Impact of the PPACA Insurance Exchanges on the Marketplace for Health Coverage

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The Patient Protection and Affordable Care Act (“PPACA”) creates “insurance exchanges” that will be the enrollment mechanism for Medicaid, the sole source of federally subsidized health coverage, and – possibly – a significant new distribution channel for nonsubsidized individual and small group coverage.

The Exchange Provisions in PPACA -

PPACA requires that every state have an insurance “exchange,” structured either as a government agency or as a quasi-public/quasi-private entity. The exchange must begin operation by an October 1, 2013 open enrollment period for health coverage with a January 1, 2014 effective date. If a state does not establish an exchange, the federal Department of Health and Human Services (“HHS”) will operate a “federally facilitated exchange.” In addition, where a state is not prepared to perform all of the exchange functions, HHS and the state can jointly operate a “state partnership exchange.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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