Overview of Health Insurance Exchanges (CRS Report for Congress)
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| Release Date |
Revised March 17, 2023 |
| Report Number |
R44065 |
| Report Type |
Report |
| Authors |
Namrata K. Uberoi, Coordinator Analyst in Health Care Financing; Annie L. Mach, Analyst in Health Care Financing; Bernadette Fernandez, Specialist in Health Care Financing |
| Source Agency |
Congressional Research Service |
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Summary:
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) requires health
insurance exchanges to be established in every state. Exchanges are marketplaces in which
consumers and small businesses can shop for and purchase private health insurance coverage. In
general, states must have two types of exchanges: an individual exchange and a small business
health options program (SHOP) exchange.
Exchanges may be established either by the state itself as a state-based exchange (SBE) or by the
Secretary of Health and Human Services (HHS) as a federally facilitated exchange (FFE). Some
states have SBE-FPs: they have SBEs but use the federal information technology platform,
including the federal exchange website www.Healthcare.gov. In states with FFEs, the exchange
may be operated by the federal government alone or in conjunction with the state. States may
have different structures for their individual and SHOP exchanges.
Consumers who obtain coverage through the individual exchange may be eligible for financial
assistance from the federal government. Financial assistance in the individual exchanges is
available in two forms: premium tax credits and cost-sharing reductions. Small businesses that
use the SHOP exchange may be eligible for small business health insurance tax credits. The tax
credits assist small businesses with the cost of providing health insurance coverage to employees.
The ACA generally requires that health insurance plans offered through an exchange are qualified
health plans (QHPs). To be a certified as a QHP, a plan must be offered by a state-licensed issuer
and must meet specified requirements, including covering the essential health benefits (EHB).
QHPs sold in the individual and SHOP exchanges must comply with the same state and federal
requirements that apply to QHPs and other health plans offered outside of the exchanges in the
individual and small-group markets, respectively. Exchanges also may offer variations of QHPs,
such as child-only or catastrophic plans, and non-QHP dental-only plans.
This report provides an overview of the various components of the health insurance exchanges. It
begins with summary information about how exchanges are structured and then discusses both
individual and SHOP exchanges in terms of eligibility and enrollment, financial assistance for
certain exchange consumers and small businesses, and enrollment assistance entities. The report
also describes exchanges’ role in certifying plans as qualified to be sold in their marketplaces and
outlines the range of plans offered through exchanges. Finally, the report briefly addresses
funding for the exchanges. Where applicable, the report references other CRS reports that have
more information on various topics.
