In the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

, health insurance marketplaces, also called health exchanges, are organizations in each state through which people can purchase

health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...

. People can purchase health insurance that complies with the

Patient Protection and Affordable Care Act A patient is any recipient of health care services that are performed by healthcare professionals. The patient is most often ill or injured and in need of treatment by a physician, nurse, optometrist, dentist, veterinarian, or other health ...

(ACA, known colloquially as "Obamacare") at ACA health exchanges, where they can choose from a range of government-regulated and standardized health care plans offered by the insurers participating in the exchange. ACA health exchanges were fully certified and operational by January 1, 2014, under federal law. Enrollment in the marketplaces started on October 1, 2013, and continued for six months. 8.02 million people had signed up through the health insurance marketplaces. An additional 4.8 million joined Medicaid. Enrollment for 2015 began on November 15, 2014, and ended on December 15, 2014. As of April 14, 2020, 11.41 million people had signed up through the health insurance marketplaces. Private non-ACA health care exchanges also exist in many states, responsible for enrolling 3 million people. These exchanges predate the Affordable Care Act and facilitate insurance plans for employees of small and medium size businesses.

Background

Health insurance exchanges in the United States expand

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...

coverage while allowing insurers to compete in cost-efficient ways and help them to comply with

consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...

laws. Exchanges are not themselves insurers, so they do not bear risk themselves, but they do determine which insurance companies participate in the exchange. An ideal exchange promotes insurance transparency and

accountability In ethics and governance, accountability is equated with answerability, culpability, liability, and the expectation of account-giving. As in an aspect of governance, it has been central to discussions related to problems in the public secto ...

, facilitates increased enrollment and delivery of

subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...

, and helps spread risk to ensure that the costs associated with expensive medical treatments are shared more broadly across large groups of people, rather than spread across just a few beneficiaries. Health insurance exchanges use

electronic data interchange Electronic data interchange (EDI) is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders, advance ship notices, and invoices. Technical standards for EDI exist to ...

(EDI) to transmit required information between the exchanges and carriers (trading partners), in particular the ''834'' transaction for enrollment information and the ''820'' transaction for premium payment.

History

Health exchanges first emerged in the private sector in the early 1980s, and they used computer networking to integrate claims management, eligibility verification, and inter-carrier payments. These became popular in some regions as a way for small and medium-sized businesses to pool their purchasing power into larger groups, reducing cost. An additional advantage was the ability of small businesses to offer a range of plans to employees, allowing them to compete with larger corporations. The largest such exchange prior to the ACA is CaliforniaChoice, established in 1996. By 2000, CaliforniaChoice's membership included 140,000 individuals from 9000 business groups. Obamacare maintained the concept of health insurance exchanges as a key component of health care. President Obama stated that it should be "a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest." Although the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entities. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often ...

had sought a single national exchange as well as a public option, the

(ACA) as passed used state-based exchanges, and the public option was ultimately dropped from the bill after it did not win filibuster-proof support in the Senate. States may choose to join together to run multi-state exchanges, or they may opt out of running their own exchange, in which case the federal government will step in to create an exchange for use by their citizens. ACA was signed into law on March 23, 2010. The law required that health insurance exchanges commence operation in every state on October 1, 2013. In the first year of operation, open enrollment on the exchanges ran from October 1, 2013, to March 31, 2014, and insurance plans purchased by December 15, 2013, began coverage on January 1, 2014. For 2015 open enrollment began on November 15, 2014, and ended on February 15, 2015.

Initial launch

On the date the Patient Protection and Affordable Care Act of 2010 was enacted, only a few health insurance exchanges across the country were up and running. Among them were the Massachusetts Health Connector, the New York HealthPass - a non-profit exchange, and the Utah Health Exchange. Advocates claim these exchanges make these "markets" more efficient, providing oversight and structure, arguing that previous health insurance markets in the United States are poorly-organized and deal with wide variations in coverages and requirements among different companies, employers, and policies. It was unknown how many people in total successfully enrolled in the first week. The federal marketplace website was scheduled for maintenance on the weekend. CGI Group came under media scrutiny as a developer behind several marketplace websites, after numerous issues surfaced with the federal health insurance marketplace, HealthCare.gov. On October 1, 2013, the state-run marketplaces also opened to the public, and some of them reported first statistics. During the first week of enrollment: * 28,699 people enrolled in the California health plan marketplace * 17,300 people enrolled in the Kentucky health plan marketplace * More than 40,000 people enrolled in the NY State of Health marketplace * On October 8, 2013, ''

The Seattle Times ''The Seattle Times'' is an American daily newspaper based in Seattle, Washington. Founded in 1891, ''The Seattle Times'' has the largest circulation of any newspaper in the state of Washington and the Pacific Northwest region. The Seattle Time ...

