HEALTH INSURANCE EXCHANGE 101

One of the main components of the Affordable Care Act (ACA) is the requirement for each state to develop a health insurance exchange that must be functional by January 1, 2014. It was announced last year, but what is it really all about? How will it affect you?

The ACA is designed to help create a  new competitive private health insurance market- through state-run health insurance exchanges- that will give millions of Americans and small businesses access to affordable coverage, and the same choices of insurance that members of Congress will have. A HEALTH INSURANCE EXCHANGE is essentially meant to be a marketplace for high-value coverage that will be:

• User-Friendly
• Transparent
• Stable

It will also:

• Allow individuals to compare plans within their state based on price and quality.
• Allow individuals and small business owners to pool their purchasing power to negotiate rates.

According to HealthCare.Gov, a federal government website managed by The U.S. Department of Health and Human Services, the health insurance exchange is designed to:

• Lower Costs: Exchanges will increase competition among private insurance plans through greater comparative shopping and more informed consumers. They will also provide small businesses the same purchasing power in exchanges as large businesses.
• Provide One-Stop Shopping: The exchanges will make purchasing health insurance easier by providing eligible consumers and businesses with tools to compare benefits, pricing and quality. Americans who choose to use them will also have access to a wide range of customer assistance benefits- including information about prices, quality, and physician and hospital networks-to help make the best choice for themselves, their families or their employees.
• Create Greater Benefits and Protections: Exchanges will create a health insurance marketplace that will allow employers and consumers to choose from plans offering high quality benefits. Individuals and families purchasing health insurance through exchanges may also qualify for tax credits and reduced cost-sharing depending on their income.

Here is a quick video explaining the exchange idea....

Quick Facts:

*Starting in 2014, members of congress will have to purchase health coverage through these marketplaces.

*2 states already running exchanges: Utah(visit the Utah Health Exchange) and Massachusetts (visit the Connector)

*States' costs of designing their exchange will be fully funded by the federal government through 2015.

*Standardized forms will be used.

*It will also be tied in with public programs like Medicaid.

As each state rolls out plans for their exchanges, more people will start to understand how they work. Until then, continue following the Exchange Learning Network for all things exchange, both locally here in Utah as well as nationally.