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KSM Blog | Katz, Sapper & Miller CPA

Update on the Status of Indiana Exchange

Posted 4:03 PM by

Community rating and federal operation of the Indiana exchanges will likely effectuate the most change in the price Hoosiers pay in health insurance premiums.

A community rating, in its simplest form, is a means to price insurance-based risk relative to a given geographic area rather than a group of employees. For example, if an employee of a small business lives in Indianapolis, the insurance premium she would pay on the exchange would be based on a rating of the risk within her community. Presently, insurance companies add factors particular to small business – specifically medical history, size of business, and health status – to calculate the insurance premium. Starting Jan.1, 2014, all insurers selling individual or small business insurance must use the "adjusted community rating" (ACR) for all policies within a given geographic area (community). This means insurance can only use age, tobacco use, size of family (single or family) and the community rating to calculate premiums offered on the exchange. 

The U.S. Department of Health and Human Services (HHS) outlined three exchange models. Indiana has chosen the “federally operated exchange." As such, the HHS will operate the exchange. Individual coverage through the exchange will begin in every state on Jan. 1, 2014, with enrollment beginning Oct. 1, 2013.  An Indiana Department of Insurance official told lawmakers that while the exchange still has a long way to go, the government expects it to be up and running on Oct. 1, 2013.

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Katz, Sapper & Miller’s Healthcare Resources Group serves healthcare providers, including physicians, hospitals and health systems, surgery centers, and long-term care facilities. Our team of healthcare professionals has the scope and depth to meet client needs. Learn more.

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