One of the biggest healthcare buzzwords of the decade is "Health Insurance Exchanges". Public and private health exchanges are very similar - but there are also key differences. Here's what you need to know about public vs private exchanges.
Understanding Health Insurance Exchanges
At a basic level, a health insurance exchange is a store or shop specializing in health insurance merchandise. Today's health insurance exchanges typically include the following components:
A choice of two or more health insurance options
Advice and recommendation on what health insurance options best fit your needs
Automated billing for the chosen health insurance plan premium(s)
On-going support for the chosen health insurance plan(s)
Public vs Private Exchanges
The difference between public and private exchanges is pretty straightforward:
A private health insurance exchange is a health insurance exchange run by a private company.
A public health insurance exchange is a health insurance exchange run by a government (or government-contracted) entity.
Since the ACA required states to create a health insurance exchange by 2014, those exchanges (aka the Health Insurance Marketplaces) are considered public health insurance exchanges.
Numerous entities ranging from start-ups to new divisions of leading insurance companies have been created to offer new private health exchanges. In fact, if you're a health insurance broker you probably already offer a Private Health Insurance Exchange (see: How to Offer a Private Health Insurance Exchange in 3 Steps).
Other Exchange Differences
In addition to being public or private, there are other differences with health insurance exchanges.
Is the health insurance exchange Individual Market Based or Group Market Based?
Who is eligible to participate in the health insurance exchange?
What products are available in the health insurance exchange?
What is unique about the health insurance exchange?
Read more: 5 Minute Guide to Health Insurance Exchanges.
Questions about public vs private exchanges? Leave a comment.