Preparing for Health Reform

The Role of the Health Insurance Exchange

Regardless of the outcome of national health reform, a number of states are contemplating creating a health insurance exchange as a way to improve the individual and small group markets. A new report by the Robert Wood Johnson Foundation-funded State Coverage Initiatives (SCI) provides an overview of the potential role of a health insurance exchange, state-specific issues that should be considered before establishing an exchange, and the different ways in which an exchange might be structured and operated.

According to the report, Preparing for Health Reform: The Role of the Health Insurance Exchange, an exchange can organize the insurance market, provide a central source of information, enable comparability of benefit designs, administer public subsidies, facilitate the purchase of insurance through standardized enrollment processes and improve competition among carriers. However, the study author Robert Carey notes that policy-makers must be mindful of the particular market conditions that exist in their own state and engage a broad cross section of stakeholders—some with competing interests—in order to craft a program that improves the delivery of health insurance.

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