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Annals of Internal Medicine

Medicine and Public Issues

Health Policy Basics: Health Insurance Marketplaces


Ryan A. Crowley, BSJ, and Thomas G. Tape, MD

tarting on 1 October 2013, most individuals and small businesses will be able to shop for and enroll in health insurance coverage through their states health insurance marketplace, also known as an exchange. The health insurance marketplaces will serve as a one-stop resource to help the uninsured and the underinsured nd comprehensive health coverage that ts their needs and budget and determine whether they qualify for health insurance tax credits provided by the Affordable Care Act. Physicians may benet because insured patients are more likely to have a regular source of care, adhere to medical regimens, and access preventive care. However, implementation of the marketplaces may prove challenging if enrollment numbers are insufcient, technical problems arise, and patients are unable to access providers. Despite these potential issues, physicians are encouraged to educate themselves about how the marketplaces work so they can direct their patients to nd the coverage that best meets their medical needs. Health insurance marketplaces, also referred to as exchanges, will soon be a key feature of the U.S. health care system. The purpose of the marketplaces is to help the uninsured obtain health coverage as part of the implementation of the Affordable Care Act (ACA). Although enrollment begins in October 2013, many people are unaware of what is coming and what they will need to do. This policy brief provides information on how marketplaces will work and the implications of health insurance exchanges for patients and physicians. In the past, shopping for health insurance could be a daunting and confusing experience. Those purchasing health insurance on their own faced health insurance plan choices with varying and often inadequate benets accompanied by excessive premiums and deductibles. The hope is that marketplaces will enable individuals to make applesto-apples comparisons of private health plans that meet minimum standards and enroll in the one that best suits their health needs and budget. Many will qualify for subsidies to make insurance more affordable. Small businesses will also be able to shop for and purchase health insurance for their employees through the marketplace.

for their workers. Patients will be able to access the marketplace through a Web site, via a toll-free call center, or with the help of specially trained consumer assistance professionals. Individuals can also use the marketplace to determine whether they are eligible for Medicaid coverage and, if they qualify, be referred to the appropriate state agency to enroll.
Governance

States may elect to operate their own marketplace, have the federal government run their states marketplace, or partner with the federal government, sharing responsibility for health plan management or consumer assistance duties. In 2014, 16 states and the District of Columbia will be running their own marketplaces, and 7 states will collaborate with the federal government in a partnership marketplace (1). Twenty-seven states defaulted to allow the federal government to operate their exchange, although some states are acting as silent partners on certain activities, such as health plan management and oversight. Utah has been approved to run its own small business health insurance marketplace, and the federal government will operate the states individual marketplace. Marketplaces are intended to provide the same functions regardless of whether theyre operated by the state, federal government, or both.
What Kind of Health Insurance Plans Will Be Available?

HOW WILL

THE

MARKETPLACES WORK?

Beginning in 2014, most individuals who do not already have health insurance will have to acquire health insurance or pay a ne. The marketplaces created under the ACA will be open to legal residents who are not currently incarcerated and to businesses with up to 100 employees. Starting in 2017, states may open the marketplaces to larger employers who want to purchase insurance
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To be sold through the marketplace, a plan must be certied as a qualied health plan. Qualied health plans must be licensed in the state in which they are sold and provide an essential health benet package consisting of services within 10 benet categories (Table). Plans will be offered in 4 tiers (bronze, silver, gold, and platinum) distinguished by the level of coverage provided. Although outof-pocket costs are capped, plans have exibility in setting rates, deductibles, and copayments if the overall value meets the tier standard. Limited-benet catastrophic care plans will be available to people younger than age 30 years and some people with low incomes. Qualied health plans must follow the ACAs insurance market reforms (such as prohibitions on preexisting condition limitations) and marketing and provider network rules. Eventually, marketplaces will also rate health plans on the basis of quality and cost of benets.
Eligibility Determination, Enrollment, Tax Credits

Starting in January 2014, U.S. citizens and legal residents who are uninsured or underinsured (their current job-based coverage is less generous than a bronze tier plan) will be able to claim an advance, refundable, sliding-scale tax credit that will help make marketplace-based insurance

