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Until the Patient Protection and Affordable Care Act commonly known as the Affordable Care Act (ACA) was signed into law in March 2010, United States was the only industrialized rich country in the world without a universal healthcare insurance coverage. While pioneering works by Burns (1956, 1966) focused on the Social Security Act of 1935 in addressing the health insurance needs of U.S. retired population through Medicare, and later Medicaid was created by the Social Security Amendments of 1965, U.S. health insurance has remained a private, for-profit venture. The passage of ACA was one of the most contentious legislations of modern times. Soon after it was signed into law, various groups of private citizens and a number of States challenged some provisions of the ACA; however, the Supreme Court of the United States upheld its key provisions. A segment of the Congress remains opposed to the ACA on ideological ground and continues to challenge it with a variety of legal maneuvers. Notwithstanding the political or ideological arguments for or against the ACA, the objective of this paper is to analyze the competitiveness of the health insurance marketplace which opened on October 1, 2013. In doing so, the paper will address the structure of the health insurance exchange and suggest ways and means to make it more competitive.

The Health Insurance Exchange: An Oligopolistic Market In Need Of Reform