Obamacare and The Health Insurance Exchange

Now that the Presidential election is over, the Patient Protection and Affordable Care Act (PPACA) or more commonly know as Obamacare is looming on the horizon.   In addition to the current increase in premiums and the cutting of current employee hours, one aspect, the state run Health Care Exchange, has gone missing from the conversation.

Just what is a Health Care Exchange?

Health Insurance Does Not Insure Health

Health Insurance Does Not Insure Health (Photo credit: SavaTheAggie)

“An Exchange is a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality.  By pooling people together, reducing transaction costs, and increasing transparency, Exchanges create more efficient and competitive markets for individuals and small employers.”

With the pending “Fiscal Cliff,” and the rest of the things that come with the approaching new year did you know that your Obamacare, open enrollment period begins January 1, 2013?

“Beginning with an open enrollment period in 2013, Exchanges will help individuals and small employers shop for, select, and enroll in high-quality, affordable private health plans that fit their needs at competitive prices.  Exchanges will assist eligible individuals to receive premium tax credits or coverage through other Federal or State health care programs.  By providing one-stop shopping, Exchanges will make purchasing health insurance easier and more understandable.”

According to the Patient Protection and Affordable Care Act (PPACA), section 1321, States must be on track for achieving certification of an Exchange by January 1, 2013.  And just where are the states in this process?

Most recently at the Republican Governors Association conference, governors from Indiana, Ohio, and Wisconsin announced plans for the insurance exchanges in their states mandated by Obamacare.  All three have stated they will leave the responsibility for establishing the exchanges up to the federal government.  This makes 18 states that have indicated that they are not establishing a Health Insurance Exchange.

Under the Obamacare plan the state exchanges make tax credits available to residents who are purchasing their health insurance from the state exchange.   Never mind the admonition from President Obama that if you like your doctor and insurance you can keep it.  With a state opting out of creating an exchange, the federal government has to intervene and create one.  However with the federal government creation of the state exchange the tax credits are removed.  This effect insures that the federally established exchanges won’t work.   Why?  State residents won’t be able to afford the available insurance they’re attempting to purchase without the subsidy.

There are plenty of other taxes and penalties associated with the creation of these state health insurance exchanges, and you thought all you had to worry about was the pending fiscal cliff.

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