There seems to be a lot of confusion on what the health exchange and PO provide so thought I would post this summary of the section of the bill that deals with it. This is not the actual text from the bill but a somewhat easier to read section by section explanation of it you can find the whole thing as well as lots of other info including the full text here
http://edlabor.house.gov/documents/111/pdf/publications/AHCAA-SECBYSEC-102909.pdfTITLE III —HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
SUBTITLE A – HEALTH INSURANCE EXCHANGE
Sec. 301. Establishment of Health Insurance Exchange; outline of duties; definitions. Establishes a Health
Insurance Exchange under the purview of the Health Choices Administration that will facilitate the offering of
health insurance choices. The Health Choices Commissioner establishes a process through which to obtain bids,
negotiate and enter into contracts with qualified plans, and ensure that the different levels of benefits are
offered with appropriate oversight and enforcement. The Commissioner also facilitates outreach and
enrollment, creates and operates a risk pooling mechanism, and ensures consumer protections.
Sec. 302. Exchange‐eligible individuals and employers. Defines who is eligible for participation in the Health
Insurance Exchange including employers and individuals. In year one, individuals not enrolled in other
acceptable coverage as well as small employers with 25 or fewer employees are allowed into the Exchange. In
year two, employers with 50 and fewer employees are allowed into the Exchange. In year three, the
Commissioner is, at a minimum, required to open the Exchange to employers with 100 and fewer employees,
but is permitted from this year forward to expand employer participation as appropriate, with the goal of
allowing all employers access to the Exchange.
Defines acceptable coverage to include enrollment in other qualified coverage and most other federal health
programs.
Prepared by Committees on Energy and Commerce, Ways and Means, and Education and Labor Nov. 2, 2009
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Medicaid‐eligible individuals will be enrolled in Medicaid, not the Exchange.
Once an individual or an employer enrolls in coverage through the Exchange, they remain eligible for Exchange
coverage even if circumstances change that would otherwise exclude them.
Requires that employers who offer coverage through the Exchange contribute at least the required contribution
toward such coverage and permit their employees the freedom to choose any plan within the Exchange.
Requires the Commissioner to conduct periodic surveys of Exchange‐eligible individuals and employers to
measure satisfaction.
Requires the Commissioner to conduct a study regarding access to the Exchange to determine if there are
significant groups and types of individuals and employers who are not Exchange eligible, but who would have
improved benefits and affordability if made eligible. The report is due in year three and year six of the Exchange
and continued thereafter. It is to include recommendations as appropriate for changes to the eligibility
standards.
Sec. 303. Benefits package levels. The Health Choices Commissioner specifies the benefits that must be made
available in each year – including a requirement that each participating plan provide one basic plan in each
service area in which they operate. It is then optional for the plan to offer one enhanced and one premium plan.
The differences between the three main plans (i.e. basic, enhanced and premium) are the levels of cost‐sharing
required, not the benefits covered. The Commissioner shall establish a permissible range of cost‐sharing
variation that is not to exceed plus or minus 10% with regard to each benefit category.
There is a fourth tier called premium‐plus. In this package, plans can offer extra benefits like dental or vision
coverage for adults, or other non‐covered benefits. To ensure consumers know what they are paying extra for,
these packages must detail the cost of the extra benefits separately. Plans may offer multiple premium‐plus
options.
States can require the application of state benefit mandates to all Exchange participating plans, but only if there
is an agreement with the Commissioner that the state will reimburse the Commissioner for any additional costs
of affordability credits in that state due to the State benefit requirements.
Sec. 304. Contracts for the offering of Exchange‐participating health benefits plans. Lays out the
responsibilities for the Health Choices Commissioner’s contracting authority including solicitation of bids,
negotiation with plans and the entering into contracts with approved plans (that will be for at least one year of
duration and can be automatically renewed). Requirements include that plans be licensed in the state in which
they will do business, abide by data reporting requirements as outlined by the Commissioner, provide for the
implementation of affordability credits, participate in risk pooling, provide for culturally and linguistically
appropriate services and communications, and with respect to the basic plan, contract for outpatient services
with essential community providers as defined in the 340B program. The Secretary has special authority with
respect to Indian enrollees and Indian health care providers.
The Commissioner outlines the bid process, the term of the contract is for a minimum of a year, and the
Commissioner enforces network adequacy including an allowance for enrollees to receive services out‐ofnetwork
at no greater cost if the provider network does not meet the standards for adequacy. Plans must also
justify proposed premiums or premium increases and through this rate review the Commissioner has the
authority to deny excessive premiums or premium increases.
Prepared by Committees on Energy and Commerce, Ways and Means, and Education and Labor Nov. 2, 2009
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The Commissioner is required to establish processes to oversee, monitor, and enforce requirements on the
plans. The Commissioner has the authority to terminate plans that fail to meet the required standards.
