health insurance exchanges and state decisions

7/27/2019 Health Insurance Exchanges and State Decisions

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Health Policy Brief ,

Project HOPEThe People-to-PeopleHealth Foundation Inc../hp b .

Health Insurance Exchanges and StateDecisions. Exchanges must be ready to beginenrolling people by October 2013. How is eachstate preparing?

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The Affordable Care Act (ACA) establishedhealth insurance exchangesalso known asmarketplacesin each state as a corner-stone of its health coverage expansion andinsurance-market reforms. Exchanges willserve as portals through which individualsand small businesses can compare and pur-chase private health plans that have been

certified as meeting federal and state stan-dards. Exchanges will also allow individualswith low-to-moderate incomes to access pub-lic coverage programs, such as Medicaid andthe Childrens Health Insurance Program, orfinancial assistance to purchase private cover-age. Certain small businesses also will be ableto access tax credits for employee coveragethrough exchanges. According to the Congres-sional Budget Office, an estimated 9 millionpeople will enroll in coverage through indi-vidual and small-business exchanges in 2014,increasing to 29 million by 2022.

Under the Affordable Care Act, states mayestablish and run the exchange in their state,or they may defer responsibility to the federalgovernment. Since the law was enacted, theDepartment of Health and Human Services(HHS) has created multiple variations of thesetwo options that provide greater flexibility tostates to take on responsibility for some, butnot all, functions.

By January 1, 2014, all states must have anoperational individual and small-businessexchange, regardless of whether it is run bythe state or the federal government. In practice, exchanges are supposed to be ready byOctober 1, 2013, the start of the initial open-enrollment period. Although all exchangewill be built off a common framework set bythe Affordable Care Act, the design and operation of exchanges is expected to vary substan-

tially among states because of the flexibilitystates have been given.

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The attempt to implement exchanges nationwidealong with the Affordable Care Actsbroader private insurance-market reformsMedicaid expansion, and their integrationis unprecedented in our nations health caresystem, raising many previously unsolvedoperational and regulatory questions. Policyexperts have noted that previous state or loca

efforts to establish health insurance exchanges have been stymied by problems such as lowenrollment and adverse selection (which is thedisproportionate enrollment of sicker, highercost individuals, leading to ever-increasingpremiums and further discouraging enrollment by lower-cost individuals). To be successful, the Affordable Care Act exchangesmust avoid these problems and overcome newchallenges, such as the development of firstgeneration information technology systemsthat can carry out the laws specifications.
http://www.commonwealthfund.org/Publications/Fund-Reports/2010/Jul/Health-Insurance-Exchanges-and-the-Affordable-Care-Act.aspxhttp://www.commonwealthfund.org/Publications/Fund-Reports/2010/Jul/Health-Insurance-Exchanges-and-the-Affordable-Care-Act.aspx


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2 ? : - - -: The Affordable Care Act envisionedthat states would either establish a state-based exchange or default to a federally runexchange. In either case, the state or the fed-eral government would take responsibilityfor implementing core exchange functions:eligibility and enrollment; plan management;consumer assistance, outreach, and educa-tion; and financial management. (For moreinformation on core exchange functions, seeprevious Health Policy Briefs on federally fa-cilitated exchanges, published on January 31,2013, and on the Small Business Health Op-tions Program [SHOP] exchanges, publishedon February 9, 2012.)

To ensure that all states would have an op-

erational exchange by January 1, 2014, the lawrequired the secretary of HHS to determinewhether a state had taken sufficient action to

establish an exchange by January 1, 2013. Anystate that did not do so would default to a federally facilitated exchange. To encourage andassist states in setting up their own exchanges, the law included an open appropriation forexchange planning and establishment grantsto states (see Exhibit 1 for more key milestonesin exchange development).

Initially, 17 states and the District of Columbia gained conditional approval from HHS torun a state-based exchange in 2014, but one othese states, Utah, later obtained approval fora bifurcated approach in which the federagovernment will run the individual exchangewhile the state will run its small-business exchange. Thirty-three states opted for somevariant of a federally facilitated exchange, asdiscussed below.