'' reported that more than 9,400 people had enrolled in the Washington health plan marketplace. However, a later report clarified that many included in that count were

Medicaid Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by U.S. state, state governments, which also h ...

enrollees. By October 21, 2013, only 4,500 Washington residents had enrolled in private insurance through the state marketplace.

Postponement of tax penalty

On October 23, 2013, ''

The Washington Post ''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...

'' reported that Americans with no health insurance would have an additional six weeks before they would be penalized. That deadline was extended to March 31, and those who do not enroll by then may still avoid incurring penalties and getting locked out of the healthcare enrollment system this year. Exemptions and extensions apply to: * Those living in states that use federal exchange, who may avail themselves of a "special entrollment period" that allows individuals to avoid penalties and enroll in a health plan by checking a blue box by mid-April 2014, stating they tried to enroll before the deadline (doing so provides a yet-undetermined amount of time to actually sign up after that). The ''

New York Post The ''New York Post'' (''NY Post'') is an American Conservatism in the United States, conservative daily Tabloid (newspaper format), tabloid newspaper published in New York City. The ''Post'' also operates three online sites: NYPost. ...

'' reports: "This method will rely on an honor system; the government will not try to determine whether the person is telling the truth". State-run exchanges have their own rules; several will be granting similar extensions. * Members of the Pre-Existing Condition Insurance Program, who were given a one-month extension until the end of April 2014. * Those who have successfully applied for exemption status based on criteria published by HealthCare.gov, who are not required to pay a tax penalty if they don't enroll in a health insurance plan.

Impacts

Implementation of the individual exchanges changed the practice of insuring individuals. The expansion of this market was a major focus of ACA. Over 1.3 million people had selected plans for 2015 marketplace coverage in the first three weeks of the year's open enrollment period, including people who renewed their coverage and new customers. As of January 3, 2014, 2 million people had selected a health plan through the health insurance marketplaces. By April 19, 2014, 8.0 million people had signed up through the health insurance marketplaces and an additional 4.8 million joined Medicaid. As of February, 2015, about 11.4 million people had signed up for or been automatically renewed for 2015 marketplace coverage. Today, more than 1,400 local outreach events have been conducted in federally facilitated marketplace states across the country.

Patient Protection and Affordable Care Act regulations

* Insurers are prohibited from discriminating against or charging higher rates for any individual based on pre-existing medical conditions or gender. * Insurers are prohibited from establishing annual spending caps of dollar amounts on essential health benefits. * All private health insurance plans offered in the Marketplace must offer the following essential health benefits:

ambulatory care Ambulatory care or outpatient care is Health care, medical care provided on an outpatient basis, including diagnosis, observation, consultation, treatment, intervention, and rehabilitation services. This care can include advanced medical technolog ...

emergency services Emergency services and rescue services are organizations that ensure public safety, security, and health by addressing and resolving different emergencies. Some of these agencies exist solely for addressing certain types of emergencies, while ot ...

, hospitalization (such as surgery), maternity and newborn care,

mental health Mental health is often mistakenly equated with the absence of mental illness. However, mental health refers to a person's overall emotional, psychological, and social well-being. It influences how individuals think, feel, and behave, and how t ...

and

substance abuse Substance misuse, also known as drug misuse or, in older vernacular, substance abuse, is the use of a drug in amounts or by methods that are harmful to the individual or others. It is a form of substance-related disorder, differing definition ...

services,

prescription drugs A prescription drug (also prescription medication, prescription medicine or prescription-only medication) is a pharmaceutical drug that is permitted to be dispensed only to those with a medical prescription. In contrast, over-the-counter drugs ca ...

