Some call it an "exchange." The federal government prefers the term "marketplace."
But whatever you call it, an online site for people to shop for health insurance under the Affordable Care Act is scheduled to be up and running Oct. 1. Like a bargain travel website, the exchange will offer shoppers a choice of plans and levels of coverage from different insurance carriers. For low- to middle-income earners, subsidies will be available to make the premium affordable.
Put simply, the exchange will be a way for working- and middle-class people to buy coverage if they don't already get it from an employer or Medicaid. It will be mandatory for the 1.3 million currently uninsured Pennsylvanians. Those who don't enroll will be fined — $95 the first year and nearly $700 in 2016.
With little more than two months before the exchanges open, technical and logistical challenges abound, leaving some to wonder if they will be ready to go by the deadline.
While insurance shoppers in New York, Massachusetts and some other states are already mulling over premiums, Pennsylvanians will remain in the dark about the costs until the program is unveiled in October. The state is among 27 that decided not to create their own systems but to rely on the federal government to set them up.
Joanne Grossi, the regional Health and Human Services Department director, said consumers need not panic. They'll have 10 weeks, until Dec. 15, to choose a plan if they want coverage to start on Jan. 1, 2014. They'll have six months, until March 31, 2014, before enrollment closes. And enrollment will reopen on Oct. 15, 2014.
For insurance and government officials, the pressure is on. For the exchange to work, a number of things have to happen in the next 10 weeks:
•A critical mass of insurance companies need to offer coverage to make the marketplace competitive. The Obama administration isn't saying how many companies are enough, just that the exchange promotes more choices through better competition.
•A host of government and business computer systems have to be able to talk to each other. The government is still testing a "hub" that is supposed to direct a consumer's application for insurance to a number of agencies including the Internal Revenue Service, the Department of Homeland Security, the Social Security Administration and others to verify the applicant's status and information.
• A mix of government leaders, insurers, agency workers and volunteers need to educate as many of the 26 million Americans — including about 900,000 Pennsylvanians — who are required to buy insurance and qualify for help. Those seeking insurance will need to know about options and penalties for not signing up.
Behind the scenes, a political power play has Obamacare opponents pledging to continue efforts to derail the law. Last week two votes were taken in the House of Representatives to suspend the requirement to buy insurance. The votes are essentially symbolic, since House members know the Democrat-controlled Senate will not take them up.
The federal government is striving to make the process seamless. It has set up a 24-hour "health insurance marketplace" help line. It also is hiring navigators who will provide information on choices and encouraging human service agencies to hold programs in libraries, community centers, hospitals and other places where consumers can get one-on-one help to pick a plan.
MIT economics professor Jon Gruber advised the government on the writing of the Affordable Care Act as well as its forerunner, the Massachusetts health insurance law signed by then-Gov. Mitt Romney. He predicts most people using the system will be satisfied, but that problems are inevitable.
Glitches are most likely to occur in the subsidy program, he said, which is what happened when the government implemented Medicare Part D, the program covering seniors' prescription drugs, nearly 10 years ago. When that program rolled out, seniors experienced widespread trouble with computer glitches and improper denial of benefits. With that experience in mind, Gruber said he expects it will take a year to work out the kinks in the exchanges.
If consumers have an unpleasant buying experience because they don't understand the process or encounter glitches, they may back out and not try again, said Jennifer Tolbert, director of state health reform at Kaiser Family Foundation, a nonprofit focused on health care. That would be problematic since the more consumers in the marketplace, the more successful it will be.
A little help
Depending on their income level, some shoppers will qualify for benefits to subsidize the cost of insurance. Obamacare provides two types of subsidies: a tax credit to lower the cost of the monthly premium payment, and a cost-sharing program to help pay for out-of-pocket charges such as deductibles.
To be eligible for subsidized coverage, a consumer's income has to be between 100 and 400 percent of the federal poverty level, $11,490 to $45,960 for a single person in 2013. The closer to 100 percent of the poverty level, the greater the subsidy.
The subsidies also will cause confusion because of another part of the health care law involving Medicaid, the state-federal health insurance program for the poor, the disabled and children.
The Affordable Care Act was written anticipating that each state would expand its Medicaid program, with the help of federal money, for individuals and families with incomes up to 138 percent of the poverty level. But the U.S. Supreme Court ruled last year that states could not be required to expand Medicaid.