In June 2009, President Obama described his vision for a health insurance marketplace as a one-stop shop for health insurance where Americans can compare prices, and choose the plan best suited for them. In this marketplace, none of the health insurance plans offered would deny people coverage on the basis of preexisting conditions, and all of the plans would be affordable. Such a marketplace would give Americans a better range of health insurance choices, make the health care market more competitive, and improve accountability from health insurance companies.’[i]
To implement the health insurance marketplace, the President signed on March 23, 2010 into law the Affordable Care Act, which was upheld by the Supreme Court. Key features of the Affordable Care Act include: ending exclusions for children under the age of 19 due to pre-existing conditions, allowing coverage for young adults under the age of 26 under their parent’s health plan, ending the possibility that insurers cancel coverage because of mistakes, allowing individuals the right to request reviews of denial of payment, ending lifetime limits on health insurance coverage, requiring insurance companies to publicly justify unreasonable increases in insurance premiums, reducing the costs of administration to ensure health insurance premiums are spent primarily on health care, allowing preventive health services to be offered without copayment, allowing individuals to choose the primary care doctor they want from their plan’s network, and allowing people to seek emergency care in hospitals outside of their health plan’s network.
Today, consumers can now access the health insurance marketplace by going to the federal site at HealthCare.gov in most states. In the health insurance marketplace, there are over 13,000 plans to choose from, and over 180 participating insurance carriers.
The current “Open Enrollment Period” in the health insurance marketplace is from November 1, 2015 to January 31, 2016. People are required to enroll by the 15th of the current month in order to have coverage by the start of the coming month. For example, if one signs up by December 15, coverage will begin on January 1, 2016. However, if one enrolls later than December 15, one has to wait until February 1, 2016 for coverage to begin.
Unfortunately, overall the Affordable Care Act has not been easy to implement; people have been overloaded with inaccurate information, making it difficult for them to know their options, compare plans, and enroll in plans that match their income and their coverage needs. [ii] It is important for individuals to educate themselves about the health insurance marketplace because the new law imposes fines on those who do not have health insurance, determined either as a proportion of one’s income or as a penalty of $695 for each adult in the household. Parents would also be required to pay a penalty of $347.50 for each child. All penalties are applied for each person in the household who was uninsured.
Overall, the health insurance marketplace and the Affordable Care Act have increased the number of newly insured people. Since the Act was launched, there have been an estimated 22.8 million newly insured persons; however, an estimated 5.9 million persons lost coverage, resulting in a net gain of 16.9 million newly insured individuals.[iii]
The increase in new membership in individual plans and in Medicaid plans has expanded the health insurance industry revenue to $743 billion in 2014 up from $641 billion in 2013 before a large part of the law was implemented.[iv] However, much of the growth has not been profitable for all insurers as, overall, the industry experienced an estimated loss of $2.5 billion, or on average $163 per consumer enrolled, in the individual market in 2014. This year, some health care insurance carriers expect to lose money on their marketplace business. It is possible that the losses are due to the increase in the number of people who are not fully healthy and who now have access to insurance. Prior to the Affordable Care Act, only those with high income, perfect health and no pre-existing conditions could obtain coverage,[v] resulting in significant profits for insurance companies.