Senate Finance Committee's Backgrounder on Insurance Exchanges

The America’s Healthy Future Act
Insurance Exchanges: Making Shopping for Coverage Easier and More Affordable

Shopping for health insurance on your own is not only expensive, it can often be difficult and confusing. To make shopping for health insurance easier and more affordable, the Chairman’s Mark creates state-based web portals called “insurance exchanges” where American families, individuals and small businesses can shop for health insurance plans within their zip codes and determine their eligibility for tax credits to buy health insurance.

• Shopping in the Exchange. An exchange is an online one-stop shop where consumers can quickly and easily view, compare and purchase health insurance plans.
• People will be able to shop for coverage in an exchange online or at designated locations in their communities such as a post office, and there will be call centers to offer support.
• There will be one standard enrollment form for all plans in an exchange. And every plan will be presented in a standard format with transparent pricing rules, making them simple to understand and easy to compare. This will force insurance companies to compete on price and quality rather than their ability to select the healthiest individuals or hide benefit restrictions.
• In an exchange, information about premium costs, out-of-pocket costs and covered benefits will be clear and transparent so consumers understand the coverage they are buying.
• Quality and Stability. All insurance companies that participate in an exchange will be required to offer standard benefits packages that provide meaningful coverage. And Americans will be able to keep the insurance they purchase through an exchange no matter where they work, so they will not be forced to worry about losing coverage if they change or lose their job.
• Affordable Coverage. The exchange will be able to offer health insurance plans at lower rates by pooling individuals and small businesses into larger groups, much like large employers do today. In addition, by presenting more information about competing plans in a single marketplace that will allow head-to-head comparisons, the exchange will lead to lower premium costs. Finally, the Chairman’s Mark will provide tax credits and limit out-of-pocket costs for small businesses and Americans who need extra help when they purchase insurance through an exchange.