2013 American College of Physicians 1

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Medicine and Public Issues


Health Plans

Health Insurance Marketplaces

Table. Essential Health Benefit Categories for Qualified

Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care

more affordable. To qualify, modied adjusted gross annual income must be between 100% and 400% of the federal poverty level: $11 490 to $45 960 for an individual and $23 550 to $94 200 for a family of 4 (2). Those with incomes up to 250% of the federal poverty level will also be eligible for cost-sharing subsidies. People with incomes up to 138% of the federal poverty level, or about $15,850 for an individual, will be able to enroll in Medicaid if their state has chosen to expand coverage. Small businesses may be eligible for a tax credit to help them purchase health coverage for their employees through the small business marketplace. Marketplace enrollment is voluntary, but people can use premium tax credits and cost-sharing assistance only for qualied health plans offered through the marketplace. The Congressional Budget Ofce estimates that by scal year 2023, 24 million people will be enrolled in marketplace-based coverage, 19 million of whom will receive premium tax credits (3).
Navigators and Other Consumer Assistance Tools

limit out-of-pocket costs and provide essential health benets, and it cannot restrict coverage on the basis of preexisting conditions or vary premiums according to health status. Once the marketplaces are fully implemented, patients can compare health plan premiums, cost-sharing, benets, provider networks, and quality ratings and then enroll. They can also determine whether they are eligible for tax credits or Medicaid coverage. The reformed health insurance landscape may also present challenges. Many people have low awareness of the ACAs health coverage provisions and may not understand the laws impact (6). Many have limited knowledge of how health insurance is structured and how cost-sharing works, undermining their ability to make informed decisions about plan choice and budgeting (7). An efcient enrollment process depends on the data hub the information technology used to verify eligibility information, such as Social Security numbers and immigration status. Problems with the data hub could slow eligibility determinations and information sharing among states and the federal government (8, 9). Although subsidies increase the affordability of marketplace-based insurance, coverage may remain costly for those who receive smaller subsidies. In addition, many low-income patients residing in states that have chosen not to expand Medicaid will not be eligible for marketplace-based subsidies.

WHAT ARE

THE IMPLICATIONS FOR

PHYSICIANS?

Community-based consumer assistance organizations called navigators will raise awareness about the marketplaces and will be available to help patients apply for coverage, shop for and compare qualied health plans, and enroll in the plan that best ts their needs. Health care providers, such as community health centers and hospitals, may apply to become certied application counselors and train to assist patients in lling out enrollment applications. Marketplaces must be prepared to assist those with limited English prociency and individuals with disabilities.

WHAT ARE

THE IMPLICATIONS FOR

PATIENTS?

More than 48 million Americans were uninsured in 2011, and millions more were covered by insufcient insurance (4). Uninsured adults are less likely to receive preventive services, more likely to die of serious acute conditions, and more likely to experience nancial hardship connected to medical care than those with insurance (5). The ACAs coverage expansion seeks to help reverse these negative consequences. Marketplace-based coverage must
2 Annals of Internal Medicine

Insured patients are more likely to have a regular source of care, enabling better treatment regimen adherence and early intervention of illness (10). Patients will have access to a wider range of services, including preventive care, without cost-sharing. Consequently, physicians are likely to benet because their patients will have the coverage they need to obtain medical services and access a regular source of care. The potential for bad debt may be reduced along with the rate of uninsured care. Despite the potential benets of a stable health insurance marketplace, physicians should be aware of potential marketplace issues. Qualied health plans must meet network adequacy and essential community provider access standards to help ensure that patients have access to services in a timely manner. To control costs and keep premiums low, insurers may be forming smaller provider networks containing fewer physicians and other health care professionals (11). Marketplace-based plans may pose administrative challenges for ofce staff, including collection of deductibles and copayments and payment for services rendered to a patient whose coverage has been terminated for failure to pay insurance premiums. This issue may be further complicated by the wide variation in deductibles and copayments. In addition, it is unclear whether the current physician workforce will be able to absorb the newly covered patients.
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Health Insurance Marketplaces

Medicine and Public Issues

WHEN WILL CHANGES GO INTO EFFECT?


Marketplaces will be up and running on 1 October 2013, to begin open enrollment for qualied health plans. On 1 January 2014, qualied health plans and Medicaid expansion coverage will begin, tax credits will be distributed, insurance regulations will be implemented, and most legal residents will be required to have health coverage. Initial open enrollment for the marketplaces ends on 31 March 2014. For benet years beginning on or after 2015, open enrollment is from 15 October to 7 December of the preceding calendar year. Special enrollment periods are available for those who experience a signicant life event, such as the birth of a child or loss of job-based health coverage. Those who miss the open enrollment period and do not qualify for special enrollment may seek coverage outside of the marketplace or apply for Medicaid.

courage their patients to seek out and enroll in the coverage that best suits their familys needs.
From the American College of Physicians, Philadelphia, Pennsylvania.
Grant Support: Financial support for the development of this article

comes exclusively from the American College of Physicians operating budget.


Potential Conflicts of Interest: Disclosures can be viewed at www .acponline.org/authors/icmje/ConictOfInterestForsm.do?msNumM13 -1988. Requests for Single Reprints: Customer Service, American College of Physicians, 190 N. Independence Mall West, Philadelphia, PA 19106.

