Texas: A Federally-facilitated Health Insurance Marketplace
A central component of the Affordable Care Act is the establishment of a Health Insurance Marketplace (formerly known as an Exchange) in each state. Accessible via an online platform, the Marketplace will provide a venue for consumers and small businesses to compare and purchase insurance coverage options and learn whether they are eligible for federal insurance subsidies.
Each state is expected to have its Marketplace up and running by the beginning of the "open enrollment period," October 01, 2013. Coverage is slated to go into effect on January 01, 2014.
States have been given several options to establish a Marketplace:
- State-based Marketplace: A state can establish and operate its own Marketplace.
- State Partnership Marketplace: A hybrid option in which the federal Department of Health and Human Services (DHHS) takes on some responsibilities and key tasks, but in which states retain the ability to make key decisions and tailor the Marketplace to local needs and market conditions.
- Federally-facilitated Marketplace: States which do not select either of the above options will default to a federally-facilitated program in which the federal DHHS assumes full responsibility for the establishment and operation of the Marketplace in that state.
To date, 26 states -- including Texas -- have defaulted to a Federally-facilitated Marketplace. This means that the Texas Health Insurance Marketplace will be operated entirely by the federal government. The federal DHHS will collaborate with the Texas Health and Human Services Commission (HHSC) to properly coordinate the referral of applicants between the Texas Health Insurance Marketplace and the comission's own application system for Medicaid and CHIP (which Texas will retain control over).
Texas has the option to move to a State Partnership or State-based Marketplace at any time, and can do so through either legislation or an executive order from the Office of the Governor. The federal government has advised that it will take approximately a year for a state to complete the necessary preparation, planning, and readyness training to move from a federally-facilitated model to a State-based Marketplace.
The Big Debate: Texas Medicaid Expansion
Another core component of the Affordable Care Act is the expansion of Medicaid to low-income adult citizens with incomes below 138% of the federal poverty level (FPL), roughly $32,000 annually for a family of four. This expansion, however, is only optional for each state and Texas is currently undecided as to whether it will expand much-needed coverage to this population.
Medicaid expansion in Texas would extend coverage to non-disabled citizen adults below 138% of FPL, or 1.5 million uninsured Texans, including many low-income parents and caretakers who do not currently qualify.
The federal government has made it extremeley affordable for Texas to extend coverage to this population. Federal funds would cover 100 percent of the expansion for the first three years, and no less than 90 percent in subsequent years.
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