State Health Insurance Exchange: State Run Exchanges

Finding out Which What Type of Health Insurance Exchange Your State Will Run?

State Health Insurance Exchanges are vital to ObamaCare. Health care reform relies on the success of State run Health Insurance Exchanges. The new health care law implements health insurance exchanges, which are online marketplaces where consumers can purchase health insurance.

State will either implement a state run health insurance exchange, will let the federal government run the health insurance exchange for them. Some states have taken a variation on the approach by either are planing to partner with another state or the federal government.

Will My State Run Their Own Health Insurance Exchange?

We have complied a list below as to where the states stand in regards to the status their health insurance exchange, which branch of Government will run the exchange, the structure of the exchange and what type of exchange they run.

The Insurance Exchanges: A Health Care Choice Left Up to the State

On the site we have talked about the dangers of letting individual states Opt-Out of Medicaid Expansion. There is a good reason for this, states Opting out of expansion will leave their poorest uninsured and will cause an extra financial burden on the exchanges (which may get passed on to the rest of us), by potentially having to cover these individuals.

The State run exchanges are a different scenario Each State seems to have unique take on how they will implement the Affordable Care Act. We are yet to see how the exchanges will impact the people of each state. One thing that is obvious is that Red states are tending to Opt for Government run exchange, while more Blue states are opting for State Run Exchanges.

The Danger in States Opting Out of Creating a State Run Health Insurance Exchange

17 States Opting-Out of Creating Health Insurance Exchanges Leave Federal Taxpayers Responsible for Millions of Their Constituents.

Right now many states are opting out of running exchanges leaving the Federal Government responsible for providing subsidies to their employees and low-middle income constituents. These are essentially the same states opting out of Medicaid expansion. These actions shift their responsibility to provide for millions of their constituents onto the federal tax payer.

Which States Will Run a State Health Insurance Exchange

Each State will run their Health Insurance Exchange in their own way. Here is a break down of where the states are at on their decision now and what type of exchange they will run State run exchange, Federal run exchange or Partnership Exchange between State and Federal Governments.

Structure of Exchange: States have the option of establishing the exchange as part of an existing state agency or office (Operated by State), as an independent public agency (Quasi-governmental), or as a non-profit entity (Non-profit).

Type of Exchange: States have flexibility in determining the role of the exchange with respect to contracting with health plans. All exchanges are required to contract only with health plans the meet minimum federal requirements for qualified health plans. States can choose to have the exchange contract with all qualified health plans (clearinghouse) or states can choose to have the exchange contract with selected health plans and/or negotiate premium prices with health plans (active purchaser).

Source: http://statehealthfacts.kff.org/comparemaptable.jsp?ind=962&cat=17

A New Fee Set in Motion By States Opting out of the State Run Insurance Exchanges

ObamaCare is using a provision in the bill that allows them to charge insurers a 3.5% fee to sell insurance on the Federal Run Health Insurance Exchange.

This is a response to the GOP standing lock step against setting up state run exchanges, which along with opting out of Medicaid expansion is part of a plan to "break" ObamaCare. (this is widely talked about in conservative blogs and publications).

About ObamaCare's 3.5% Fee for Selling Insurance Option

ObamaCare gives states and the federal government the option of charging insurance companies a 3.5% fee, on the cost of the premium, to sell insurance on the exchange. States also have the option of using grants and other forms of assistance from the federal government, but states that refuse setting up a state run exchange will not get the subsides, therefore their constituents will purchase insurance at what will most likely be a higher rate.

Insurance companies have a big incentive to sell their plans on the exchange regardless of the cost since t gives them access to millions of Americans who will only be able to use their tax credits and subsidies (along with other forms of cost assistance) on the exchanges.

How the 3.5% fee will affect States of who are opting out of setting up an exchange and how it will affect the price of insurance premiums remains to be seen. One thing we do know is that ObamaCare, while perhaps not 100% prepared to deal with the opposition (especially after the last supreme court ruling where the NFIB stuck the Medicaid opt-out in), hasn't overlooked the fact that the GOP would pull a move like this and is willing to fight back.

The end result is to put pressure on the states to comply with ObamaCare. The fact is ObamaCare isn't going away, trying to "break" the program hurts millions of Americans for few other reasons than playing "political hardball". The administration isn't backing down. Unfortunately for now it seems it is the American people are caught in the crossfire.

Updates On State Run and Federal Run Insurance Exchanges

Keep checking back to learn more about the status of each State exchange. The final deadline to declare what type of exchange the states has been moved from Nov. 16th to Dec. 14th. The State Insurance Exchanges are one of most vital aspects of ObamaCare, so the success of the state run health insurance exchanges will be a barometer for the success of the program. Stay Tuned.