Questions and Answers December 14, 2010 Prepared for the Vermont Commission on Health Care Reform by Jennifer Carbee, Legislative Counsel
What is a Health Exchange? Mechanism enabling individuals and small businesses to compare insurers health plans Similar to the way Expedia or Orbitz allows comparison of fares, hotels, etc. Not an insurer Only includes qualified health plans
What does an Exchange do? Certifies qualified health plans Allows for apples-to-apples comparison of qualified health plans, including a rating system based on quality and price Allows consumers to enroll in qualified health plans online, by phone, or by mail using a uniform paper form Helps consumers determine eligibility for premium tax credits and cost-sharing subsidies Screens, enrolls people in Medicaid and SCHIP
What is a Qualified Health Plan? Qualified health plans: Provide essential health benefits Are certified by the Exchange as meeting certain standards and requirements Are offered by Vermont-licensed insurers who agree to offer at least gold and silver level plans
When does the Exchange start? State health exchanges must be operational by January 1, 2014
Who will operate Vermont s Exchange? Decision Point! Lawmakers must choose one of the following: State exchange operated by a state agency State exchange operated by a nonprofit organization Regional exchange operated on behalf of two or more states State exchange operated by U.S. Department of Health and Human Services on Vermont s behalf
Why buy insurance through the Exchange? One-stop shopping for health insurance All plans offer minimum essential benefits Cost-sharing annual maximums Federal tax credits and cost-sharing subsidies only available through Exchange Tax credits based on income (133% - 400% FPL) and linked to price of second-lowest cost silver plan Cost-sharing subsidies based on income (133% - 250% FPL) and only available for enrollees in silver plan
Who is eligible for the Exchange? Open to all citizens and legal immigrants who live in Vermont (except those in prison) Open to small employers that offer coverage to all full-time employees small employer = up to 100 employees Decision point! - state may choose to limit to 1-50 employees until 2016 In 2017, open to large employers, too
How many Exchanges should Vermont have? Decision points! States may choose: Whether to have separate or combined Exchanges for the individual and small group markets Whether to operate one or more subsidiary Exchanges serving a geographically distinct area (Vermont unlikely to qualify)
What will be offered in the Exchange? Qualified health plans offered by insurers licensed to do business in Vermont At least two multi-state plans established by the federal Office of Personnel Management Decision point! States can choose whether to allow the community health insurance option established by HHS to operate in their Exchange Plans offered by nonprofit insurers created under CO-OP program
What is offered outside of the Exchange? All large group plans until 2017 Grandfathered plans Other individual and small group plans if an insurer wants and Vermont so chooses Not eligible for subsidies Must include essential benefits package & limits on cost-sharing required by the exchange Medicare supplemental plans
How does the Exchange fit in with Medicaid/Global Commitment? Decision point! States may establish a plan ( Basic Health Plan ) in the Exchange for individuals with incomes between 133-200% FPL Most are currently eligible for VHAP or ESI, but Global Commitment waiver extension expires at end of 2013 so Vermont will need to decide what, if anything, to do for everyone under 300% FPL
What other decisions does Vermont need to make? Decision points! Whether to require Exchange plans to offer benefits beyond the minimum essential benefits in federal law State responsible for paying subsidies associated with additional mandates Whether to allow Exchange to contract with another entity to carry out some its responsibilities Whether to merge the individual and small group insurance markets