More than three years after the Affordable Care Act was signed into law, one of the most critical elements of the health care law goes into effect on Tuesday when open enrollment begins on 51 different state-based, online insurance marketplaces.'
In the next five years, more than 20 million Americans are expected to enroll in a private insurance plan through the online marketplaces, referred to as exchanges. As many as 7 million are expected to use the exchanges in just the next six months.
Still, the exchanges are just one element of the sweeping health care law. Many Obamacare changes have already gone into effect, while other major reforms remain on the horizon. In the past three years, the Obama administration and Congress have modified the law, scrapping some major parts and delaying others. Republicans, meanwhile, have remained focused on dismantling the law in any way possible.
With so many moving parts, it’s worth reviewing what happens on Oct. 1 and what doesn’t:
What is happening Tuesday?
Beginning on Oct. 1, Americans looking for health coverage should be able to enroll in a private insurance plan through a state-based exchange—online marketplaces where consumers can in theory comparison shop for health coverage, “just like you would for cell phone plans or plane tickets,” as President Obama said in August.
The exchanges will be different in each state. In 16 states and Washington, D.C., state officials have decided to run their own exchanges, with their own regulations. The 34 remaining states will have their exchanges run fully or partially by the federal government. Depending on the regulations in the state, the insurers that decide to join the exchange, and a variety of other factors, consumers could see a range in prices and options available.
Of the 7 million expected to sign up for insurance on the individual market via the exchanges, as many as 6 million are expected to qualify for tax credits. The exchange websites should be able to give customers estimates of the tax credits they qualify for.
States are also opening on Oct. 1 exchanges on which small business owners can purchase coverage for their employees.
Have there been any glitches?
Mr. Obama and members of his administration have readily acknowledged that, as with any government program, the rollout will not be flawless.
Not every state, for instance, is ready to launch their small business exchange. On the federally-run small business exchanges, meanwhile, small businesses will be able to compare their options online but will initially have to mail or fax in their applications.
Additionally, the Spanish-language version of healthcare.gov won’t be ready for open enrollment for another few weeks.
Some state-run exchanges—such as the exchanges in Oregon and the District of Columbia—are also announcing delays due to technical problems.
What is not happening?
To begin with, patients purchasing insurance on the exchange won’t be covered until January 1. That corresponds with the start of the individual mandate—the requirement for most Americans to acquire health coverage or pay a fine to the IRS.
Also on Jan. 1, several states will expand Medicaid, which is currently a joint federal-state program, to cover all residents who fall below 138 percent of the poverty line. A number of consumer protections begin in Jan. 1, such as the rule barring insurers from turning away people with pre-existing conditions and the end of yearly limits on coverage.
A number of provisions of the Affordable Care Act have already gone into effect, including new preventive services for women, prescription drug discounts for seniors, and consumer protections such as the rule requiring insurers to spend at least 80 percent of the money they collect from premiums on actual health care rather than overhead.
Another major provision called the employer mandate—which requires employers with at least 50 full-time employees to offer their workers insurance or pay a fine of $2,000 per employee—has been delayed a year. The employer mandate was supposed to go into effect in 2014, and delaying the rule will cost the government an estimated $10 billion.