Obamacare: The Exchanges, The Coverage, The Premiums, And The Legal Challenge That Could Shut It Down

Obamacare, if it survives, will represent the most comprehensive overhaul of the American healthcare system since the creation of Medicare in the mid 1960′s. I say, "if it survives" only because, if the system cannot properly facilitate enrollment, if the government cannot enforce its rules, and if the frustration level of the voting public reaches a certain point, Congress may decide to defund it. Additionally, new legal challenges have surfaced which appear credible enough to proceed.

In this article, we'll take a look at the health insurance exchanges, the levels of coverage, some premium examples, and what could happen if any of the new lawsuits succeed.

The Exchanges

Despite numerous differences between supporters and opponents, Obamacare does contain some common ground. The establishment of health insurance exchanges are one example. The exchanges will allow a comparison of premiums on plans with very similar coverage on one website. This should enhance transparency and increase competition which, absent other factors, would have a suppressing effect on premiums. However, many of these "other factors" are significant. Therefore, unless you qualify for a subsidy, it's unlikely your premiums will decrease.

All states were required to establish a healthcare exchange or opt out, in which case its citizens would be compelled to use the federal exchange. According to one source, 17 states have created their own exchange (includes the District of Columbia), 7 will use a "partnership marketplace," and 27 will use the federal exchange. This conflicts with a recent LA Times article which reported, "36 states have decided against opening exchanges for now." Whatever the exact number actually is, before a health insurance plan can be listed on an exchange, it must meet minimum federal requirements for qualified health plans.

States who have created an exchange will retain some discretion over minimum coverage requirements (MCR) and premiums. These states can also decide which policies are allowed on its exchange and which will be excluded. In addition, states with their own exchanges will be able to set higher MCRs and negotiate premium limits with insurers. In short, these states will have some control over their health insurance marketplace.

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