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Few States Choose to Operate Health Insurance Exchanges

Doug Desjardins, February 15, 2013

Giving states a roadmap
Designed by Palo-Alto based technology firm IDEO, Enroll UX 2014 is designed to provide consumers with a website that's user-friendly and intuitive, with simple, direct questions posed in chronological order.

"To get started, consumers will be asked a number of questions starting with, 'Who is your current doctor'?" said Karp. "And once they answer that question, they'll be given a list of insurance plans their doctor accepts starting with plans that are the most affordable."

The exchanges will also need to be secure, since consumers will be providing financial information in order to qualify for federal subsidies. The subsidies will be available to individuals and families with annual incomes of up to 400% of the federal poverty level.

According to an analysis from the Kaiser Family Foundation, subsidies will be available in six separate increments ranging from 2% to 9.5% of premiums as a percentage of income. The subsidies will be based on the cost of second-lowest priced 'silver plan' available, which is defined as "a plan that provides essential benefits and has an actuarial value of 70."

As an example, the Kaiser Foundation said a 45-year-old woman with an annual income of $28,735 would pay $5,733 per year for the second-lowest cost plan but would receive a tax credit of $3,420 at the end of the year, leaving her with an annual premium of $2,313.          

Since all health insurance exchanges are required to follow the same guidelines outlined by the PPACA, most will share a similar infrastructure. And many are being designed by the same technology firms. IBM, CGI Technologies and Solutions, and Accenture are involved in insurance exchange projects in more than a half-dozen states.

While technology firms work on building the information pipelines, health officials in each state are recruiting insurers to sell their products on the exchange and crafting plans to set rates. In California, which will operate the largest exchange in the nation, state health officials have received bids from 33 different health plans interested in selling insurance plans on its Covered California exchange.

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