC) shows that over 90 per cent individuals are expected to purchase insurance coverage through HIX by 2014 worth & 60 billion in premium. PwC has also estimated that this will grow upto $200 billion during the period 2014 to 2019.
Insurance business will have a better face tomorrow if consumers start enjoying a multitude of choices from several competing exchanges. Undoubtedly, HIX will favor individual consumers and small groups unlike the traditional insurance companies. In the opinion of Steve Larsen, director of Center for Consumer Information and Insurance Oversight, States are in the forefront carrying out health reforms and that the private insurers will have to take it as a challenge – a point worth noting by Medical transcription companies.
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