An Overview of the State Health Insurance Exchange

The Patient Protection and Affordable Care Act provide for the formation of health insurance Exchange or Health Exchange, as they are popularly known in every state. The Exchange will function as an insurance market place various insurance companies operating in the state can display their products and sell them directly to the consumers.

The health Exchange will also serve as a knowledge center where consumers and brokers can get all the information about the various health plan options available. The mandatory 24*7 call center of the Exchange will facilitate the sell and purchase of medical coverage and will dispel any myths that the consumers and companies may have about health insurance.

Though the Exchange will be expanded to all categories later on, the Exchange will be limited to individuals and small firms looking to purchase group coverage for their employees initially. Similar only those health companies whose products comply with the norms set by the Act will be allowed to display their health plans on the Exchange.

The health Exchange will not be limited to being just an insurance marketplace, but will have several ancillary functions as well to ensure that the best interests of the consumers are protected. Some of the other duties of the state health Exchange will include:

- Promote competition among the insurance companies that will ensure that the consumers can purchase medical policies at the most competitive prices

- Provide transparent, authentic and easy to understand information about health plans, insurance regulations, hikes in premiums, government sponsored programs, etc.

- Provide assistance to consumers that will facilitate easy purchase of health plans from the Exchange

- Delink employment and medical policies that will ensure that residents have coverage even when they are between jobs

- Bring in more insurance regulations that will support the effective implementation of the Affordable Care Act.

Though the health Exchange will usher in a few guidelines for the health plans and the health insurance companies, it has to follow a few regulations itself to be eligible for federal funding:

1. Inspect policies to check that they comply with the federal insurance regulations

2. Should ask insurance companies to justify unreasonable premium hikes and can bar them from the Exchange if unsatisfied with the explanation

3. Provide resources to those who do not the Internet to access information through other mediums such as mails and community announcements.

4. Must use standard form, definition and marketing materials

5. A call center that operates 24*7 and serves the consumers effectively

The health Exchange will be administered by the state government but will be funded by federal dollars. It will be up and running by 2012 and has to be completely functional by 2014. Though the details will vary from state to state the basic structure will remain same across the country. This is to ensure that the regulations of the individual states are adhered to and yet the federal guidelines are followed as well.

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.