Current author addresses and author contributions are available at www.annals.org.

HOW CAN PHYSICIANS PREPARE MARKETPLACES?

FOR THE

References
1. Kaiser Family Foundation. State Decisions for Creating Health Insurance Marketplaces. May 10, 2013. Accessed at http://kff.org/health-reform/slide/state -decisions-for-creating-health-insurance-exchanges/ on 6 August 2014. 2. Medicaid.gov. 2013 poverty guidelines. Accessed at www.medicaid.gov /Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Downloads/2013 -Federal-Poverty-level-charts.pdf on 5 August 2013. 3. Congressional Budget Ofce. May 2013 estimate of the effects of the Affordable Care Act on health insurance coverage. Accessed at www.cbo.gov/sites /default/les/cboles/attachments/44190_EffectsAffordableCareActHealth InsuranceCoverage_2.pdf on 5 August 2013. 4. Kaiser Family Foundation. Health insurance coverage of the total population. Accessed at http://kff.org/other/state-indicator/total-population/ on 16 August 2013. 5. Institute of Medicine. Americas Uninsured Crisis: Consequences for Health and Health Care. Washington, DC: National Acad Pr; 2009. 6. Kaiser Family Foundation. Kaiser health tracking poll: April 2013. Accessed at kff.org/health-reform/poll-nding/kaiser-health-tracking-poll-april-2013/ on 16 August 2013. 7. Loewenstein G, Friedman JY, McGill B, Ahmad S, Linck S, Sinkula S, et al. Consumers misunderstanding of health insurance. J Health Econ. 2013;32:850862. [PMID: 23872676] 8. Government Accountability Ofce. Patient Protection and Affordable Care Act: Status of CMS efforts to establish federally facilitated health insurance exchanges. June 2013. Accessed at www.gao.gov/products/GAO-13-601 on 13 September 2013. 9. Hewitt M. Facilitating State Health Exchange Communication Through the Use of Health Literate Practices. Workshop Summary. Institute of Medicine. 2012. Accessed at www.nap.edu/openbook.php?record_id13255&page7 on 9 August 2013. 10. Collins SR, Robertson R, Garber T, Doty MM. Insuring the future: current trends in health coverage and the effects of implementing the Affordable Care Act. Commonwealth Fund. April 2013. Accessed at www.commonwealthfund .org/~/media/Files/Publications/Fund%20Report/2013/Apr/1681_Collins _insuring_future_biennial_survey_2012_FINAL.pdf on 16 August 2013. 11. Holahan J, Peters R, Lucia K, Monahan C. Cross-cutting issues: insurer participation and competition in health insurance exchanges: early indications from selected states. Robert Wood Johnson Foundation and Urban Institute. July 2013. Accessed at www.rwjf.org/content/dam/farm/reports/issue_briefs/2013 /rwjf406939 on 6 August 2013.

To answer basic questions patients may have, physicians should educate themselves and their staffs about the ACAs coverage provisions. However, physicians should refer their patients to a navigator or other certied entity trained to provide health coverage information and assistance. Information on navigators and other assistance personnel can be found at www.healthcare.gov or through your states health insurance marketplace. The American College of Physicians has developed an education and enrollment outreach campaign to provide members with state-specic resources related to the ACA coverage expansion. The College has also developed information for patients on how to learn about and enroll in health coverage. The materials can be accessed at www.acponline.org /advocacy/state_health_policy/aca_enrollment/. Physicians can also refer patients to www.healthcare .gov, the hub for federally run marketplaces, to learn about options and prepare for open enrollment. Posters, brochures, fact sheets, and videos about the marketplace are available at marketplace.cms.gov for physicians who wish to provide these materials for patients in their practices.

CONCLUSION
Health care reform presents major opportunities and challenges. For the rst time, patients will have access to a marketplace to purchase high-quality, comprehensive health insurance. The ACA should enable millions to enroll in health insurance coverage, many for the rst time. Physicians need to know what to expect and should en-

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Current Author Addresses: Mr. Crowley: American College of Physicians, 25 Massachusetts Avenue Northwest, Washington, DC 200017401. Dr. Tape: Division of General Internal Medicine, 986430 Nebraska Medical Center, Omaha, NE 68198-6430. Author Contributions: Conception and design: R.A. Crowley.

Analysis and interpretation of the data: R.A. Crowley. Drafting of the article: R.A. Crowley, T.G. Tape. Critical revision of the article for important intellectual content: R.A. Crowley, T.G. Tape. Final approval of the article: R.A. Crowley, T.G. Tape. Administrative, technical, or logistic support: R.A. Crowley. Collection and assembly of data: R.A. Crowley.

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