Imagine if buying health insurance was kind of like reserving a hotel room.
You log on to a website and answer questions about your age, the number of people in your family, your address.
You answer more questions about your income, whether you want to keep your doctor, your preferred deductible amount, and whether you want to pay a percentage of your health costs out-of-pocket for some more expensive services.
A list of insurers and plans appears, with standardized descriptions of prices and benefits. All you have to do is choose one and sign up.
That's how a health benefits exchange works. Under the national health law, starting this time next year, people with moderate to low incomes will be able to purchase individual plans this way for coverage that begins in 2014. Exchanges also are being set up for small businesses.
It's not just about online shopping. The exchange for individual plans:
* Allows people who meet income guidelines and don't have access to other affordable coverage to pay lower premiums and out-of-- pocket costs through tax credits and other government assistance.
* Requires plans to make public disclosures that include finances, denied claims and enrollee rights, among other information.
* Rates each plan based on quality and price.
* Operates a toll-free phone assistance hotline and pays for a program to educate the public about the exchange.
"It gives people an opportunity to cut through the complexity of insurance and compare different plans, apples to apples and oranges to oranges, to make the choice that suits them best," said
The Patient Protection and Affordable Care Act calls for exchanges in every state. Though anyone can use them to shop for individual plans, they're geared toward uninsured people who earn too much to be eligible for
By 2019, about 24 million people will buy individual plans through an exchange, along with another 5 million employed by small businesses, according to estimates from the
States can elect to build their own exchanges, enter into a state- federal partnership exchange or default to one run by the federal government. They may transition to a different model after the exchanges start operating in 2014.
Consumers are unlikely to see much difference between an exchange run by the federal government versus one run by a state, said
What they might see are higher premiums.
In general, rules for the exchanges call for plans to cover more services than they have historically and for insurers to offer plans in which premiums pay for a larger share of health costs, said
"The cost is really a big potential concern for people," he said.