A Look at the State Health Insurance Exchange

One of the key features of the healthcare reforms is the formation of the Health Insurance Exchange. An Exchange is an insurance market place which provides a platform for the direct interaction between the insurance companies and the residents.

A health Exchange will have to follow the guidelines mandated by the federal government to be eligible for the federal funds. Some of these guidelines include:

- Ensuring that every plan displayed on the Exchange is in accordance with the federal and state regulations
- Ask insurers to justify rate hikes and suspend companies and suspend companies whose justification seems unreasonable
- Provide resources and the internet to those who do not have access so that they know more about the Exchange and the health insurance plans being sold on it
- A 24*7 call center that can answer the queries of residents, brokers, navigators and health insurance companies
- The use of standard form , definition and marketing materials

The Exchange will have different types of health plans, with varying benefits on each of them. The different categories that will be available on the health insurance Exchange are:

1. Bronze Plan: 60% of the costs with HSA out-of-pocket limits
2. Silver Plan: 70% of the costs of the plan with HSA out-of-pocket limit
3. Gold Plan: 80% of the costs of the plan
4. Platinum Plan: 90% of the costs of the plan with the HSA limit

5. Catastrophic Plan: For those below the age of 30 and are exempted from the mandatory purchase of health policy

The biggest advantage of health insurance Exchange is that it houses the cheapest medical policies. It is also a resident's best bet if he is on the lookout for authentic information on health plans, health insurance, government sponsored policies and functioning of the Exchange. However, the state based online platform has a few other added benefits as well such as:

- Standardized plans that makes comparison across companies easier
- Information about federal subsidies and citizens' eligibility
- Delinking of employment and health coverage
- More choices ensure that consumers get the best value for money
- Affordable plans and acceptance of every application ensures that an increased number of residents have access to medical policies

The health Exchange will completely change the way residents look at their health coverage. It will make insurance more affordable and almost scam free. However, the biggest drawback of the Exchange is that initially only individuals and small firms with 50 or less employees can purchase plans from the state based online platform. Similarly, only those health insurance companies who abide by the federal guideline and spend at least 80% of premium dollars on providing healthcare will be allowed to display their products on the exchange.

The Exchange will be a big step in regulating the health insurance sector in the country. It will make the market more competitive and it will the residents who will stand to gain by getting the best deals on their health plans.

Shaun Mike is an expert on health insurance and is currently studying about the intricacies of the state health exchange that are to be formed soon.