The Word:  Health Insurance Exchanges

Definition:  Health insurance exchanges (often referred to as “exchanges”) will be marketplaces where individuals and employers can purchase comprehensive health insurance.  Health insurance exchanges will be available in every state beginning January 1, 2014.

Used in a sentence:  “Aetna cut its rates by 5 percent for its small group plans on the D.C. exchange, the D.C. Health Benefit Exchange Authority said on Tuesday.” – Politico Pulse, Jason Millman, July 3, 2013.

Background:  The Affordable Care Act (ACA) created new health insurance exchanges.  Each state must decide whether to operate their own state-based exchange (where the state maintains control over the entire exchange), a federal-state partnership exchange (where the state and federal government work together to operate the exchange), or a federal exchange (where the state relies almost entirely on the federal government to operate the exchange).  Approximately one half of states have decided to operate their own state-based health insurance exchanges.  Here is a list of states and the status of state health insurance exchanges.  Individuals with limited incomes can apply for tax credits to help offset the costs of their premiums and/or cost-sharing requirements.

Health insurance plans that are operating in the health insurance exchanges must cover items and services with at least the following ten essential health benefit categories: prescription drug coverage , preventive care, emergency services and hospitalizations, maternity and newborn care, mental health and substance abuse services, ambulatory patient services, rehabilitation and habilitation services, laboratory services, preventive and wellness services and chronic disease management, and pediatric services (dental and vision).