This guide provides an overview of the South Dakota Health Insurance Exchange including the history of the exchange, how the exchange will operate, and exchange information for South Dakota residents and small businesses.
South Dakota Health Insurance Exchange - Introduction
Beginning in 2014 as part of the Affordable Care Act (ACA), health insurance coverage for individuals and small businesses will become available through new state health insurance exchanges (also called health insurance marketplaces).
Most importantly, the key tax credits (e.g. the small business healthcare tax credits) and tax subsidies (e.g. individual health insurance tax subsidies) will only be available for coverage purchased through a state health insurance exchanges.
All states have three options for setting up an exchange for 2014:
- Build a state-based exchange,
- Enter into a state-federal partnership exchange, or
- Default to a federally-facilitated exchange.
South Dakota will default to a federally-facilitated health insurance exchange. The South Dakota Health Insurance Exchange will open for enrollment on October 1, 2013, with coverage starting January 1, 2014.
South Dakota Health Insurance Exchange - History
In September 2012, Governor Dennis Daugaard announced that South Dakota would not establish an exchange, citing cost as the major factor. South Dakota will default to a federally-run exchange, however the state will retain oversight over plan management including review and certification of the all insurance plans offered through the exchange.
South Dakota Health Insurance Exchange - What is It?
The South Dakota Health Insurance Exchange will be operated through a federally-run health insurance exchange, also called the Health Insurance Marketplace. Starting in October 2013, South Dakota residents will be able to access information about all the plans available through the Exchange. The SHOP Exchange will also be available to South Dakota small businesses with fewer than 100 employees.
A key part of the South Dakota Health Insurance Exchange is that eligible individuals and families will be able to access individual premium tax subsidies, capping the cost of their premium between 2% to 9.5% of income. Individuals qualify if their household income is up to 400% of the federal poverty level, and they are not offered qualified, affordable insurance through their employer. The Exchange will also screen for Medicaid and public assistance programs. These premium tax subsidies will only be available through the Exchange.
According to an estimate by healthcare.gov, 92,441 or 13% of South Dakota’s non-elderly residents are uninsured.
South Dakota Health Insurance Exchange - What Plans will be Available?
All plans offered through the South Dakota Health Insurance Exchange will meet the ACA definition of a Qualified Health Plan (QHP). The plans will be offered by level of coverage for essential health benefits (EHB), to allow consumers to compare plans on an "apples to apples" basis.
The four "metal" levels are: Bronze (plan pays 60%), Silver (plan pays 70%), Gold (plan pays 80%), and Platinum (plan pays 90%).
Insurance carriers and plan rates will go through a formal rate review process, and are expected to be finalized this summer.
South Dakota Health Insurance Exchange - Role of Insurance Professionals & Navigators
The South Dakota Health Insurance Exchange will follow federal guidelines for insurance professionals selling policies through the Exchange and for navigators assisting consumers and small businesses.
Insurance professionals will be able to register with the Exchange and receive any commissions directly from the carriers (using their Exchange ID number and NPN).
The Exchange navigator program will assist consumers in making choices about their health care options and accessing their new health care coverage, including access to premium tax credits for eligible consumers.
More details on the South Dakota Health Insurance Exchange insurance broker and navigator programs are expected this summer.