Health Insurance Exchange Basics
The Affordable Care Act (ACA) and its related rules and regulations require health insurance exchanges to fulfill two basic functions. (1) They must facilitate purchase of individuals’ health insurance coverage in qualified ACA health plans, and (2) they must provide for the establishment of Small Business Health Options Programs (SHOPs) to enable small employers to offer health insurance to their employees. Health insurance exchanges are fundamentally designed to become competitive marketplaces in which individuals and small employers can directly compare price, quality, and other factors in health plans offered by private providers. After individuals and small employers have finished their comparison shopping, as it were, and selected their options, they will be able to purchase the insurance they selected through an exchange. In other words, an exchange will offer “one-stop shopping” for investigating options and purchasing health insurance.