DEFINITION: A health insurance exchange – also known as a health insurance marketplace – is a key provision of the Affordable Care Act, established to provide a selection of competing providers, each offering different qualified plans. All qualified plans must meet standards set by the ACA.
Competition between the plan providers will, in theory, encourage the providers to improve the quality and pricing of offered plans. For practical purposes, the exchange will be an online portal where consumers can shop for health insurance. For people who qualify for premium subsidies or cost-sharing subsidies, the exchanges will be the only place that the subsidies can be obtained.