Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance. They will offer a choice of different health plans, certifying plans that participate and providing information to help consumers better understand their options. Beginning in 2014, health insurance exchanges will serve primarily individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future. States are expected to establish Exchanges--which can be a government agency or a non-profit organization--with the federal government stepping in if a state does not set them up. States can create multiple Exchanges, so long as only one serves each geographic area, and can work together to form regional Exchanges. The federal government will offer technical assistance to help states set up Exchanges.
At a health insurance exchange, individuals can easily compare the different features that are available with each type of insurance plan. For example, they can look at the different deductibles, co-pays, co-insurance, and prescription plans that are available. They can also look for plans that have medical facilities in their area.
The idea of health insurance exchanges was part of the Affordable Care Act passed under President Barack Obama. Obama promoted health insurance exchanges as a good way for people to shop for health insurance and find the best deal for their families and businesses. The hope is that insurance companies will be more transparent and open upfront with customers. When they have to compete with each other on level ground, it gives them more of an incentive to be honest with customers and do what they can to bring in customers.