Federal Health Insurance Reform and “Exchanges”: Recent History

The major national innovation of the Affordable Care Act (ACA) is the insurance exchange or health insurance marketplace (HIM). We begin by briefly reviewing the ACA’s chief features and detailing its HIM provisions. Section two explores the policy history of exchanges, beginning with Clinton’s proposals and Massachusetts’ Connector and concluding by contrasting the House-passed bill with one national exchange and the Senate bill with state-based exchanges. The Senate bill became the ACA. The evolution of policy ideas about exchanges suggests three critical conditions for a successful exchange: commodification (of insurance products), competition (between insurers), and communication (to potential buyers and the public about insurance). The penultimate section compares the rollout of the state-run Kentucky exchange and the federally facilitated exchange in North Carolina in light of what we will call the 3 Cs. The conclusion reflects more widely upon the unique form that the pro-competition or deregulatory strategy has taken in health policy.