Part Two in Health Reform Series: Health Benefits Exchange
This is the second in a series of posts on health care reform and its impact on our state. In less than two years, Washingtonians could see sweeping improvements in both cost and access to health care with the implementation of federal health care reform. Yesterday, we highlighted how the law will give 800,000 Washingtonians access to affordable insurance. Today we explore how Health Benefit Exchanges, one of the core components of health care reform, will help accomplish this.
The Health Benefits Exchange will create a new marketplace for insurance companies to offer affordable health insurance to individuals and small businesses. States must have an exchange in place by the start of 2014, and Washington is one of 15 states that have made headway toward this requirement.(1)
Benefits from the exchange include:
- More competition, better value: Exchanges will offer options that help patients shop for and enroll in a private health insurance plan. Consumers will be able to compare health plans, search for ones that meet their needs, and rate the quality of their plan, which will encourage private insurers to offer better value at lower prices.
- Improved affordability: People with lower- and middle incomes will be eligible for federal tax credits to help them afford private health insurance. (2) The table below displays the range of premiums that people would pay, depending on their income. In addition, some people will qualify for additional help that will limit out-of-pocket health care costs, such as co-payments and deductibles.
- Reduced number of uninsured: Financial assistance within the exchange removes a significant barrier for individuals and families previously unable to afford coverage, and benefits everyone in the state. By some estimates, the exchange will increase coverage for over 400,000 previously uninsured Washingtonians. (3) With more people insured, we can expect to see less uncompensated care, which cost our state’s hospitals an estimated $700 million in 2010 and was passed on to us all, through increased premiums. The Office of the Insurance Commissioner estimates that the hidden cost of uncompensated care is estimated to be about $1,017 per insured family per year.(4)
Washington state is already working on creating an exchange. In 2011, the Legislature authorized the creation of an exchange and began to lay the groundwork (SB 5445). More measures were enacted this year to continue the work. Key provisions include leveling the playing field with insurance companies that operate outside the exchange by preventing them from offering only plans that enroll the healthiest people, and creation of a quality rating system so that consumers can rate the quality of their plan, access, services, and affordability (HB 2319).
Health and well-being are central to quality of life in Washington state. Major advances such as the creation of a health care exchange promote a healthy state and benefit us all.
Coming up: Look for our next post in the series tomorrow, where we will examine how the Federal Basic Health Option can make coverage more affordable for many Washingtonians.
1. Kaiser Family Foundation, State Action Toward Creating Health Insurance Exchanges, as of May 17, 2012. http://www.statehealthfacts.org/comparetable.jsp?ind=962&cat=17&sub=205&yr=1&typ=5
2. Those with employer-offered insurance are ineligible for tax credits within the exchange, unless the employer-offered insurance is deemed unaffordable or does not offer the minimum essential benefits.
3. Mike Kreidler, What’s at stake: The Affordable Care Act in Washington state: A county‐by‐county analysis (Washington state Insurance Commissioner, May 2012) http://www.insurance.wa.gov/legislative/reports/Whats-at-stake.pdf
4. Washington state Office of the Insurance Commissioner, State of the Uninsured, Health Coverage in Washington state (December, 2011). www.insurance.wa.gov/legislative/reports/2011-uninsured-report.pdf