Explaining Health Insurance Exchange

Explaining Health Insurance Exchange

The health reform acts that President Obama signed into law in the spring of 2010 call for the creation of health insurance exchanges. Many people are not exactly sure what this means. According to a letter President Obama wrote to Senator Ted Kennedy, he wants the health insurance exchanges to be “a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that’s best for them.” This function is actually very similar to what insurance brokers currently do right now. However, some people do not know that they can shop around with the assistance of an insurance broker, for the same price as they could if buying directly from a health insurance provider. So at this time, the federal government wants to set up these health insurance exchanges, which is how members of Congress and their families choose their health insurance plans.

The idea of health insurance exchanges is to better organize the information out there about health insurance plans, to improve transparency within the health insurance industry, and to set it up in a more competitive market, in order to drive prices down. This would also allow for regulating some policies and procedures for the offering and pricing of health insurance plans. Another main goal of health insurance exchanges is to better educate the American public as to their health insurance options, help them become more familiar with the insurance vocabulary, and make