, rehabilitative and habilitative services (services to help people with injuries, disabilities, or chronic conditions to recover), laboratory services, preventive and wellness services, and

pediatric Pediatrics (American English) also spelled paediatrics (British English), is the branch of medicine that involves the medical care of infants, children, adolescents, and young adults. In the United Kingdom, pediatrics covers many of their youth ...

services. * Under the individual mandate provision (sometimes called a "shared responsibility requirement" or "mandatory minimum coverage requirement"), individuals who are not covered by an acceptable health insurance policy will be charged an annual tax penalty of $95, or up to 1% of income over the filing minimum, whichever is greater; this will rise to a minimum of $695 ($2,085 for families), or 2.5% of income over the filing minimum, by 2016. The penalty is prorated, meaning that if a person or family has coverage for part of the year they won't be liable if they lack coverage for less than a three-month period during the year. Exemptions are permitted for religious reasons, for members of health care sharing ministries, or for those for whom the least expensive policy would exceed 8% of their income. Also exempted are U.S. citizens who qualify as residents of a foreign country under the IRS foreign earned income exclusion rule. In 2010, the Commissioner speculated that insurance providers would supply a form confirming essential coverage to both individuals and the IRS; individuals would attach this form to their Federal tax return. Those who aren't covered will be assessed the penalty on their Federal tax return. In the wording of the law, a taxpayer who fails to pay the penalty "shall not be subject to any criminal prosecution or penalty" and cannot have

lien A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...

s or levies placed on their property, but the IRS will be able to withhold future tax refunds from them. * In participating states, Medicaid eligibility is expanded; all individuals with income up to 133% of the

poverty line The poverty threshold, poverty limit, poverty line, or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for ...

qualify for coverage, including adults without dependent children. The law also provides for a 5% "income disregard", making the effective income eligibility limit 138% of the poverty line. States may choose to increase the income eligibility limit beyond this minimum requirement. As written, the ACA withheld ''all'' Medicaid funding from states declining to participate in the expansion. However, the Supreme Court ruled in '' National Federation of Independent Business v. Sebelius'' (2012) that this withdrawal of funding was unconstitutionally coercive and that individual states had the right to opt out of the Medicaid expansion without losing ''pre-existing'' Medicaid funding from the federal government. For states that do expand Medicaid, the law provides that the federal government will pay for 100% of the expansion for the first three years, then gradually reduce its subsidy to 90% by 2020. fifteen states—

Alaska Alaska ( ) is a non-contiguous U.S. state on the northwest extremity of North America. Part of the Western United States region, it is one of the two non-contiguous U.S. states, alongside Hawaii. Alaska is also considered to be the north ...

Alabama Alabama ( ) is a U.S. state, state in the Southeastern United States, Southeastern and Deep South, Deep Southern regions of the United States. It borders Tennessee to the north, Georgia (U.S. state), Georgia to the east, Florida and the Gu ...

Georgia Georgia most commonly refers to: * Georgia (country), a country in the South Caucasus * Georgia (U.S. state), a state in the southeastern United States Georgia may also refer to: People and fictional characters * Georgia (name), a list of pe ...

Idaho Idaho ( ) is a landlocked U.S. state, state in the Pacific Northwest and Mountain states, Mountain West subregions of the Western United States. It borders Montana and Wyoming to the east, Nevada and Utah to the south, and Washington (state), ...

Indiana Indiana ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Michigan to the northwest, Michigan to the north and northeast, Ohio to the east, the Ohio River and Kentucky to the s ...

Iowa Iowa ( ) is a U.S. state, state in the upper Midwestern United States, Midwestern region of the United States. It borders the Mississippi River to the east and the Missouri River and Big Sioux River to the west; Wisconsin to the northeast, Ill ...

Louisiana Louisiana ( ; ; ) is a state in the Deep South and South Central regions of the United States. It borders Texas to the west, Arkansas to the north, and Mississippi to the east. Of the 50 U.S. states, it ranks 31st in area and 25 ...

Mississippi Mississippi ( ) is a U.S. state, state in the Southeastern United States, Southeastern and Deep South regions of the United States. It borders Tennessee to the north, Alabama to the east, the Gulf of Mexico to the south, Louisiana to the s ...

Nebraska Nebraska ( ) is a landlocked U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders South Dakota to the north; Iowa to the east and Missouri to the southeast, both across the Missouri River; Ka ...

