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What Are Health Insurance Marketplaces (formerly called Exchanges)?

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Updated October 19, 2013

Question: What Are Health Insurance Marketplaces (formerly called Exchanges)?

The healthcare reform law of 2010 includes provisions for health insurance exchanges beginning in 2014. In early 2013, they changed their name to "Health Insurance Marketplaces. What is a health insurance marketplace and how will it benefit patients?

Answer:

The United States has an employer-based healthcare payment system in place that many people feel is a good basis for payment.

The problem is that millions of Americans are either employed by companies that do not offer health insurance benefits (perhaps the company is too small), or they may be self-employed, or they may, for some other reason, not have easy access to affordable healthcare insurance coverage.

A health insurance marketplace may be the solution.

The concept of health insurance marketplaces / exchanges came about through the Affordable Care Act (healthcare reform) passed in the United States in 2010. They are intended to be a marketplace where competitive insurance companies will offer their health plans to those who need them within any given state.

Many health insurance marketplaces will be sponsored by state governments, although some may be offered by non-profit groups or even the federal government (if any given state does not set one up.) Because these groups are so large, insurers want to work with them to insure their members, so they keep their pricing lower in order to compete.

Read more about Health Insurance Marketplaces from the Healthcare.gov website.

Find out if your state will establish a Health Insurance Marketplace.

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