Question: Why is the Exchange an essential part of Obamacare?
Answer: Many large California companies like Cisco, as well public entities like CalPers and labor unions, create their own private health insurance exchanges. These private exchanges provide the employees of that company a side-by-side comparison of the different insurers’ from which to choose. The health insurance plans permitted on the exchange are typically chosen by the company’s employee-benefit department. Since insurance carriers compete to be included, the employer can regulate these companies’ behavior during and after the enrollment period.
Covered California was created in a sincere attempt to offer millions of low-income and uninsured Americans the health benefit choices enjoyed by workers at large US companies, government entities, and unions. The objective is to help those with family incomes above 133 percent of the federal poverty level (currently about $30,000 for a family of four) buy guaranteed-issue, community-rated, federally-subsidized, private health insurance.
The Exchange will do almost the same thing that big companies do for their employees for those who don’t get their healthcare at work. The Exchange will decide which health plans they’ll offer, make it easy for users to compare coverage and select a plan, and assist in enrollment in a private health insurance plan through the Exchange.