North Carolina North Carolina ( ) is a U.S. state, state in the Southeastern United States, Southeastern region of the United States. It is bordered by Virginia to the north, the Atlantic Ocean to the east, South Carolina to the south, Georgia (U.S. stat ...

Oklahoma Oklahoma ( ; Choctaw language, Choctaw: , ) is a landlocked U.S. state, state in the South Central United States, South Central region of the United States. It borders Texas to the south and west, Kansas to the north, Missouri to the northea ...

South Carolina South Carolina ( ) is a U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders North Carolina to the north and northeast, the Atlantic Ocean to the southeast, and Georgia (U.S. state), Georg ...

Texas Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...

Wisconsin Wisconsin ( ) is a U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest of the United States. It borders Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michig ...

, and

Virginia Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...

—were not participating in the Medicaid expansion, with ten more—

Kansas Kansas ( ) is a landlocked U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Nebraska to the north; Missouri to the east; Oklahoma to the south; and Colorado to the west. Kansas is named a ...

Maine Maine ( ) is a U.S. state, state in the New England region of the United States, and the northeasternmost state in the Contiguous United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Provinces and ...

Michigan Michigan ( ) is a peninsular U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest, Upper Midwestern United States. It shares water and land boundaries with Minnesota to the northwest, Wisconsin to the west, ...

Montana Montana ( ) is a landlocked U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Idaho to the west, North Dakota to the east, South Dakota to the southeast, Wyoming to the south, an ...

Missouri Missouri (''see #Etymology and pronunciation, pronunciation'') is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. Ranking List of U.S. states and territories by area, 21st in land area, it border ...

Ohio Ohio ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Erie to the north, Pennsylvania to the east, West Virginia to the southeast, Kentucky to the southwest, Indiana to the ...

Pennsylvania Pennsylvania, officially the Commonwealth of Pennsylvania, is a U.S. state, state spanning the Mid-Atlantic (United States), Mid-Atlantic, Northeastern United States, Northeastern, Appalachian, and Great Lakes region, Great Lakes regions o ...

South Dakota South Dakota (; Sioux language, Sioux: , ) is a U.S. state, state in the West North Central states, North Central region of the United States. It is also part of the Great Plains. South Dakota is named after the Dakota people, Dakota Sioux ...

Utah Utah is a landlocked state in the Mountain states, Mountain West subregion of the Western United States. It is one of the Four Corners states, sharing a border with Arizona, Colorado, and New Mexico. It also borders Wyoming to the northea ...

, and

Wyoming Wyoming ( ) is a landlocked U.S. state, state in the Mountain states, Mountain West subregion of the Western United States, Western United States. It borders Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho t ...

—leaning towards not participating. * The Patient Protection and Affordable Care Act eliminates lifetime and annual limits from plans in the individual health benefits exchanges. This effectively eliminates the ceiling on

financial risk Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financi ...

for individuals in the individual exchanges.

Subsidies

The subsidies for insurance premiums are given to individuals who buy a plan from an exchange and have a household income between 133% and 400% of the poverty line. Section 1401(36B) of PPACA explains that each subsidy will be provided as an advanceable, refundable tax credit s:Patient Protection and Affordable Care Act/Title I/Subtitle E/Part I/Subpart A and gives a formula for its calculation: Patient Protection and Affordable Care Act: Title I: Subtitle E: Part I: Subpart A: Premium Calculation A refundable tax credit is a way to provide government benefits to individuals who may have no tax liability (such as the

earned income tax credit The United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depend ...

). The formula was changed in the amendments (HR 4872) passed March 23, 2010, in section 1001. To qualify for the subsidy, the beneficiaries cannot be eligible for other acceptable coverage. The U.S. Department of Health and Human Services (HHS) and

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...

