A key part of the health care debate is how to make health insurance more affordable. The Democratic plan contains a provision intended to cut costs, though it's received little attention. It's called an insurance exchange. NPR's Joe Neel explains how it would work.

JOE NEEL: An insurance exchange might look like another kind of exchange you already know.

(Soundbite of bell ringing)

NEEL: Okay, there wouldn't be an opening or closing bell.

(Soundbite of people yelling)

NEEL: And it would probably be a lot calmer than a stock exchange and more like, well, an insurance office.

(Soundbite of song, "The Girl from Ipanema")

NEEL: But as President Obama is saying, if you already have insurance and you like it, you can keep it. But if you don't like what you have now or you don't have insurance at all, you could go to this exchange, which might be in an office or it might be all online.

You would have a bunch of health insurance policies to choose from there - from the biggest names in the business to smaller companies, too. In theory, at least, all of the companies would be knocking themselves out to give you the most for your money at the lowest price.

The lowest premiums - especially in the beginning - would be from the government, the now-famous public plan. Because it wouldn't have to make a profit or do all the marketing that private plans now do, it would likely be the cheapest around. And that, Democrats dearly hope, would cause competitors to shape up, trim costs and drop their premiums so that your health care costs would start to go down.

And insurance exchange would work like a stock exchange in this way: There would be a central clearing house for all claims and premium transactions would be settled up. If it works, that alone could save a boatload of money by streamlining the paperwork.

Companies selling on the exchange would be required to cover you if you have a preexisting condition. You could even keep the policy when you change jobs or move. People who can't afford insurance, but make too much money for programs like Medicaid, would get subsidies, which would be paid directly to the exchange. Small businesses could buy group coverage here, too, and get help if they needed.

Now all of this is what the proponents are promising. Here's where the rubs come in. Some proposals are for state exchanges, not national, so you wouldn't be able to keep your policy if you move out of the state. Or if too few individuals and small businesses are allowed to shop at the exchange, the whole thing might not work because there's not enough volume to create competition.

And another thing: If it turns out that too many people only sign up when they get sick or sign up for a few months at a time and then drop their policy, companies won't be able to break even. And in that case, the exchange won't save anyone any money at all.

Joe Neel, NPR News.


Some people without insurance are finding creative ways to pay for doctors' visits today. The Associated Press reports that the number of people bartering for medical treatment has risen. As the economy went down, a bartering network called ITEX saw its health care business go up. It climbed almost 50 percent over last year.

One New Jersey resident without insurance used Craig's List to work out a deal, trading his Web design skills for some dental work. And then there is the Barter Clinic in Floyd, Virginia. They provided medical services in exchange for childcare, violin lessons and firewood.

(Soundbite of song, "The Girl from Ipanema")

INSKEEP: This is NPR News.

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.



Please keep your community civil. All comments must follow the Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.