Health Insurance Exchanges
The heart of Obamacare has been the array of online shopping centers it created, dubbed Health Benefit Exchanges by the 2010 Affordable Care Act, where people who don’t get insurance through their employers or the government can go to buy coverage. The big question about the exchanges used to be whether they could attract enough younger and healthier consumers to offset the cost to insurers of older or sicker enrollees. Now that a Republican Congress and a Republican president-elect, Donald Trump, are setting to work to repeal Obamacare, the big question is what a Republican version of the exchanges might look like — and whether they'd be able to weather a potentially bumpy transition.
As the new Congressional session began, Republicans put in motion pursuing a plan to repeal Obamacare but delay its actual dismantling by up to four years while they worked on a replacement. Democrats warned that such an approach could lead to a collapse of the exchanges if insurers decided they didn't want to invest money in their uncertain future. The Obama administration pointed to the 8.8 million people who signed up for coverage in 2017 through the federal exchange, 200,000 more than last year, as proof that the exchanges were rebounding from earlier troubles. During the campaign, Trump and other Republicans had pointed to news that several big insurers were pulling out of many exchanges and that millions of consumers would face sharp price increases as proof that Obamacare was failing. Aetna, UnitedHealth Group and Humana said they were tired of recording big losses on exchange plans, and didn’t see the market stabilizing soon. The cost of insurance also climbed for people in the individual-policy market: Insurers will be boosting their premium rates by about 22 percent. But roughly three-quarters of current enrollees will still be able to find ACA plans for less than $100 a month, once subsidies are taken into account. The enrollment period runs through Jan. 31.
The idea of providing universal health-coverage via competing private insurers dates back, in academia, to at least the 1970s. It’s an American-style departure from the way most other countries provide all their citizens with coverage: some sort of government plan. “Managed competition,” as it was dubbed by the economist Alain Enthoven, made its way into politics in the early 1990s as part of President Bill Clinton’s universal health-care plan, written in large part by Hillary Clinton, who later became the Democratic nominee defeated by Trump. The effort ultimately failed, but the idea lived on. In 2006, when Massachusetts launched its universal health-care plan under then-governor Mitt Romney, exchanges were at the heart of it. The exchange model became Obamacare's solution to building health-care reform on top of the existing system, without disrupting the employer health plans that provide many Americans with coverage.
Democrats in Congress say they will resist a repeal, and say the problems with the exchanges could be fixed if Republicans weren't determined to do away with the law altogether. During the campaign, Trump was vague on how he would replace Obamacare and what he might do about the exchanges. He said he would replace the ACA's subsidies by allowing people to fully deduct their insurance premiums from their taxes. And he wants to allow insurance to be sold across state lines, something he said would increase competition and improve coverage. House Speaker Paul Ryan, also a Republican, has laid out an outline of a replacement plan that contains similar elements and calls for some version of exchanges to continue. An analysis by the Commonwealth Fund, a nonprofit foundation, found that repealing the ACA could result in about 20 million people losing coverage while adding $33 billion a year to the federal deficit, findings Republicans have disputed.
The Reference Shelf
- Read the Affordable Care Act here. The section on exchanges begins on page 55.
- A compilation of new health law regulations published by the Health and Human Services Department.
- A book by the former Obama adviser David Blumenthal covers the contentious history of health reform in “The Heart of Power.”
- The October 2016 report by the Department of Health and Human Services on plans available through exchanges for 2017.
First published Oct. 1, 2013
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