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August 2012

Is a Health-Insurance Exchange Coming to You?

Venturing into a discussion on the federal Affordable Care Act (ACA) can quickly get a person into the political deep weeds. This “Consumer Checkpoint” column is not intended to focus on the politics—but rather on the implementation—of the ACA.

On June 30 the U.S. Supreme Court held that the law is constitutional and that federal and state implementation may continue. Of course, Wisconsin and voters nationwide will decide if they want this direction changed on November 6. However, significant parts of the law are already being implemented that impact millions of consumers, including provisions prohibiting insurers from rejecting applicants because of pre-existing conditions and allowing children to be covered under their parents’ health insurance plan until they reach 27.

Added to those arguably popular provisions is the requirement that states begin to create state health-insurance exchanges so that they start operating on January of 2014. These online state health-insurance exchanges are intended to allow consumers to shop for a variety of health care plans online and are particularly directed at the 46 million Americans who currently do not have health insurance.

Whatever your view is of the ACA, the state health-insurance exchanges could provide a powerful new consumer tool because it will provide a place where consumers can shop for health insurance based on “apples-to-apples” pricing and product comparisons.

Today many consumers use insurance brokers and agents in the process of buying health insurance. We do not yet know what role insurance brokers and agents will play in the exchange. However, no one is required to purchase through the exchange and we can expect many consumers will continue to rely on brokers and agents for advice on what health care insurance plan is right for them.

Wisconsin is one of 15 states not moving forward to create a state health-insurance exchange. Rather, Republican Governor Scott Walker, an opponent of the Affordable Care Act, is stating he will wait until after the November presidential election before deciding whether Wisconsin will create its own state health-insurance exchange.

State Attorney General J.B. Van Hollen, also a Republican, has given his opinion that the state must begin moving forward to implement the Affordable Care Act’s provisions. However, he notes that there are different implementation time frames for different provisions. Regarding state health-insurance exchanges, the state must decide by November 16—only 10 days following the election—whether it will move to create the state exchange. Otherwise, federal law is clear that the federal government will then step in and create an exchange for Wisconsin consumers.

The ACA’s Consumer Operated and Oriented Plans, or CO-OP,”program provides up to $3.4 billion in federal loans to create new nonprofit (not necessarily cooperative) health insurers, all in an effort to promote consumer-driven competition. Milwaukee’s Common Ground Healthcare Cooperative is one of the earliest loan recipients and it hopes to begin offering health insurance in early 2014 to individuals and small employers.

This issue will no doubt will stay in the political spotlight throughout the rest of this year.

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