This is a common MISUNDERSTANDING, unfortunately. The insurance in the exchanges is still "run" by HEALTH INSURANCE COMPANIES. Where government enters is: (1)

This is a common MISUNDERSTANDING, unfortunately. The insurance in the exchanges is still "run" by HEALTH INSURANCE COMPANIES. Where government enters is: (1) To allow people to compare apples to apples by having, in the exchange, groups of plans that offer the same coverage. In the current individual insurance marketplace, it is basically impossible to compare policies because they all differ on many different details, and finding out those details is a laborious, unrewarding, and confusing slog. (2) To make sure that the plans in the exchanges would be considered insurance to a rational person. Right now, the individual market has a lot of low premium plans (i.e., plans for which you don't have to pay very much per month) which are next to useless when you actually NEED the insurance, because they don't cover very much at all. The idea is to maintain minimum standards of coverage so if you ever are in a situation when you really NEED insurance, you actually will HAVE insurance.