What exactly is a health insurance exchange and how does it work?
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Asked September 24, 2012
Health insurance exchanges were developed with the intention of making it easier for people to find affordable health insurance. Health insurance exchanges are one of the results of the extensive healthcare overhaul called the Affordable Care Act and commonly referred to as Obamacare.
Health insurance exchanges are supposed to be voluntarily set up and maintained by each state's department of insurance. However, since the formation of these exchanges is not mandatory, the federal government will offer interim health insurance exchanges for those states which choose to opt out of this part of the ACA. When the exchange is created, all health insurance companies in the state would join it, and consumers shopping for health insurance would be allowed to use the exchange to make finding and affording health insurance easier. The idea is that health insurance exchanges will increase the competitiveness between insurers, causing the rates to decline over time. The long-term goal of having health insurance exchanges is to reduce the cost of health insurance. Analysts have suggested that the cost of health insurance should go down by somewhere between 7% and 10%.
Health insurance exchanges are also a source of shopping and research. Consumers who use the exchange can compare rates between companies, get useful information about health insurance and how it works, and then choose the insurance company which best fits your needs. Because all health insurance companies have the ability to join an exchange, consumers can see how one company compares to compare HMO coverage to PPO plans, and research specific questions about their health insurance. You will also be able to review such information as the number and type of complaints filed against individual insurers.
Health insurance exchanges will not replace other health insurance programs. If you already have health insurance, exchanges will give you a way to compare rates and make sure that you are getting the best price for your coverage, but they will not affect your existing coverage. This increased competition will make it easier for small companies to afford to institute health insurance plans, increasing the level of health insurance available to people who may have had trouble finding insurance in the past.
Answered September 24, 2012 by Anonymous