Health insurance exchanges offer a pool of policy choices to cover illness and hospitalization.
Health care in the United States has been a major topic of political debate since the administration of Richard Nixon in the 1970s. The U.S. Census Bureau reported in 2009 that the number of Americans without health insurance increased between 2008 and 2009. The debate over providing affordable health insurance includes exploration of insurance policies and the ways insurance is marketed in the United States. An insurance exchange offers one of the possible national insurance reforms.
The Model
Health insurance exchanges offer people a menu of health care plans, standardized and regulated by the states, some of which may qualify for federal government funds in the form of subsidies. Exchanges do not provide insurance. The state programs select insurance companies to participate in the exchanges based on the criterion of meeting consumer needs and a determination that each insurance company operates with an eye toward cost efficiency. The theory of exchanges includes spreading high costs for select health care users over a wider base of insured participants. This practice lowers the cost for the insured who are at high risk for disease or those insured while undergoing expensive health treatment and care. In essence, the healthy subscribers subsidize care for the ill, making the program affordable for all.
Private Health Insurance
Private health insurance companies must agree to offer policies on the health care exchange. Private health insurance includes both health plans purchased by the individual and health insurance plans offered by employers or unions. The number of people with private health insurance declined from 255.1 million in 2008 to 253.6 million in 2009, according to the Census Bureau. Of the Americans covered by private insurance, 55.8 percent paid for insurance coverage as part of an employee-based health plan. The largest decline in the number of Americans without private health insurance included people at the lowest and highest income levels.
Health Care Exchange History
Several states, notably Texas and California, have experimented with statewide exchanges. The Massachusetts Connector health care program, the Utah Health Exchange, Indiana's Indiana Health Information Exchange and the Health Pass in New York can also be classified as health care exchanges. The Massachusetts program requires mandatory resident participation and provides low-cost or no-cost coverage for low-income residents who qualify under the program. Utah's and Indiana's programs offer only an online resource for information.
Patient Protection & Affordable Health Care Act of 2010
The Patient Protection and Affordable Health Care Act of 2010 incorporated the concept of health insurance exchanges. This Act, signed on March 23, 2010, institutes changes that include the establishment of a national health care exchange by January 1, 2014. Workers at companies not offering health insurance in 2014 can purchase plans from an open national insurance exchange. Members of Congress will also purchase insurance through the same exchange.
Tags: health insurance, health insurance, insurance exchanges, Affordable Health, Affordable Health Care, Americans without, Care 2010
