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Health insurance exchange is a set of standardized and state regulated health provision care plans in the entire United State of America. It allows individuals to purchase health insurance covers which are suitable for them. In addition, it assists people to receive subsidies from the federal government. There have been different arguments by various groups in Pennsylvania regarding who should regulate the health insurance exchange in the state. Some argue that the federal government should be mandated to regulate the exchange program. On the other hand, others hold a contrary opinion as they are in support of state government regulating the health insurance exchange (Northrup, 2011). The stakeholders, who are more involved in the debate on who should regulate the health insurance exchange, include consumer groups, small businesses, insurers and hospitals. The stakeholders, who are directly affected by the exchange programs, take stands that are more appealing to them as well as the ones that meet their insurance needs.



Insurers, who are expected to provide health insurance covers by an affordable health act, are the major players who are directly affected by health insurance exchange. Most of the insurers support the idea that the federal government should regulate the health insurance exchange rather than a possibility of state governments regulating the insurance exchange. Insurers who support the federal government regulation of the exchange program argue that the regulation conducted by the federal government will ensure high levels of transparency as opposed to the state government, which has failed to provide fair regulation in previous cases. Pennsylvania insurers argue that annual reviews performed by the state government may, in the long run, result to a deregulatory wave; such incidents have been already experienced in previous years. The insurers fear that, if the state government is allowed to regulate the health insurance exchange, the regulation may come in a form of introducing price control in the insurance industry, thus violating the principle of market liberalization (Rovner, 2003). In addition, they also fault the usage of state government as a regulator of the health insurance exchange in Pennsylvania as they reckon that the process is very slow and burdensome.

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Consumer Groups

Consumer groups play a major role in lobbying the rights of the consumers. Their views are very important when it comes to the question concerning who should regulate the health insurance exchange. Considering the role the state government plays in regulating the health insurance exchange, many consumer groups are in support of the state government regulating the insurance exchange. The law that formulated the health insurance exchange program mandated the state government to review any proposed premium increases by the insurer to avoid overpricing of the premiums. Consumer groups in Pennsylvania support the state government structure to regulate the health insurance exchange as it will reduce the cases of insurance companies increasing premiums’ prices unjustifiably, thus taking advantage of the health insurance plans’ consumers. If the state government controls the activities of the insurance companies, especially on the issue of regulating unjustifiable premium increases, consumer groups argue that the problem of insurance companies taking advantage of the consumers will be eliminated.

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Hospitals in Pennsylvania are in support of the federal government regulating the health insurance exchange. Given that the hospitals in this state aim at reducing their operational costs, they would rather support the federal government regulation because there is assurance that Medicare and Medicaid funds will be provided on time, thereby reducing the operational costs. In the past, hospitals have experienced cases whereby insurers did not release the funds on time, thus forcing the hospitals to operate on debts. Such activities hinder their service delivery process. With a federal managed health insurance exchange, the problem will be eliminated as most of the patients’ expenditure will be covered by Medicare (Levy, 2000). Therefore, it can be concluded that hospitals, which are the major players in the insurance exchange, largely depend on the payouts from insurance companies after treating patients. Therefore, they support the regulatory body that will help them minimize the cost of their operations in the long run.

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Small Businesses

Small businesses appear to be the major stakeholders in the health insurance exchange as well. Most of the small businesses in Pennsylvania are in support of federal government controlling the exchange. According to the new affordable health care act, small businesses will benefit from the federal government subsidies; as a result, they will be in a position to raise the cost of taking health insurance covers for their employees. Small business owners are in support of the federal government regulating the exchange because the process of applying for the subsidies will be easier and faster in comparison with the same process taking place if the state government is in control. State government process of applying is cumbersome and time consuming; thus, small businesses prefer dealing directly with the provider of the subsidies (Brosnan, 2010).


A close analysis of the views provided by the various stakeholders proves that most of them support the federal government regulating the health insurance exchange rather than the state government. They think that it would be more convenient for the federal government to directly control the insurance exchange to allow them reap maximum benefits from the exchange (Rovner, 2003). If the state government is allowed to directly regulate the health insurance exchange, various stakeholders may not obtain maximum benefits from the exchange.

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