A Framework of Health Insurance Exchange

The Patient Protection and Affordable Care Act will soon make it mandatory for all states to have a state-based health insurance Exchange. These Exchanges will be federally funded and will serve as a regulated shopping arena where health insurance plans are bought and sold.

The health insurance though governed by the state authorities will be funded by federal dollars. Hence, all states Exchanges have to follow a few guidelines that are mandated by the federal government. Some of these requirements are:

- Has to inspect policies to make sure that each health plan displayed on the Exchange adhere to the standards set by federal and state insurance regulatory bodies
- Needs to ask for a justification from health insurance companies when there is an unreasonable rise in premiums. The Exchange even has the power to disqualify a company from the online platform if it finds the explanation unsatisfactory.
- For those who do not have access to the Internet, the Exchange must provide other alternatives for these residents to get information
- Must use a standard form and language in all definition, communication and marketing materials
- It must have a 24*7 call center that is capable of clearing all doubts that residents, customers and insurance companies might have

The sale and purchase of health insurance plans is not the only reason why insurance Exchanges are being set up in every state of the country. The other major functions of a state health insurance Exchange include:

1. Encourage competition between the health insurance companies participating in the Exchange which in turn will ensure that the consumers get the best value on their money
2. Must provide transparent and the most authentic information about health plans, rates, benefits, eligibility and any other query that anyone accessing the Exchange might have
3. Assist and facilitate in the enrollment and payment of plans for those who do not have any kind of support.
4. Delink medical coverage from employment and thus insurance backing even when a customer is between jobs or is between jobs.
5. By implementing a strictly regulated insurance market place, the Exchange is expected to make the federal reforms more effective.

Creating a regulated health insurance market place is expected to bring in a few more benefits than envisioned by the federal government. Some of these benefits are:-

- Comparison across companies would become easier with all plans having standardized benefits
- Access to information about federal subsidies and government plans will encourage those residents who are eligible for them to choose such plans
- There will be more choice and flexibility for small firms looking for group coverage for their employees.
- The power will be in the hands of consumers who will now have access to the cheapest plans, more choices and wider variety of benefits to choose from.

Health insurance Exchanges are expected to completely change the way Americans have looked at their health plans till date. There will be more regulations, more choices, more flexibility and lesser scams, hurdles and complications.

Shaun Mike is well known authority on healthcare software in the US. He is currently looking to expand his expertise to health insurance and other health insurance exchange available.