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June 2013 St@teside

District of Columbia Passes Legislation to Close the Insurance Market Outside the Exchange

On June 5, 2013, the District of Columbia (DC) City Council voted to pass health exchange legislation that would close the existing private market for individuals and small employers. The District of Columbia is now the second state – following Vermont – to take such an approach directing all purchases of insurance for those populations to occur through the insurance exchange. For small businesses, the requirement to buy through the exchange will not take effect until January 1, 2015. The City Council took this step through a temporary measure that is effective until October, 2014. The Council expects to consider permanent legislation next spring.
Advocates of closing the market outside the exchange made the case that the small size of the DC insurance market would prevent having a viable market both inside and outside the exchange. In the long-term, having everyone in the exchange will enable the exchange to be a stronger force in the market and, hopefully, will have a more effective impact on lowering costs and improving quality. Opponents to the plan raised concerns about the exchange being an unproven entity; they counseled delaying the requirement to purchase through the exchange.