YOU ASK:

How will health insurance exchanges work under new federal health care legislation?

WE ANSWER:

To put it simply, health insurance exchanges will sell insurance.

The health insurance exchanges (that will be established as part of the implementation of the new health care reform bill) are places where you can get coverage at competitive prices. It is aimed to give more choices to you, the consumer, by allowing you to do comparison shopping, even as you are armed with the information you need to make your decision.

The health insurance exchanges will also establish regulations to ensure that insurance companies "toe the line" and avoid abusive practices such as arbitrarily raising the premiums or denying coverage to those who get sick.

Here's how it works, in a nutshell.

  • State autonomy. The federal government will decentralize the exchanges and leave the decisions to the state. The state will receive funding from the central government but it will be the one to establish the exchange. It may also decide to let a private institution run the exchange for the state. The only time the federal government will step n is if the exchange run by state does not meet minimum standards.
  • Improved access to health insurance. When in the past, those who can only buy on the individual market find it hard (and expensive!) to get insurance, now these can have the same kind of access as those who are employed.
  • Comprehensive and high-value products. The exchange will give people access to insurance that is affordable to all. In fact, to keep things interesting to the consumer, the exchange has the job of providing as much good "stock" or "merchandise" for the consumer to choose from.
  • Special accommodations for the uninsured. The exchange should also ensure that uninsured people will finally get the coverage they need, even if it means automatically enrolling them in a plan and providing subsidies so that they can afford to be in the plan.
  • Personal benefits specialists. To help you buy insurance, the exchange will act as your personal benefits specialist, who will negotiate for you and secure a plan that best suits your needs and budget.
  • Participation of health insurance providers. Now, don't worry that health insurance companies will be pushed out of the picture. On the contrary, they will be part of the exchange. They will be the ones who will supply the insurance plans. But there will be a more competitive atmosphere, since the exchange allows people to compare different plans available.
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