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A health insurance exchange is an organized marketplace for the purchase of health insurance set up as a governmental or quasi-governmental entity to help insurers comply with consumer protections, compete in cost-efficient ways, and to facilitate the expansion of insurance coverage to more people. Exchanges do not bear risk themselves – they are not insurers. Rather, they would contract with private insurers and possibly offer a public plan option to cover specified populations (such as those obtaining coverage through small employers and those without employer coverage).
Ideally, an exchange would promote insurance transparency and accountability, facilitate enrollment and the delivery of subsidies, while also playing roles in spreading risk (i.e., ensuring that the costs associated with those with high medical need are shared broadly) and containing costs.[1] However, with too restricted eligibility and a market share too small, it could raise premiums, encourage cherry-picking in customers, and force a clearance of the exchange. This is what happened in Texas and California in their failed exchanges.[2]
Some experts believe that insurance exchanges can make markets more efficient, providing oversight and structure, because current health insurance markets are not well organized and have to deal with wide variations in coverages and requirements among different companies, employers, and policies.[3]
Barack Obama's plan
President Barack Obama promoted the concept of a health insurance exchange as a key component of his health reform initiative. Obama stated that it should 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, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest."[4]
See also
- Health care reform in the United States
- Health care compared - tabular comparisons of the US, Canada, and other countries not shown above.
References
- ^ Urban Institute, "Policy Jargon Decoder"
- ^ McGarr, Cappy (2009-10-05). "A Texas-Sized Health Care Failure". The New York Times. http://www.nytimes.com/2009/10/06/opinion/06mcgarr.html. Retrieved 2009-10-06.
- ^ Blumberg, Linda and Karen Pollitz. "Health Insurance Exchanges: Organizing Health Insurance Marketplaces to Promote Health Reform Goals", Urban Institute, April 1, 2009
- ^ "President Obama Reiterates Support for Public Option and Health Insurance Exchange," "Organizing for America", June 3, 2009
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