Health Insurance Exchange

By Aaron Rice
February 6, 2008

Health insurance is one of the largest expenses for businesses, government, and families. There are lots of reasons for that, most of which have to do with government actions that inhibit innovation and competition - two of the primary elements that lead to improved quality and lower price in other service sectors.

Governor Barbour has proposed an innovative method to address some of these barriers. It's called a Health Insurance Exchange, and it would allow employees of small businesses to obtain health insurance that best meets their needs, even if that plan differs from ones chosen by other employees at the same business. For small business owners, it reduces the headaches of dealing with health insurance companies, and it allows them to decide exactly how much they will spend on insurance for their employees.

From a consumer's perspective, the concept is similar to internet travel sites, which offer a single market where consumers can choose from a variety of airlines or hotels to find the price, schedule, and amenities they need. In a similar way, a health insurance exchange would allow consumers to choose from a variety of insurance companies and plans to pick the one that best meets their needs - almost always at a lower price. They would also receive the tax benefits that are currently unavailable for individuals who purchase their insurance on their own and not through an employer. Further, they would keep that policy, even if they changed jobs.

People choose all other types of insurance based on their unique needs. Health insurance should be no different.

To learn more, go to


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