New information has been released this week regarding how the health insurance exchanges will actually function. People have been wondering for quite some time now about how the exchanges will help them. This week, new grant money has been given to states, and new rules have been explained.
This week, the Obama administration allocated $185 million in the form of a grant. The grant money is going to be split between thirteen states, and the District of Columbia. The money is to be used to set up the new health insurance exchanges in those states. One of the expenses involved in setting up the exchanges has to do with purchases of technology.
This new batch of grant money is in addition to the $1 million dollars worth of planning grants that came from the Department of Health and Human Services. That money went to forty-nine states, (and the District of Columbia). Some of those states have since given back the grant money, (instead of using it to create their state’s health insurance exchange).
People have been wondering how the health insurance exchanges, which should be ready in 2014, will work for consumers. This week, some more information has been released that might answer at least a few questions.
The health insurance exchanges will be something that an individual can use in order to find a health insurance policy that the person can afford. Families will also be able to use the exchanges in order to find a health insurance policy that covers their needs. Small employers can use the exchanges in order to find a health insurance plan that they can offer to their employees. I don’t see anything so far that indicates that large employers can use the exchanges.
It is expected that more than 20 million Americans will be eligible to get a subsidy that will help them to pay for health insurance (that they find through the exchanges). New rules require the exchanges to use some of the government databases that are already being used in order to verify an individual’s income and residency status.
In other words, the exchanges will use the Social Security program’s database, and the one that is set up for food stamps. If it is determined that a person’s has low-income, and is eligible for the Medicaid program, then that is the type of health insurance this person will be signed up for.
Beyond that, it is expected that around 20 million people will be eligible to receive a subsidy in order to purchase health insurance. The average amount of money that comes from the subsidy is going to be $5,000 per year. A family of four, that has an income that is under 400% of the poverty level (or, around $88,000), will automatically be eligible for a subsidy.
The eligibility process is supposed to be done “in real time”. This means that people will not be waiting around in order to learn if they are eligible, or if they are not.
Image by Colin Dunn on Flickr