So, What Exactly Is a Health Insurance Exchange Anyway???

So, What Exactly Is a Health Insurance Exchange Anyway???

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I’m a health care expert who follows health reform closely, so when I’m confused about something I know most people are.

When Massachusetts passed the universal coverage law in 2006 I didn’t understand exactly what the Connector was supposed to do. If they had called it a health insurance store or marketplace or comparison site I would have grasped the concept better. Once it’s explained it’s obvious, but why use the word “connector” in the first place?

The federal Affordable Care Act makes matters even worse. It calls these things health insurance “exchanges.”

That word has the wrong connotations. When I hear the word “exchange” I think of a stock exchange. That’s not somewhere I go to buy or compare products or services to use. Others think of “exchange” as what they do when they made a purchase that was the wrong size or received a gift they didn’t like.

Even for health wonks that fully grasp the concept, the word “exchange” is confusing, because the term is also used in the context of health information exchanges, which are used to exchange clinical data. I often hear people asking about the impact of the “exchange” –without specifying “insurance exchange” or “information exchange,” and I have to ask them which they mean.

There’s a simple solution to this: let’s dump the word “exchange” and use a term that’s more understandable and appropriate. How about:

  • Store
  • Marketplace
  • Comparison site
  • Supermarket

David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma, biotech, and medical devices. Formerly with BCG and LEK. He writes regularly at Health Business Blog, where this post first appeared.

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24 Comments on "So, What Exactly Is a Health Insurance Exchange Anyway???"


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Guest
Nov 13, 2013

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Guest
Sep 22, 2013

In a sense, I do agree that word “exchange” has to be dumped. It never was the perfect word for this imperfect bill.

I guess like everything else, “we will see.” Here in Michigan, many are still uninformed. Maybe this goes back to the original question, as would this have been easier with more awareness?

I do agree with a poster above though, I work in the industry and I am a little weary about giving all my information to a person they dragged off the street to be a navigator.

Guest
Jul 20, 2013

{If family of two have health insurance, and one of them decide to use it for couple medical procedures will insurance policy premium go up?

Please advice.

Thanks.

Guest
May 28, 2013

Well dealing with a health care insurance is quite tough now days for any individual; therefore in order to get better health insurance program we used to take beneficial lessons from different health insurance programs along with health care programs such as Affordable Healthcare Act where health insurance exchange programs are consists of more value. So to understand the current features of health care programs we used through this above article. Really we get some beneficial health care term from here.

Guest
Mar 21, 2013

What is important is that does consumer know these new options available to them and can government effectively advertise insurance exchanges and its beneffits to low income people. California Exchange seems to be doing a better job in defining, spending money and creating new jobs to educate its populations by having exchange navigator and assisters program.

You can earn $58 per new applicant enrollment to covered california health exchange.

Guest
Aurthur
Mar 22, 2013

I can’t wait to turn over all my financial records and ssn to a navigator/assister that probably has no training, licensing, or criminal background check to determine if they have been convicted of any felonies like identity theft or insurance fraud. I will be even happier when the navigator determines I do not qualify for any subsidy, but I can purchase a $2,000 deductible for $850 a month, but only when the next open enrollment rolls around.

Jim, have you signed up to be a navigator or do you have to wait until you are actually out of prison for that pesky, Acorn fraud conviction?

Guest
Mar 23, 2013

Hey Aurthur,

I know you probably have been duped by someone when they called you saying that they are from IRS and want your SSN to verify that you do not owe any back taxes and you readly gave them your SSN without even verifying that its an actual IRS agent. I know fear of hiding taxes on your return made you freeze and give away SSN right away :-)

Anyway for your information, there will be fingerprinting and background check done for every person who wants to become assister, Moreover its not free and one has to pay to for background check. you can read more here http://www.healthexchange.ca.gov/StakeHolders/Documents/Assisters%20Webinar%20FINAL02072013.pdf

I wish you not to get duped again.

Guest
Mar 14, 2013

Regardless of whether it is called insurance exchange, marketplace or other the government will still be able to get out the information to the public by whatever the site name is going to be, the same as it did with pcip. There is going to be little confusion when the media is going to be pimping the words insurance exchange within an insurance marketplace.
I wound up investing in a state insurance exchange dot com domain name through http://healthinsurancedomainnames.com back in 2010 and I think it really just ads immense credibility rather than averagejoehealthinsurance.com.
Regardless there are an immense amount of people that are going to be looking for entry and I think separating myself a bit will be a great investment in the end. Again though, people will simply continue to search as they ever have before which is health insurance. With so many people looking, its not going to be hard to conduct business regardless of the name exchange or marketplace.

Guest
Brian
Jan 22, 2013

Okay, so now I can call the Exchange a Store, a Marketplace, a Comparison site, and a Supermarket. Problem is, I still don’t know what the hell it is and how it’s supposed to be better for me than simply going to my doctor and paying him before I leave the office.

Guest
Jan 22, 2013

Don’t have to buy a CABG px.

Guest
Jan 22, 2013

This is a very tough subject to get involved in.

Guest
Jan 22, 2013

No ‘exchange’ is the perfect word for it, you are just looking at the wrong fun house mirror for an appropriate example of definition and function. It is not like the NYSE – it is more the Chicago Green Energy Exchange for Cap and Trade. No new value to the market place, no transparency of the transfer of funds, no determinant underwriting, and an architecture built upon fines, regulations, leavied seizures without solving delivery or the status quo. That should get you into the neighborhood – at least close enough to smell the stink of this thing for what it is.

Guest
Peter1
Jan 22, 2013

“The federal Affordable Care Act makes matters even worse. It calls these things health insurance “exchanges.””

On “HealthCare.gov” it’s actually called a “Health Insurance Marketplace”. Of course a true marketplace assumes a large pool of buyers and sellers acting independently where there is no mandate for buyers to participate.

When you change the name of a pig, is it still a pig?

Guest
Cynthia
Jan 22, 2013

Gee, if this law is supposed to be the panacea for all that is wrong with the country’s health care, why is ‘rebranding’ necessary? Couldn’t be because the entire program is a sham, lie, and disaster.

Which is why it should be rebranded as DOA. If it truly were a panacea, rebrand it as PUBLIC OPTION and really start the ball rolling in a national insurance pool option.

Guest
Roy Fouts
Jan 22, 2013

Lots of changes are needed Peter1, but with appropriate emphasis, the Affordable Care Act will be hailed as one of the most significant social acts ever implemented. As the current commercial says: “When pigs fly…” and with a little close analysis it is obvious that they they have been flying for quite some time and will soar even higher in the next few years.

Guest
Whatsen Williams
Jan 22, 2013

TANSTAAFL! Un intended consequences and outcomes will be common in this social experiment. “exchange” suggests buy and sell, like the NYSE for equities.

Guest
Peter1
Jan 22, 2013

The Exchanges will turn out to be the only place healthy people are forced to buy small pool, high risk, expensive insurance – unless of course you’re getting a government subsidy.