Health insurance marketplace
In the United States, health insurance marketplaces,[1] also called health exchanges, are organizations in each state through which people can purchase health insurance. People can purchase health insurance that complies with the Patient Protection and Affordable Care Act (ACA, known colloquially as "Obamacare") at ACA health exchanges, where they can choose from a range of government-regulated and standardized health care plans offered by the insurers participating in the exchange.
ACA health exchanges were fully certified and operational by January 1, 2014, under federal law.[2] Enrollment in the marketplaces started on October 1, 2013, and continued for six months. As of April 19, 2014, 8.02 million people had signed up through the health insurance marketplaces. An additional 4.8 million joined Medicaid.[3] Enrollment for 2015 began on November 15, 2014 and ended on December 15, 2014.[4] As of April 14, 2020, 11.41 million people had signed up through the health insurance marketplaces.[5]
Private non-ACA health care exchanges also exist in many states, responsible for enrolling 3 million people.[6] These exchanges predate the Affordable Care Act and facilitate insurance plans for employees of small and medium size businesses.
Background[edit]
Health insurance exchanges in the United States expand insurance coverage while allowing insurers to compete in cost-efficient ways and help them to comply with consumer protection laws. Exchanges are not themselves insurers, so they do not bear risk themselves, but they do determine which insurance companies participate in the exchange. An ideal exchange promotes insurance transparency and accountability, facilitates increased enrollment and delivery of subsidies, and helps spread risk to ensure that the costs associated with expensive medical treatments are shared more broadly across large groups of people, rather than spread across just a few beneficiaries. Health insurance exchanges use electronic data interchange (EDI) to transmit required information between the exchanges and carriers (trading partners), in particular the 834 transaction for enrollment information and the 820 transaction for premium payment.[7]
Economics of health insurance exchanges: the individual mandate[edit]
The health insurance advocacy group America's Health Insurance Plans was willing to accept these constraints on pricing, capping, and enrollment because of the individual mandate: The individual mandate requires that all individuals purchase health insurance.[73][74] This requirement of the ACA allows insurers to spread the financial risk of newly insured people with pre-existing conditions among a larger pool of individuals.
Additionally, a study done by Pauly and Herring estimates that individuals with pre-existing conditions in the 99th percentile of financial risk represented 3.95 times the average risk (mean).[63] Figures from the House Committee on Energy and Commerce would indicate that approximately 1 million high-risk individuals will pursue insurance in the health benefits exchanges.[64] Congress has estimated that 22 million people will be newly insured in the health benefits exchanges.[75] Thus the high-risk individuals do not number in high enough quantities to increase the net risk per person from previous practice. It is thus theoretically profitable to accept the individual mandate in exchange for the requirements presented in the ACA.
Acronym[edit]
HIX (Health Insurance eXchange) is emerging as the de facto acronym across state and federal government stakeholders, and the private sector technology and service providers that are helping states build their exchanges. The acronym HIX differentiates this topic from health information exchange, or HIE.[76]
The de facto acronym of HIX[77] will be replaced with HIEx in the 3rd Edition of the HIMSS Dictionary of Healthcare Information Technology Terms, Acronyms and Organizations, to be released in March 2013.