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Louis Jacobson
By Louis Jacobson January 3, 2017

Marketplace today is similar to original vision, but not identical

During the 2008 presidential campaign, Barack Obama promised to create a "National Health Insurance Exchange to help Americans and businesses purchase private health insurance."

A lot has changed since the last time we looked at this promise in March 2010. At that point -- shortly after passage of the Affordable Care Act -- we rated this a Compromise "because the law includes the state-based exchanges, not one national exchange." And much of what has happened since has even further complicated our challenge in rating this promise.

For starters, efforts by many Republican-led states to undercut the law had the ironic effect of turning the marketplace system into something more like what Obama had envisioned in his promise.

Despite talk of instituting a national exchange when the bill was being debated in 2009 and 2010, state officials won the argument, and the bill established a collection of state-based marketplaces. States argued that they were in the best position to implement the exchanges since because health insurance regulation occurred to a large degree on the state level.

However, many states -- primarily states with Republican leaders who opposed the law -- opted not to create their own exchanges. By default, residents in these states were left to sign up for ACA-affiliated coverage through the national platform, Other states, including heavily Democratic states such as Oregon, also ended up relying more heavily than expected on the federal platform due to cost concerns and technical difficulties faced while constructing their own websites. (The federal website was infamously hobbled by technical difficulties at first, but eventually came to be seen as more reliable than what some states were producing.)

The end result was that the marketplace was a lot more national in orientation than the law had originally envisioned. Ultimately, less than a quarter of the 50 states' marketplaces are purely state operated today -- the ones in California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, and Washington state, plus the District of Columbia, according to the Kaiser Family Foundation.

By contrast, a majority of the states have deferred to the federal website -- 28 in all -- while another 11 have a hybrid that has both federal and state aspects. "It's become sort of a federal exchange as an unintended default," said Gail Wilensky, who headed Medicare and Medicaid for President George H.W. Bush. So while the end result is not a single national exchange, it has become much more like one.

But while the debate over whether the marketplace should be federal or run by the states had, over the past six years, become ancient history, the issue may be poised to take on new significance. If the Trump administration works with Congress to repeal the law -- as it has said it plans to do -- then the marketplaces might have been easier to salvage following repeal if there had been a stronger state role. As it is, a marketplace that is heavily federal is more vulnerable to a dramatic policy change at the federal level.

Ultimately, the final version did not fit the original proposal, so we rate this a Compromise.

Our Sources

Kaiser Family Foundation, "State Health Insurance Marketplace Types, 2017," accessed Dec. 21, 2016

Email interview with Craig Palosky, director of communications at the Kaiser Family Foundation, Dec. 20, 2016

Email interview with Gail Wilensky, who headed Medicare and Medicaid for President George H.W. Bush, Dec. 15, 2016

Angie Drobnic Holan
By Angie Drobnic Holan March 24, 2010

Health care law creates state-based exchanges

President Barack Obama signed health care legislation into law on March 23, 2010. The law calls for the creation of state-based health insurance exchanges, which are virtual marketplaces where people can go to buy health insurance.

But during the campaign, Obama, promised to create one national exchange, a significant difference.

During the run-up to the final passage, experts weighed in on important differences between a single national exchange and 50 different state-based exchanges.Many Democrats and groups advocating health care reform favored a single national exchange, so that the federal government could enforce uniform standards, even in states with minimal regulation of insurers.

But state officials argued that they were in the best position to implement the exchanges, because most current health insurance regulation happens on the state level.

The issue of national versus state exchanges had several interesting pros and cons, said Elizabeth Carpenter, writing in a January 2010 report for the New American Foundation, a nonpartisan public policy institute.

"If we give too much power to the states, can late-adopters and outright opponents stand in the way of progress?" Carpenter wrote. "And if we centralize the exchange, do we risk thwarting state ingenuity and local knowledge?"

The question became moot, however, when Democrats in the Senate lost their 60-seat majority with the election of Republican Scott Brown of Massachusetts in January. That led the House of Representatives to approve the Senate plan with its state-based exchanges.

Because the law includes the state-based exchanges, not one national exchange, we rate this promise a Compromise.

Our Sources

Thomas, HR 3590, Sec. 1321, (health care legislation), March 23, 2010

New America Foundation, Health Reform: National or State Exchanges?, Jan. 14, 2010

The Wonk Room, The Differences Between The House And Senate Exchanges, Jan. 11, 2010

The New Republic, Sexy? No. Important? Yes., Jan. 11, 2010

National Public Radio, House, Senate View Health Exchanges Differently, Jan. 12, 2010

Biographical directory of the U.S. Congress, Scott P. Brown

The New Republic, Jost: Pass the bill now, Jan. 20, 2010

Angie Drobnic Holan
By Angie Drobnic Holan July 16, 2009

Health reform bill creates a health insurance exchange

After months of talking about health care reform, the U.S. House of Representatives introduced major legislation to overhaul the nation's health care system. House Democrats unveiled the 1,000-plus-page bill, called America's Affordable Health Choices Act of 2009, on July 14, and it includes most of President Barack Obama's key proposals on health reform.

One of Obama's promises was to create a national health insurance exchange. He envisioned people being able to one-stop shop for health insurance, with benefits and coverage spelled out in clear, standardized language.

The House bill creates the National Insurance Exchange under a Health Choices Administration, with a commissioner to run it named by the president. The Health Choices commissioner "establishes a process through which to obtain bids, negotiate and enter into contracts with qualified plans, and ensure that the different levels of benefits are offered with appropriate oversight and enforcement," according to a summary of the legislation from the House Ways and Means Committee.

We should be clear that there's a long way to go — maybe months — before the bill creating the exchange becomes law. It has to pass the House and get through the Senate, where many changes could be made.

Nevertheless, the bill marks significant, measurable progress on Obama's promise, and we rate it In the Works.

Our Sources

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