As part of the Patient Protection and Affordable Care Act, the federal government will create a high-risk pool for adults with preexisting conditions who have been uninsured for at least six months. Premium subsidies will be available for individuals to participate in such a pool.

The program may be established directly or by contracting with nonprofit private entities or states that apply and are selected. Premiums for the pool will be established for a standard population, with a cap on cost-sharing. The federal government will appropriate $5 billion to finance this program. The pool will expire on Jan. 1, 2014 when the American Health Benefit Exchanges are implemented.

Per the law, the American Health Benefit Exchanges will provide consumers with information to enable them to choose among health plans, and offer premium and cost-sharing subsidies to make coverage more affordable. Plans in the exchanges will be required to offer benefits that meet a minimum set of standards. Insurers will offer four levels of coverage that vary based on premiums, out-of-pocket costs, and benefits beyond the minimum required, plus a catastrophic coverage plan.

States must offer at least two multi-state health plans in each exchange, including one offered by a non-profit entity. They may opt to form regional exchanges with other states. Separate exchanges for small employers to purchase insurance also will be created. The Office of Personnel Management will negotiate these contracts, similar to how the Federal Employee Health Plan Benefits Program plans are negotiated. If any state fails to establish an exchange, the Secretary of Health and Human Services will do so.

The Secretary must establish the certification criteria for qualified health plans and develop a rating system for them.