Healthcare 101: Exchanges

Posted on November 28, 2012. Filed under: Government and Healthcare, HCAHPS, Post By Christy Whipple |

Each state electing to establish an Exchange must adopt the federal standards in law and rule, and have in effect a state law or regulation that implements these standards.

Again this week, the U.S. Department of Health & Human Services has extended the deadline for states to decide whether they will create and run a health insurance exchange. States have until December 14th to alert HHS if they will establish their own exchange. If so, they also must submit a blueprint for the system. This is a hot topic, but do we really understand the principles of the Exchange? This breakdown provides an overview of the key components.

Creation of Health Insurance Exchanges

Beginning on January 1, 2014 health insurance exchanges will be created where an individual or small business can compare the costs of various health plans and different types of health coverage benefits. If a state decides not to operate its own health insurance exchange, residents who are U.S. citizens and legal immigrants will be eligible to purchase a health plan from a multi-state, or regional exchange run by a government agency or a non-profit organization.

Individual State Exchanges

Each state electing to establish an Exchange must adopt the federal standards in law and rule, and have in effect a state law or regulation that implements these standards. If a state elects not to establish an Exchange, or if the HHS determines on review that state efforts to establish an Exchange have not made sufficient progress to be fully operational by January 1, 2014,  the ACA requires the Department of Health and Human Services (HHS) to establish and operate one in that state.

Qualified Health Plans (QHPs)

Exchanges should be designed to provide qualified individuals and small businesses with access to an insurers’ QHPs. QHPs are described in the ACA as a type of health plan that is subject to a specified list of requirements related to marketing, choice of providers, plan networks, essential benefits, and other features. QHP issuers will have to be licensed by each state in order to be eligible to provide coverage within their boundaries, and offer at least one QHP at the silver or gold level of coverage.

Multi-State Health Plans

Each health insurance exchange must offer at least two health plans that are available in two or more states. At least one of these health plans must be a non-profit organization and be licensed in each state. Enrollment in one of these plans would give access to healthcare services in different states.

Consumer Operated and Oriented Plan

The health reform bill will provide loans and grants to create non-profit, member-run health insurance companies known as Consumer Operated and Oriented Plans (CO-OPs).

One-Stop Shopping and Information Resource

An anticipated benefit of the health insurance exchanges is easier to purchasing and enrollment in a health plan or health coverage for employees. The health reform law recommends that states contract with “navigators” to provide information about the available health plans and to assist with enrollment.

Affordability 

If a resident cannot afford to purchase a plan in an exchange, they may be eligible for a subsidy from the government based on your income and family size. If yearly income is higher than 133% of the federal poverty level but less than 400% of the poverty level (about $43,000 for an individual), individuals will get a tax credit to help pay for health plan’s premiums and out-of-pocket expenses.


Introcomm provides custom communications solutions for the admissions and discharge processes. To learn more about how Introcomm can assist your hospital with HCAHPS, patient experience, exchanges and improving your patients’ perception of quality care (with little to no additional out of pocket expense), please contact us today to schedule our complimentary educational webinar.

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