What is a Health Insurance Exchange?
An health insurance exchange is a one-stop, online shop where consumers can compare options from private insurers on an apples-to-apples basis. In short, an exchange is a way to bring competition, transparency, and easy access to the health insurance market.
While exchanges have existed for years in states like Utah and Massachusetts, the federal health care reform law requires that consumers in every state have access to an affordable insurance exchange that meets minimum requirements. Each state can choose to apply for grant money from the federal government to study and build their exchanges, or defer to the federal government to build the state's exchange.
What does a Health Insurance Exchange do?
In a big, rural state like Montana, it can be difficult for families and small businesses to find and compare health insurance options. An affordable insurance exchange will give insurance companies a level playing field to compete for business anywhere in the state, giving all Montanans more options to compare when shopping for health insurance.
Where does Montana stand in the Exchange-building Process?
As Montana's chief insurance regulator, the Montana Commissioner of Securities and Insurance convened an advisory council made of patient advocates, insurance experts, medical providers, and state legislators to prepare legislation Montana would need to build a state-based affordable insurance exchange. In the months before Montana's 2011 legislative session, this stakeholder advisory council met several times and produced draft legislation for the Commissioner to present to the legislature.
Though the draft legislation had bipartisan support and nearly unanimous backing in public testimony, the bill stalled in committee and never came to an up-or-down vote on the floor of the Montana House or Senate.
Without legislative authority, Montana can not build a state-based affordable insurance exchange. As a result, the federal government will be responsible for building an exchange for Montana that is operational by January 1, 2014.