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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