April 23rd, 2013

Health Care Exchanges, also called Small Business Health Options Programs (SHOPs), are a cornerstone of the (PPACA) or ObamaCare. SHOPs expected to be formed in October 2013 and functional by January, 2014.

What is a SHOP?

It is a system to purchase health insurance for individuals who are not eligible through their employer, who don’t receive coverage through a government plan, or for small businesses to purchase competitively priced insurance plans for their employees.

Ideally, a SHOP will offer consumer-friendly benefit packages at competitive prices. Levels of coverage include bronze, silver, gold and platinum, each with a rising price tier. Private insurance is obligated to offer at least a silver and gold tier.

Intending transparency, and as a clearinghouse of consumer health information, the SHOPs are also expected to better monitor insurance accountability.

What might this mean for you?

While PPACA mandates exchanges to be regulated at the state level, the way they are created seems ambiguous. Individual states may form their own exchanges for which they are granted access to government subsidies. More than 25 states have opted out of managing an exchange due to incomplete information on how they would work or because of high costs, leaving the federal government to step in to manage it. There are simply too many questions and few firm answers.

Further, because of the lack of clarity on the legislation, glitches and loopholes arise. Lack of clarity leans toward delays in processing of information and claims, for starters.

Many employees will be covered under their employer or through the exchange utilizing subsidies, but coverage for their families may come into question. What is being called the ObamaCare Glitch may result in employee dependents being locked out of affordable health care. In fact, it is expected to affect as many as 500,000 children, especially those with special needs.

Regard also the myth of the stabilized health insurance premium. The New York Times reports that the unclear language involving SHOPs is allowing health insurance premiums to soar, sometimes in double digits, in many states where regulators do not have the authority to lower or deny rates. Florida and Ohio insurers raised rates nearly 20 percent for some policy holders.

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