When the next phase of the Affordable Care Act (ACA) kicks into gear January 1, 2014, each state will be required to offer its residents access to health care insurance through an online marketplace, often referred to as a “health insurance exchange.” These exchanges are now open for business today, Oct. 1, 2013, allowing individuals to sign up online, by phone or in-person, with health insurance coverage starting next year.
Until now, buying health insurance has been a daunting task for most individuals and small businesses. But purchasing health insurance through exchanges will more closely resemble booking a vacation on Expedia or Orbitz. People using this vehicle to enroll will see lots of options, common features among the offerings, and greater transparency around price, quality and consumer ratings.
Similar to the implementation of Medicare, we should expect program design and operational issues at the outset. We already have seen some technological glitches, which will need adjustments and mid-course corrections as these systems are rolled out in each state. But despite the initial bumps in the road, the exchanges will serve as a catalyst to alter the way health insurance is purchased. In the longer term, they will transform the entire health care system.
1. Exchanges will transform how individuals purchase health insurance
Buying health insurance on the individual market has been confusing. Individuals could search the Internet and shop from multiple carriers and insurance plans. However, with so much variation in plan design and coverage benefits, comparison shopping has been nearly impossible.
Date: October 1, 2013