Sec. 305. Outreach and enrollment of Exchange‐eligible individuals and employers in Exchange‐participating
health benefits plan. Requires the Health Choices Commissioner to conduct outreach and enrollment activities
to ensure Exchange‐eligible individuals and businesses are enrolled into the Exchange in a timely manner,
including a toll‐free hotline, maintenance of a website, creation of outreach materials written in culturally and
linguistically appropriate language, and community locations for enrollment. Sets up an annual open enrollment
period as well as special enrollment periods for special circumstances. Requires the Commissioner to create an
auto‐enrollment process for individuals who are Exchange‐eligible but have not selected a plan.
The Commissioner provides for broad dissemination of information on Exchange‐participating health plans in a
comparative manner and can work with other appropriate entities to ensure the dissemination of this
information.
Establishes rules to ensure continuity of coverage for certain newborns in Medicaid and for children eligible for
CHIP. Requires the Commissioner to enter into memorandums of understanding with state Medicaid agencies
to coordinate enrollment in Medicaid and the Exchange for Medicaid‐eligible individuals.
Requires the Health Choices Commissioner to consult with the Small Business Administration and small
employer benefit arrangements to provide consumer information, outreach, counseling and technical assistance
with respect to participating in the Health Insurance Exchange.
Sec. 306. Other functions. The Health Choices Commissioner coordinates affordability credits and risk‐pooling.
In order to prevent waste, fraud and abuse, institutes a special inspector general to oversee operation of the
program.
Sec. 307. Health Insurance Exchange Trust Fund. Creates a Health Insurance Trust Fund to provide necessary
funding for the Health Choices Administration.
Sec. 308. Optional operation of State‐based health insurance exchanges. Permits states to offer their own
Exchange or join with a group of states to create their own exchange in lieu of the federal Health Insurance
Exchange, provided that the state(s) perform all of the duties of the federal Exchange as approved by the Health
Choices Commissioner. The Commissioner has authority to terminate state exchanges if they are not meeting
their obligations. Presumes that any State operating an Exchange prior to 2010 is allowed to continue doing so.
Sec. 309. Interstate health insurance compacts. Effective January 1, 2015, would allow 2 or more States to
form Health Care Choice Compacts to facilitate the purchase of individual health insurance across State lines.
Calls on the National Association of Insurance Commissioners to develop model guidelines for such compacts.
Ensures that such compacts require licensure in each state and maintains authority of the State in which a
covered individual resides to protect the individual. Allows States to apply for grants from the Secretary of HHS
to help implement such compacts.
Sec. 310. Health Insurance Cooperatives. Requires the Health Choices Commissioner to establish a “Consumer
Operated and Oriented Plan Program” known as the CO‐OP Program, to assist organizations that wish to start up
a non‐profit health insurance cooperative and provides start up loans for these organizations.
Prepared by Committees on Energy and Commerce, Ways and Means, and Education and Labor Nov. 2, 2009
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Sec. 311. Retention of DOD and VA Authority. Makes clear that nothing in this act interferes with the
Department of Veterans’ Affairs or Department of Defense’s existing authorities.
SUBTITLE B – PUBLIC HEALTH INSURANCE OPTION
Sec. 321. Establishment and administration of a public health insurance option as an Exchange‐qualified
health benefits plan. Requires the Secretary of Health and Human Services to develop a public health insurance
option to be offered starting in 2013 as a plan choice within the Health Insurance Exchange. It participates on a
level playing field with private plan choices. Like private plans, it must offer the same benefits, abide by the
same insurance market reforms, follow provider network requirements and other consumer protections.
Sec. 322. Premiums and financing. Premiums for the public option are geographically‐adjusted and are
required to be set so as to fully cover the cost of coverage as well as administrative costs of the plan. This
includes a requirement that the public option, like private plans, include a contingency margin in its premium to
cover unexpected cost variations. In order to establish the public option, there is an initial appropriation of $2
billion for administrative costs and in order to provide for initial claims reserves before the collection of
premiums such sums as necessary to cover 90 days worth of claims reserves based on projected enrollment.
These start up funds are amortized into the premiums for the public option to be recouped over the first 10
years of operation. The plan must be self‐sustaining after that initial funding.
Sec. 323. Payment rates for items and services. The Secretary of Health and Human Services negotiates
payment for health care providers and items and services, including prescription drugs, for the public health
insurance option. Medicare providers are presumed to be participating in the public option unless they opt out.
There are no penalties for opting out and providers have at least a one‐year period prior to the beginning of the
public option to opt out.
Sec. 324. Modernized payment initiatives and delivery system reform. The Secretary shall evaluate the
progress of payment and delivery system reforms and apply them to the public option and how it pays for
medical services to promote better quality and more efficient use of medical care. Such payment changes must
seek to reduce cost for enrollees, improve health outcomes, reduce health disparities, address geographic
variation in the provision of medical services, prevent or manage chronic illnesses, or promote integrated
patient‐centered care.