(IRS) on May 23, 2012, issued joint final rules regarding implementation of the new state-based health insurance exchanges to cover how the exchanges will determine eligibility for uninsured individuals and employees of small businesses seeking to buy insurance on the exchanges, as well as how the exchanges will handle eligibility determinations for low-income individuals applying for newly expanded Medicaid benefits. Premium caps have been delayed for a year on group plans, to give employers time to arrange new accounting systems, but the caps are still planned to take effect on schedule for insurance plans on the exchanges; the HHS and the

Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a ...

calculated what the income-based premium caps for a "silver" healthcare plan for a family of four would be in 2014:

Guaranteed issue

In the individual market, sometimes thought of as the "residual market" of insurance, insurers have generally used a process called

underwriting Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability ...

to ensure that each individual paid for his or her actuarial value or to deny coverage altogether. The House Committee on Energy and Commerce found that, between 2007 and 2009, the four largest for-profit insurance companies refused insurance to 651,000 people for previous medical conditions, a number that increased significantly each year, with a 49% increase in that time period. The same memorandum said that 212,800 claims had been refused payment due to pre-existing conditions and that insurance firms had business plans to limit money paid based on these pre-existing conditions. These persons who might not have received insurance under previous industry practices are guaranteed insurance coverage under the ACA. Hence, the insurance exchanges will shift a greater amount of financial risk to the insurers, but will help to share the cost of that risk among a larger pool of insured individuals. The ACA's prohibition on denying coverage for pre-existing conditions began on January 1, 2014. Previously, several state and federal programs, including most recently the ACA, provided funds for state-run high-risk pools for those with previously existing conditions. Several states have continued their high-risk pools even after the first marketplace enrollment period.

Limit to price variation

:Pricing Factors Allowed in the exchange under the ACA: ::*Age: 3:1 ::*Smoking status: 1.5:1 Pricing variation will be allowed by area (within a state) and family composition ("tier") as well.

Comparable tiers of plans

Within the exchanges, insurance plans are offered in four tiers designated from lowest premium to highest premium: bronze, silver, gold, and platinum. The plans cover ranges from 60% to 90% of bills in increments of 10% for each plan. For those under 30 (and those with a hardship exemption), a fifth "catastrophic" tier is also available, with very high deductibles. Insurance companies select the doctors and hospitals that are "in-network". Proponents of health care reform believe that allowing comparable plans to compete for consumer business in one convenient location will drive prices down. Having a centralized location increases consumer knowledge of the market and allows for greater conformation to

perfect competition In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In Economic model, theoret ...

. Each of these plans will also cap liabilities for consumers with out-of-pocket expenses at $6,350 for individuals and $12,700 for families.

2015

A study by Avalere Health says that healthcare

insurance premium Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...

s of popular plans available under

Obamacare The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act (PPACA) and informally as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Presi ...

for 2015 rose by 3-4% . According to the US Department of Health & Human Service, as enrollment for the Health Insurance Marketplace began on November 15, about 11.4 million people have explored their options, learned about the financial assistance available, and signed up for or renewed a health plan that meets their needs and fits their budget. As of February, 2015, $268 was the average monthly tax credit for people who qualify for financial assistance in 37 states using HealthcCare.gov through January 30.

Economics of health insurance exchanges: the individual mandate

The health insurance advocacy group

America's Health Insurance Plans AHIP (formerly America's Health Insurance Plans) is an American political advocacy and trade association of health insurance companies that offer coverage through the employer-provided, Medicare Advantage, Medicaid managed care, and individual ma ...

was willing to accept these constraints on pricing, capping, and enrollment because of the individual mandate: The individual mandate requires that all individuals purchase health insurance. This requirement of the ACA allows insurers to spread the financial risk of newly insured people with pre-existing conditions among a larger pool of individuals. Additionally, a study done by Pauly and Herring estimates that individuals with pre-existing conditions in the 99th percentile of financial risk represented 3.95 times the average risk (mean). Figures from the House Committee on Energy and Commerce would indicate that approximately 1 million high-risk individuals will pursue insurance in the health benefits exchanges. Congress has estimated that 22 million people will be newly insured in the health benefits exchanges. Thus the high-risk individuals do not number in high enough quantities to increase the net risk per person from previous practice. It is thus theoretically profitable to accept the individual mandate in exchange for the requirements presented in the ACA.

Acronym

HIX (Health Insurance eXchange) is emerging as the ''de facto'' acronym across state and federal government stakeholders, and the private sector technology and service providers that are helping states build their exchanges. The acronym HIX differentiates this topic from

health information exchange Health Information Exchange (HIE) is the electronic exchange of health care information across organizations within a region, community, or hospital system. Participants in this data exchange are collectively called Health Information Networks (HI ...

