HR-1385-116
Placed on the Union Calendar, Calendar No. 27.
Sponsored by Andy Kim (D-NJ)
What it does
The SAVE Act would authorize the Department of Health and Human Services (HHS) to award grants to states that have not yet set up their own health insurance exchanges under the Affordable Care Act. States that accept a grant would be required to make their exchange financially self-sustaining — no longer dependent on federal funding — by 2024.
Who benefits
States that currently rely on the federally run HealthCare.gov marketplace would gain funding and flexibility to build and operate their own exchanges. Residents of those states could benefit from exchanges tailored to local insurance markets and state-specific needs. State governments would gain greater administrative control over how their exchange operates, including outreach, enrollment tools, and plan standards.
Who is hurt
Federal taxpayers would bear the cost of the grants during the transition period. States that accept grants but struggle to build financially self-sustaining exchanges by the 2024 deadline could face operational or financial shortfalls. Consumers in states that fail to meet the self-sufficiency deadline could face disruption to their exchange marketplace. Small insurers or plans that currently operate under uniform federal exchange rules could face a more fragmented, state-by-state regulatory environment.
Supporters argue
Supporters argue that state-based exchanges allow states to design marketplaces that reflect their own insurance landscapes, demographics, and consumer needs — producing better outcomes than a one-size-fits-all federal platform. They contend that states running their own exchanges have historically achieved higher enrollment rates and lower per-enrollee costs than the federal exchange. Giving states startup grants removes the financial barrier that has kept many states on the federal platform, and the 2024 self-sufficiency requirement ensures the program does not create permanent federal dependency. Supporters also argue this approach respects the federalism principles embedded in the original ACA framework, which envisioned state-run exchanges as the default.
Opponents argue
Opponents argue that the federal exchange (HealthCare.gov) already functions effectively and that directing grant dollars toward duplicative state infrastructure is an inefficient use of federal funds. They contend that smaller or lower-income states may lack the administrative capacity to build and sustain a viable exchange, meaning the 2024 self-sufficiency deadline could leave consumers in those states with an underfunded or unstable marketplace. Critics also raise concerns that fragmenting the exchange system into dozens of separate state platforms could increase complexity for consumers who move between states, reduce bargaining leverage with insurers, and create uneven consumer protections depending on where a person lives.
Constitutional context
The bill operates under Congress's Taxing and Spending Clause (Art. I, Sec. 8), using federal grants as an incentive for states to act — the same mechanism upheld in NFIB v. Sebelius (2012), provided conditions are not so coercive as to become a "gun to the head." Because participation is voluntary and grant-based, it avoids the spending coercion concern flagged in NFIB. King v. Burwell (2015) is relevant background, as it confirmed that the ACA's subsidy structure applies on federal exchanges, underscoring the policy stakes of which exchange platform a state uses. The bill does not implicate the Commerce Clause directly, as it does not mandate individual or state action.
Checks and balances
The bill would expand HHS's administrative authority by granting it discretion over which states receive funding and under what conditions. Congress retains control through the appropriations process, as grant funding would require congressional authorization. State legislatures and governors would gain decision-making power over exchange design and operation, shifting some authority from the federal executive branch to state governments.
Historical precedent
The original ACA (2010) included startup grants for state-based exchanges under Section 1311, which funded early exchange development before those grants expired. Several states used that funding to establish exchanges that remain operational today (e.g., California's Covered California, New York State of Health). The SAVE Act would revive a similar grant mechanism for states that did not act during that initial window.