A health insurance exchange is a set of state-run, standardized medical care plans, where residents of the US can buy health insurance policies that qualify for federal subsidies. According the the Patient Protection and Affordable Care Act, these exchanges are legally set to be in place by January 1, 2014. This means every state will offer its own exchange, and therefore provide the most affordable solution for those in need (or required by law to obtain) health insurance.
“These exchanges will create an online, one-stop shopping mall where consumers, employers, insurance brokers and others will view competing health plans side by side. By doing so, exchanges are designed to provide more value-based purchasing, more affordability and greater choice.” (Goldstein, Employee Benefit Adviser News)
Those who sell health insurance must stay informed, as these options will greatly affect the market. Changes in exchanges will definitely bring a new set of information, and customers need to be filled in. Each state will decide on their own approach: creating and maintaining their own exchange or following the federal fallback program. They can also take the federal fallback route temporarily while formulating the exchange of their preference.
- Public or private exchanges can positively affect employer provided health insurance plans by simplifying the process. They no longer have to decide on a single plan for all employees, as the exchange manages this task for them, and ensures overall premium affordability. Sounds like a plan!
- “Exchanges will be sold directly through brokers and through a still-undefined network of navigators.” (Goldstein) Which means agents will still be in business. PPACA doesn’t want to eliminate the aspect of trust and expertise in selecting a health insurance plan.
- Some health exchanges in place have already proven successful, such as CaliforniaChoice. This exchange has already been in place for 16 years and has helped 10,000 employers and 150,000 individuals by providing quality coverage.
It seems the best way to approach these changes is to keep everyone (agents and clients alike) in the know so that when January 1, 2014 rolls around there are no surprises, except for how affordable health insurance may happen to be.