, or HIE. The de facto acronym of HIX will be replaced with HIEx in the ''3rd Edition of the HIMSS Dictionary of Healthcare Information Technology Terms, Acronyms and Organizations'',

Criticism and controversy

; Exclusion of many lower-income individuals : NPR reported that large numbers of low income people were excluded in states that did not offer

expansion to 133% of the poverty line. ; Data security : Minnesota's healthcare exchange was reported to have accidentally e-mailed personal information of more than 2,400 insurance agents to an insurance broker, according to the

Minnesota Star Tribune ''The Minnesota Star Tribune'', formerly the ''Minneapolis Star Tribune'', is an American daily newspaper based in Minneapolis, Minnesota. As of 2023, it is Minnesota's largest newspaper and the seventh-largest in the United States by circula ...

. ; Loss of group coverage for part-time employees : According to NPR, some employers such as

Trader Joe's Trader Joe's is an American grocery store chain headquartered in Monrovia, California, with 597 locations across the US. The first Trader Joe's store was opened in 1967 by founder Joe Coulombe in Pasadena, California. In 1979, the chain was s ...

and

Home Depot The Home Depot, Inc., often referred to as Home Depot, is an American multinational corporation, multinational home improvement retail corporation that sells tools, construction products, appliances, and services, including fuel and transportat ...

have decided to terminate health insurance for their part-time workers. ; Scams : Scams were expected because of confusion over enrollment. ; Restricted and narrow networks : Some exchanges have been criticized for offering health plans that necessitate too many out-of-network claims. On October 5, 2013, Seattle Children's hospital filed a lawsuit for "failure to ensure adequate network coverage" when only two insurers included Children's in their marketplace plan. : Concerns have also been raised about insurance carriers' efforts to limit the number of providers in their networks to reduce costs. A study of the California marketplace confirmed these concerns, but also showed that geographic access was similar and quality at times superior in marketplace-based plans. ; "Cherry-picking" : The private health insurance industry fears that restricted eligibility and a market size that is too small could result in higher premiums, encourage "

cherry-picking Cherry picking, suppressing evidence, or the fallacy of incomplete evidence is the act of pointing to individual cases or data that seem to confirm a particular position while ignoring a significant portion of related and similar cases or data th ...

" of customers by insurers, and force a clearance of the exchange. That is what some believe will happen in

and

California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...

in their failed exchanges. One of these factors, "cherry-picking" of customers, will not be possible in the state-run exchanges mandated by the ACA, because all insurance plans will be " guaranteed issue" in 2014. Furthermore, the law will bring millions of new enrollees into the marketplace by way of the individual mandate requirement for all citizens to purchase health insurance and increase market size.

State-Based Marketplaces

A State-based Marketplace (SBM) is a state-specific online marketplace where American citizens and legal residents can comparison shop, apply, and enroll in subsidized health insurance plans via a government agency. Similar to Healthcare.gov, but created and maintained by the individual state. Sometimes referred to as a State-based Exchange (SBE), State-based marketplaces strive to limit consumer confusion by standardizing information on plan benefits and making it easier to compare insurance policy cost and quality. States that have opted to implement a State-based Marketplace are required to offer numerous forms of aid to consumers searching for coverage, such as toll-free hotlines to help consumers with plan selection, assistance in determining eligibility for federal subsidies or

, and conducting outreach to educate consumers on available coverage options in their state.

States with State-based Marketplaces

State-based Marketplaces have developed as technology matures and the market and individual state needs have changed. Numerous states have opted to implement their own SBM. This includes: * California – Covered California * Colorado – Connect for Health Colorado * Connecticut – Access Health CT * District of Columbia – DC Health Link * Idaho – Your Health Idaho * Kentucky - kynect * Maryland – Maryland Health Connection * Massachusetts – Health Connector * Minnesota – MNsure * Nevada - Nevada Health Link * New Jersey – Get Covered NJ * New York – New York State of Health * Pennsylvania – Pennie(tm) * Rhode Island – HealthSource RI * Vermont – Vermont Health Connect * Washington – Washington Healthplanfinder

Cover Oregon website failure

In March 2015, Oregon officially abolished its state-run health insurance marketplace, " Cover Oregon", in favor of a federally-run exchange.

Private health insurance exchanges

A private health insurance exchange is an exchange run by a

private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

company or

nonprofit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...

