What is a health insurance exchange?

A health insurance exchange serves as a platform designed specifically for individuals and businesses to compare, buy, and manage health insurance plans. These exchanges facilitate a marketplace where various insurance providers offer their policies, making it easier for consumers to find coverage that fits their needs and budgets. The intention behind health insurance exchanges is to increase competition among insurers, improve access to affordable health insurance, and help individuals make informed decisions.

Unlike regulatory bodies, which focus on overseeing the operations and compliance of health insurance companies, or health insurance policies that describe the specifics of coverage provided, a health insurance exchange is primarily about fostering a competitive environment for consumers to explore their options. Additionally, while there are government programs aimed at providing health insurance to low-income individuals—such as Medicaid and the Children's Health Insurance Program (CHIP)—these programs are separate entities from health insurance exchanges and do not serve the primary function of facilitating the purchase of coverage across a variety of private plans.