Health Insurance Exchanges


The heart of Obamacare is the array of online shopping centers it created, dubbed Health Benefit Exchanges by the 2010 Affordable Care Act, where people who don’t get their insurance through their employer can go to buy coverage. The idea was to create an Expedia for medical coverage instead of airplane tickets, bringing insurance companies together to compete to offer affordable plans. The big question for the exchanges before they opened was whether they would attract enough healthy young people to offset the cost of older or sicker enrollees. Their launch, however, is remembered mostly for the massive computer problems that undermined early enrollment. The second round, for 2015 coverage, went far more smoothly. Officials pointed to enrollment levels that exceeded projections and rates that on average rose only modestly for some and fell for others. The exchanges still face some consumer skepticism and unrelenting partisan opposition, but survived a Supreme Court challenge that threatened to make insurance unaffordable for millions of Americans.

The Situation

The U.S. has set a low bar for the enrollment season that opened Nov. 1, aiming to get about 10 million people paying for coverage by the end of 2016. That’s less than a million more than the 9.1 million people the Obama administration expects will be paying for Obamacare policies at the end of 2015. At the enrollment peak in March 2015, about 10.2 million people were covered under individual private health plans. Premiums on the exchanges are going up more for 2016 coverage than they did in 2015, when a survey found premiums for policies sold through exchanges falling for silver-tier plans and rising slightly for bronze.  One worrisome sign came when UnitedHealth, the country’s biggest insurer, said it might pull out of the exchanges in 2017, saying it was losing money on the policies it had sold. Earlier in the year, the exchanges survived a legal challenge, when the Supreme Court by a vote of 6-3 upheld the provisions of the ACA that allowed subsidies to be given to people who bought insurance through the exchange established by the federal government,, as well as state-created exchanges.

Source: Kaiser Family Foundation
Source: Kaiser Family Foundation

The Background

The exchanges were just one part of the law’s approach to bring coverage to as many as 50 million Americans who lacked it, but they are its main tool for reaching those not covered by their employer or a government program. The idea behind the exchanges was simple: bringing together the millions of people relying on individual policies would lead to larger risk pools, more competition and lower premiums. That depends on enrolling enough healthy people to offset the cost of sicker customers — otherwise costs could rise, especially for young adults. Congress expected each state to create and manage its own exchange, but only 14 (plus Washington, D.C.) initially agreed to do so. The rest, reflecting hostility to Obamacare or concerns about the technical hurdles, opted to let Washington do all or part of the job, a point that became more important when the challenge to the subsidies headed toward the Supreme Court. Hawaii set up its own exchange but abandoned it in favor of the federal site.

The Argument

Despite the gains in coverage, polls showed that the health-care reform law continued to be unpopular — although a large majority continued to oppose repealing it. The strong Republican midterm victories in 2014 revived momentum for another attempt to repeal the law or, more realistically, chip away at some of its less popular provisions. But with President Barack Obama threatening to veto any significant change, conservatives had pinned much of their hopes on the Supreme Court case.

The Reference Shelf

  • A Bloomberg Visual Data chart tracks state-by-state enrollment in Obamacare.
  • Read the Affordable Care Act here. The section on exchanges begins on page 55.
  • The U.S. government has a calendar of key dates  while the Kaiser Family Foundation is tracking state progress.
  • 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.”
  • PriceWaterhouseCoopers reports on how the insurance industry is affected by the exchanges.
  • Bloomberg Visual Data has a chart with a state-by-state rundown of premiums.
  • Bloomberg News “Prognosis for Obamacare” coverage index.


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First Published Oct 1, 2013

To contact the writer of this QuickTake:

Alex Nussbaum in New York at

To contact the editor responsible for this QuickTake:

Jonathan I. Landman at