Sec. 325. Provider participation. Provides the Secretary of HHS with the authority to develop conditions of
participation for the public health insurance option. Providers must be licensed or otherwise recognized in the
state in which they do business. Physician participation comes in two types: preferred physicians are those
physicians who agree to accept the public option’s payment rate (without regard to cost‐sharing) as payment in
full, participating non‐preferred physicians are those who agree not to impose charges in excess of the balance
billing limitations as set forth by the Secretary. Providers must be excluded from participating in the public
option if they are excluded from other federal health programs.
Sec. 326. Application of fraud and abuse provisions. Applies Medicare’s anti‐fraud and abuse protections to
the public health insurance option.
Sec. 327. Application of HIPAA insurance requirements. Applies consumer protection standards put forth
under the Health Insurance Portability and Access Act to the public health insurance option.
Sec. 328. Application of health information privacy, security, and electronic transaction requirements.
Assures that privacy protections of existing law apply to the public health insurance option as well.
Prepared by Committees on Energy and Commerce, Ways and Means, and Education and Labor Nov. 2, 2009
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Sec. 329. Enrollment in Public Health Insurance Option is voluntary. Clarifies that no one is required to
participate in the public health insurance option – it is a voluntary choice.
Sec. 330. Enrollment in Public Health Insurance Option by Members of Congress. Makes clear that Members
of Congress are eligible to join the public health insurance option.
Sec. 331. Reimbursement of Secretary of Veterans Affairs. Calls on the Secretary of HHS to enter into a
memorandum of understanding with the Secretary of Veterans Affairs regarding the recovery of costs related to
non‐service‐connected care or services that are provided by VA to an enrollee in the public health insurance
option.
SUBTITLE C – INDIVIDUAL AFFORDABILITY CREDITS
Sec. 341. Availability through Health Insurance Exchange. Creates affordability credits to ensure that people
with incomes up to 400% of federal poverty have affordable health coverage. These credits are phased out
according to a schedule defined in the act as individual and family incomes up to 400% of poverty and the
credits apply only to Exchange‐participating plans. Affordability credits reduce the costs of both premium and
annual out‐of‐pocket spending. Individuals apply through the Commissioner or Health Insurance Exchange for
the credits, or through other entities approved by the Commissioner. The Commissioner, through an
agreement with the Commissioner of Social Security, must conduct a verification process to confirm citizenship
or lawful presence in the United States before any individual is eligible for affordability credits. In the first two
years, affordability credits can only be used to purchase a basic plan. After that, the Commissioner establishes a
process to allow them to be used for enhanced and premium plans in a way that makes clear the individuals
who select those options will be responsible for any difference in costs.
Sec. 342. Affordability credit eligible individual. In order to receive affordability credits, individuals must have
individual coverage through an Exchange‐participating health benefits plan (though not through an employer
purchasing coverage through the Exchange). Family and individual incomes must be below 400% of the federal
poverty limit to access the affordability credits, and the individual must not be eligible for Medicaid or enrolled
in Medicare or other acceptable coverage. In general, employees who are offered employer coverage are
ineligible for affordability credits within the Exchange. Beginning in year two, employees who meet an
affordability test showing that coverage under their employer‐provided plan would cost more than 12% of
income, are eligible to obtain income‐based affordability credits in the Exchange.
Sec. 343. Affordability premium credit. The affordability premium amount is calculated on a sliding scale
starting at 1.5% of income for those at or below 133% of poverty and phasing out at 12% of income for those at
400% of poverty. The way this phase out works is specifically detailed in the act. The reference premium is the
average premium for the three lowest cost basic plans in the area in which the individual resides. There is an
out‐of‐pocket maximum set at $500 for an individual and $1000 for a family at the lowest income tier rising to
$5,000 for an individual and $10,000 for a family at the highest income tier for individuals receiving affordability
credits.
Sec. 344. Affordability cost‐sharing credit. The affordability cost‐sharing credit reduces cost‐sharing for
individuals and families at or below 133% of poverty up to 400% of the federal poverty limit as specified in the
act.
Sec. 345. Income determinations. To determine income, the Health Choices Commissioner uses income data
from the individual’s most recent tax return. The federal poverty level applied is the level in effect as of the date
Prepared by Committees on Energy and Commerce, Ways and Means, and Education and Labor Nov. 2, 2009
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of the application. The Commissioner takes such steps as are appropriate to ensure accuracy of determinations
and redeterminations to protect program integrity. Processes are established for individuals with significant
changes in income to inform the Commissioner of such change. There are penalties for misrepresentation of
income. The Secretary of Health and Human Services is required to conduct a study examining the feasibility
and implication of adjusting the application of the federal poverty level for different geographic areas so as to
reflect the variations in the cost‐of‐living among various areas in the country.
Sec. 346. Special rules for application to territories. Creates a process by which a territory can elect to
participate in the Health Insurance Exchange and provides up to four billion dollars to fund affordability credits if
the territory adopts the insurance reforms, consumer protections, and other requirements for individual and
employer responsibility in the Act.
Sec. 347. No Federal payment for undocumented aliens. Prohibits anyone not lawfully present in the United
States from obtaining affordability credits.
TITLE IV—SHARED RESPONS
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