. Health plans and insurance carriers in a private exchange must meet certain criteria defined by the exchange management. Private exchanges combine technology and human advocacy, and include online eligibility verification and mechanisms for allowing employers who connect their employees or retirees with exchanges to offer

. They are designed to help consumers find plans personalized to their specific health conditions, preferred doctor/ hospital networks, and budget. These exchanges are sometimes called marketplaces or intermediaries, and work directly with insurance carriers, effectively acting as extensions of the carrier. The largest and most successful private health care exchange is CaliforniaChoice, established by CHOICE Administrators in 1996. Private health exchanges predate the Affordable Care Act. One example of an early health care exchange is International Medical Exchange (IMX), a company venture financed in

Louisville, Kentucky Louisville is the List of cities in Kentucky, most populous city in the Commonwealth of Kentucky, sixth-most populous city in the Southeastern United States, Southeast, and the list of United States cities by population, 27th-most-populous city ...

, by

Standard Telephones and Cables Standard Telephones and Cables Ltd (later STC public limited company, plc) was a British manufacturer of telephone, telegraph, radio, telecommunications, and related equipment. During its history, STC invented and developed several groundbreakin ...

, a large British technology company (now

Nortel Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian Multinational corporation, multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario. It was founded in ...

), to develop the exchange concept in the U.S. using on-line technology. The product was created in the mid-1980s. IMX developed an eligibility verification system, a claims management system, and a bank-based payments administration system that would manage payments between the patient, the employer, and the insurance carrier. Like proposed exchanges today, it focused on standards of care, utilization review by a third party, private insurer participation, and cost reduction for the health care system through product simplification. The focus was on creating local or regional exchanges that offered a series of standardized health care plans that reduced the complexity and cost of acquiring or understanding health care insurance, while simplifying claims administration. The system was modeled after the standardized stock exchange and banking industry

back office A back office in most corporations is where work that supports '' front office'' work is done. The front office is the "face" of the company and is all the resources of the company that are used to make sales and interact with customers and clien ...

processes. The major difference was that IMX health care exchanges would provide their products through a national network of existing commercial banks rather than setting up a duplicate payment and administration systems network as proposed today. The IMX product rights were acquired by

Anthem An anthem is a musical composition of celebration, usually used as a symbol for a distinct group, particularly the national anthems of countries. Originally, and in music theory and religious contexts, it also refers more particularly to sho ...

(then Blue Cross and Blue Shield of Kentucky). The exchange product became the basis for inter-carrier claims settlement between commercial insurance carriers and Blue Cross organizations. The founders of IMX were from top management at

Humana Humana Inc. is an American for-profit health insurance company based in Louisville, Kentucky. In 2024, the company ranked 92 on the Fortune 500 list, which made it the highest ranked (by revenues) company based in Kentucky. It is the fourth l ...

, and top management of First Tennessee National Corp (now First Horizon). In overlapping markets, the co-existence of public and private exchange plans can lead to confusion when speaking of an "exchange plan." In California, Anthem Blue Cross offers HMO plans through both the state-run Covered California exchange and the private CaliforniaChoice exchange, but doctor networks are not identical. Physicians advertising acceptance of Anthem Blue Cross Exchange HMOs may misinform individuals enrolled in Anthem Blue Cross Exchange HMOs through the private exchange.

References

External links

HealthCare.gov

Insurer marketplace participation by county
(Yearly recent and historic maps)
Status of Federal Funding for State Implementation of Health Insurance Exchanges

(2014)
C-SPAN Video Library

Search Health Insurance Exchange
: ''See "Clips" tab then "Clips Timeline" drop-down for abstracts of edited clips from the following videos:'' :
Health Care Law Exchanges
Apr 22, 2013, Jenny Gold, Kaiser Health News correspondent, Interview :
Report Video Issue Health Insurance Exchanges
Jul 25, 2013, Politico Pro Health Care Breakfast Briefing :
Update on the Health Care Law
Jul 1, 2013
Julie Rovner

National Public Radio National Public Radio (NPR) is an American public broadcasting organization headquartered in Washington, D.C., with its NPR West headquarters in Culver City, California. It serves as a national Radio syndication, syndicator to a network of more ...

health policy correspondent, Interview
Overview of Health Insurance Exchanges
Congressional Research Service, July 1, 2016 {{PPACA , state=expanded Healthcare reform in the United States CGI Group Health insurance Universal health care Health education Public health