Connecticut is one six states approved by the federal government to operate an online exchange where individuals and small businesses can buy health coverage starting Oct. 1, 2013.
Administrators for the U.S. Centers for Medicare & Medicaid Services announced the approval Monday afternoon. Colorado, Massachusetts, Maryland, Oregon and Washington also received conditional approval.
A health exchange is a critical part of the Affordable Care Act passed by Congress in 2010. It changes the way health insurance is sold by centralizing the sale of health plans into a public online marketplace for each state. People will still be able to buy health coverage outside of the public exchange through other channels. States that don’t have an exchange up and running in time for the Oct. 1 enrollment period, when people buy coverage for 2014, may use a site offered by the federal government.
For many Americans, who have health insurance through an employer or a union or some other group, the process of getting health insurance won’t change. The health exchange is for individuals and small groups, and it is intended as a way to homogenize the shopping experience by giving plans coverage ratings that anyone can understand. The exchange also is intended to drive competition between health plans.
“Ten months from now, Americans in every state will begin signing up for affordable, quality health insurance in new state marketplaces,” Marilyn Tavenner, acting administrator of the U.S. Centers for Medicare & Medicaid Services, told reporters during a conference call Monday.
So far, 14 states and Washington D.C. have declared that they want to operate state-based health exchanges, including the six that were approved. The states approved Monday were earlier than other states in submitting their applications.
“This is not a reflection on whether any other state will be approved, or any other state’s progress toward having an exchange,” said Gary Cohen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services. “It’s purely a matter of who came in first and who we got to first.”
Since the Affordable Care Act was passed, Connecticut has received $116 million in federal funds to design and build its health exchange.
“While other states waited for events such as the [U.S.] Supreme Court ruling or the election to spur action, Connecticut did the right thing and aggressively pushed forward with launching a state based Exchange for its residents,” Gov. Dannel P. Malloy said in a prepared statement. “To do anything less would have been a disservice to those in our state who don’t have insurance, or struggle to afford the coverage they have.”
Lt. Gov. Nancy Wyman chairs the exchange board of directors.
“This approval shows that we are continuing to make rapid, concrete progress in bringing about much needed improvements for consumers in our state’s health insurance market,” Wyman said. “While the majority of states are still grappling with how to move forward with health reform, all Connecticut residents should be encouraged by the progress we have made on this hugely important issue.”
The exchange still has yet to receive health plans to offer for sale. It will also function to tell people if they qualify for Medicaid, Medicare or a federal subsidy that applies to people up to 400 percent of the federal poverty level, which is $44,680 for an individual and $92,200 for a family of four.