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Small Business Employee Benefits and HR Blog

How the Affordable Care Act (ACA) Varies by State

ACA varies by state JPGThe Affordable Care Act (ACA) is about to take a major step with the state health insurance marketplaces opening for enrollment on October 1, and with multiple ACA provisions coming into effect in January. 

This article provides a general overview on what parts of the ACA will affect everyone - regardless of where they live - and what parts of the ACA will depend on the state you reside in.

How the Affordable Care Act is the Same in Every State

The ACA requires every state to set up a health insurance exchange, also called a health insurance marketplace. States had the decision whether to set up their own exchange, partner with the federal government, or use the federally-run exchange.

Through these health insurance exchanges, individuals, families, and small businesses can register and enroll onto a health insurance plan. As part of the individual mandate, all US citizens will be required to be enrolled in a health insurance plan or pay a tax penalty in 2014.

In every state, the health insurance exchanges will be offering tax subsidies on premiums to those who meet certain income requirements. The eligibility requirements for the premium tax subsidies are the same no matter which state you live in. To see what these requirements are, and figure out if you are eligible for these tax credits see this article on premium tax subsidies.

All plans, regardless of state, will fall into one of five levels of coverage: Bronze, Silver, Gold, Platinum, or Catastrophic. Each of these levels is defined by the actuarial value of the plan, which is as follows:

  • Bronze: Plan pays 60%
  • Silver: Plan pays 70%
  • Gold: Plan pays 80%
  • Platinum: Plan pays 90%

All insurance plans offered through the health insurance exchanges will cover a set of 10 essential health benefits and will be guaranteed-issue. The only properties that health insurance companies will be allowed to vary premium rates on are: age, region, and tobacco use. Medical history and pre-existing conditions will no longer affect eligibility or prices of individual health insurance plans.

How the Affordable Care Act Varies by State

Even with all of these similarities, each person's experience will differ depending on which state you reside in. Here are three key differences of the ACA state-to-state:

  1. How the Health Insurance Exchange is run: As mentioned previously, each state had the option to design their own exchange, partner with the federal government, or default to the federally-run exchange. If your state is defaulting to the federally-run exchange model, then the exchange website (for employees, employers, and brokers) is www.healthcare.gov. If your state is running its own health insurance exchange, it will have its own website. Look up your state's health insurance exchange website here.

  2. Medicaid Expansion: Under the ACA states can decide whether or not they will expand eligibility for Medicaid coverage. The ACA proposed that Medicaid coverage expand to the entire population earning at or under 138% of the Federal Poverty Level (FPL). However, this Medicaid expansion provision was deemed unconstitutional in 2012. As a result, each state was given the choice to participate in Medicaid expansion or not. Currently, 22 states are expanding Medicaid. Look up your state's participation in Medicaid expansion here.

  3. Health Plan Availability and Cost: The availability and cost of health plans will also vary by state. Why? Each state has their own exchange, and different regional populations and demographics. Likewise, each state will have varying number of providers and number of plans. The prices of plans are going to differ depending on which state you live in, and even which region of your state you live in. Many states have sample health insurance exchange rates available, and all states will have final health plan rates available for comparison and enrollment beginning October 1, 2013.

What questions do you have about the Affordable Care Act and its impact state-to-state? Leave a comment below.

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