What Exactly are Health Insurance Shopping Exchanges?

Health insurance shopping exchanges could be compared to a farmer’s market. Providers participate in the marketplace, and customers shop, compare, and buy health insurance plans through the exchange. The health insurance shopping exchange is there to assist small companies or individuals that are not able to afford coverage. It is not meant to replace group or individual insurance.

Free Insurance Comparison

 Secured with SHA-256 Encryption

Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

Full Bio →

Written by

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

Full Bio →

Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

The third stage of the Healthcare Reform law that went into effect on January 1, 2014 created health insurance shopping exchanges.

This step encourages states to establish an exchange that is regulated by the state’s department of insurance, but it does not make doing so mandatory. Instead, states can either set up an exchange of their own, join together with other states to form a coalition, or choose not to have a state-based exchange. In this third instance, the federal government would implement the exchange for states that do not wish to do so.

In their most simple form, health insurance shopping exchanges could be compared to a farmer’s market for insurance. All of the companies participating in health insurance programs within the state belong to the exchange, and someone looking for the best price on an insurance package can readily compare the companies to find the best deal available.

Consumers are not required to buy health insurance through the exchange, but can instead use it as a shopping tool to help them refine their search and reduce the number of insurers they have to choose from as well as comparing the types of policies and their coverage options.

Another aspect of insurance exchanges will be that consumers have more information available about a potential insurer. Where rates and the policy details were once the only information available to individuals, the insurance exchange will provide information about specific insurers, organized so that consumers can easily cross check information between two or more companies.

For example, this data could include the frequency and type of consumer complaints the company receives.

Health insurance shopping exchanges are being created to promote more competition among insurers, driving the price of coverage plans down. With the ability to compare prices and coverage plans, all insurance shoppers, including small businesses and low-income individuals, will have easy access to information, helping them make a knowledgeable choice about their healthcare coverage without breaking the bank.

The overall goal remains to reduce the average cost of health insurance by 7-10 percent, which translates to lower premiums for consumers without sacrificing level of care.

When health insurance companies participate in a competitive marketplace, people gain access to affordable insurance and insurance companies gain newly insured individuals, which offsets
the cost of providing that insurance at a lower price.

Finally, health insurance exchanges will not replace existing health insurance programs. If you have health coverage through your employer or an organization, you will not have to change insurance plans.

The health insurance shopping exchange is there to assist small companies or individuals that are not able to afford coverage. It is not meant to replace group or individual insurance. In fact, insurance exchanges are expected to significantly lower the cost of purchasing health insurance in the aggregate and could potentially lower the price of plans across the board.

Free Insurance Comparison

Compare quotes from the top insurance companies and save!

 Secured with SHA-256 Encryption