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Based on our experience enrolling more than 750,000 people in Affordable Care Act (ACA) health insurance plans, HealthSherpa has suggestions for revising the ACA. The following ideas are politically neutral, market-based reforms to help maintain access and improve the affordability of high-quality health coverage.
IMPROVE THE RISK POOL
- Change the cap on the premium multiple from 3x to 6x. Currently a 64-year-old cannot pay more than 3x the premium of a 21-year-old. Before the ACA existed, the market set that multiple as high as 11x. Going from 3x to 6x would incentivize more young people to sign up, improving the risk pool and lowering premiums.
- Replace SHOP* with the Individual Market which lets small businesses help employees pay for coverage on the individual exchanges allowing small businesses to work with their employees to improve the company wellness as well as the healthcare industry. Adding a group of generally healthy people (which lower premiums), will save small businesses money. Note that the 21st Century Cures Act addresses this, in part, by permitting small employers to utilize FSAs**.
- Go a step further than 21st Century Cures Act and let large employers subsidize coverage on the public exchanges. Many large employers don’t want to manage their own health insurance plans. Allowing them to subsidize public exchange coverage would improve the risk pool (lowering premiums) and could lead to large employers helping more of their employees get coverage; this could also include part-time employees.
- Require people to either maintain continuous coverage or wait three months after signing up for non-preventative care (if they sign up outside open enrollment). This would reduce the big hit on cost that the insurers are currently taking on people who wait until they get sick to sign up.
FIX THE MEDICAID GAP
- Move the threshold for receiving subsidies down from 100% to 0% of the Federal Poverty Level (FPL). Rate a new cost-sharing reduction (CSR) tier for the people who currently fall within the gap. Having insurance isn’t very useful if you can’t afford your copay, which is something the CSR addresses. These two changes take care of people who can’t get coverage because their state hasn’t yet expanded Medicaid.
MAKE THINGS SIMPLER & CHEAPER
- Combine the public exchanges into a single, federal platform. State exchanges have proved to be expensive and are slow to adapt to online innovative resources and alternatives.
- Remove pressure of a fixed enrollment window by opening enrollment to the month of your birth. The current three-month window is expensive and difficult to manage because people are unsure of the requirements and the tax implications (not to mention frustration due to long wait times on Healthcare.gov). Those who wait until the last minute to sign up create huge call, email and web-traffic volume spikes.
- Make Healthcare.gov an open data platform where private companies can build Turbotax-like experiences on top of a common government infrastructure. This allows for innovative, channel-specific platforms that expand the reach of the exchanges, improving consumer access and the risk pool.
Regardless of what happens next for the ACA, HealthSherpa is a resource to help guide individuals and their families through their health insurance options. Learn more by visiting www.HealthSherpa.com/faq.
*The Small Business Health Options Program (SHOP) Marketplace is for small employers who want to provide health and dental insurance to their employees — affordably, flexibly, and conveniently.
To use the SHOP Marketplace, your business or non-profit organization must have 50 or fewer full-time equivalent employees (FTEs).
**A flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer in the United States.
Part of the Affordable Care Act’s mission was to create more health insurance options available to more Americans. Several changes were made to what must be covered in all plans, how premiums are calculated and the ways you can shop for a health insurance plan. More choices mean more decisions to make, including where to shop for coverage. Learn how two of those options, on-exchange and off-exchange, compare, and how the differences might affect you and your household.
What Do On-Exchange and Off-Exchange Mean?
The ACA created the Health Insurance Marketplace, also known as the Affordable Insurance Exchange or Obamacare Exchange. This Marketplace, operated by the federal government, is a place where people without insurance can learn about and even purchase health insurance plans, as well as check their eligibility for different financial assistance to help with the costs of coverage. The health insurance plans purchased through the Marketplace, either the federal or a state-based one, are known as “on-exchange” plans. HealthSherpa is an alternative to healthcare.gov and provides Marketplace plan education and enrollment support!
You also can shop for and buy health coverage outside of the Marketplace. Alternatives include going directly to the insurance company selling the plan, through an insurance agent or broker, or through an online health insurance seller. Plans purchased outside of the Marketplace are referred to as “off-exchange” plans.
Similarities Between On-Exchange and Off-Exchange Plans
Some overlap is found in the on-exchange and off-exchange plans. Some insurance providers offer the same or similar plan options both in the public Marketplace and on the private market. Also there are 10 categories of essential health benefits that the ACA requires of all insurance plans no matter where they are sold. So for example, to be in compliance with the ACA, health insurance plans sold both on exchange and off exchange must provide preventive services and prescription drug coverage.
Differences Between On-Exchange and Off-Exchange Plans
Though you will find more off-exchange plans available, there are a few reasons why buying an on-exchange plan might be a better choice for you and your household.
- All on-exchange plans are Qualified Health Plans guaranteed to have minimum essential coverage.
- If you purchase an on-exchange plan, you will avoid the individual shared responsibility payment, also known as the individual mandate fine or ACA penalty. Under the ACA’s individual mandate, most Americans are required to have minimum essential coverage throughout the year unless they qualify for one of the exceptions to the requirement. Failure to have either a valid exception or health insurance coverage that meets the minimum requirements results in the IRS calculating a penalty when you file your federal tax return.
- And for many, this is the most important difference: Only through the Marketplace can you get savings on your monthly premiums and other financial assistance. If your income qualifies for Premium Tax Credit Assistance or for cost savings on other health care expenses, then you must buy an on-exchange plan to get these benefits. Keep in mind that if you enroll in an off-exchange plan during open enrollment because your income is too high for the discounted premiums, you will not be allowed to get those discounts later in the year if your income falls within the limits and even if you buy an on-exchange plan.
Confused or unsure? Contact HealthSherpa to set up an appointment with one of our customer advocates who can answer any questions and help you decide which plan is right for you.