The Affordable Care Act also gave states

the option to join with other states to createregional, or multistate, exchanges or to create more than one exchange serving differentparts of their state. As of this writing, no statehad elected this option. Although as noted ina recent National Academy for State HealthPolicystudy, some states have explored opportunities to share certain exchange functionssuch as marketing, information technologyor data collection, in the future.

: : Since the

ACAs enactment, regulations and guidancehave moved away from the basic state-federadivide presented in the law and unfurled a continuum of options for dividing responsibilityfor core exchange functions (see Exhibit 2for an overview of exchange models). For instance, in a state-based exchange, a state isresponsible for all core exchange functionsyet it may use federal services to assist withcertain activities, such as determining eligibility for federal financial assistance. On theother hand, in operating federally facilitatedexchanges, HHS has stated that it will rely oncertain reviews traditionally conducted bystatessuch as reviews of premium rates andnetwork adequacywhen determining whether to certify health plans for participation.

In addition, the federal government hascreated distinct variations of state-based andfederally facilitated exchanges that offer stateseven greater flexibility to pick and choosewhich functions they want to take on. In largepart, these variations reflect attempts to respond to states practical and political needs Authors analysis.

Key Milestones In Health Insurance Exchange Development

Date Milestone

March , Affordable Care Act enacted

September , Opportunity to apply for exchange planning grantsannounced

January, Opportunity to apply for exchange establishment grants

announcedMarch , Final rule on exchange establishment published

May , General guidance on federally facilitated exchangesreleased

November , Initial application and Blueprint submission deadline forstate-based and state partnership exchanges

December , Revised application and Blueprint submission deadline forstate-based exchanges

January, Approvaldeadline for state-based exchanges

January, Guidance on state partnership exchanges released

February, Revisedapplication and Blueprint submission deadline forstate partnership exchanges

February , Marketplace plan management option announced

March , Approval deadline for state partnership exchanges

May , Bifurcated exchange model announced

June , Proposed rule codifying bifurcated exchange modelpublished

October , Initial exchange open-enrollment period begins

January, Exchange coverage effective

October , Last opportunity for states to apply for exchangeestablishment grants
http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=84http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=84http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=62http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=62http://www.nashp.org/sites/default/files/WVreport.pdfhttp://www.nashp.org/sites/default/files/WVreport.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/exchange_planning_grant_foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/exchange_planning_grant_foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/foa_exchange_establishment.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/foa_exchange_establishment.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ffe-guidance-05-16-2012.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ffe-guidance-05-16-2012.pdfhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/hie-blueprint-11162012.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/Downloads/exchange-blueprint-letter.pdfhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/hie-blueprint-11162012.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/index.htmlhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/index.htmlhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/partnership-guidance-01-03-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/Downloads/exchange-blueprint-letter.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/Downloads/exchange-blueprint-letter.pdfhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/plan-management-faq-2-20-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/index.htmlhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/shop-marketplace-5-10-2013.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2013-06-19/pdf/2013-14540.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2013-06-19/pdf/2013-14540.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/amended-spring-2012-establishment-foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/amended-spring-2012-establishment-foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/amended-spring-2012-establishment-foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/amended-spring-2012-establishment-foa.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2013-06-19/pdf/2013-14540.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2013-06-19/pdf/2013-14540.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/shop-marketplace-5-10-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/index.htmlhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/plan-management-faq-2-20-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/Downloads/exchange-blueprint-letter.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/partnership-guidance-01-03-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/index.htmlhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/hie-blueprint-11162012.pdfhttp://www.cms.gov/CCIIO/Resources/Technical-Implementation-Letters/Downloads/exchange-blueprint-letter.pdfhttp://www.cms.gov/CCIIO/Resources/Files/Downloads/hie-blueprint-11162012.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ffe-guidance-05-16-2012.pdfhttp://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ffe-guidance-05-16-2012.pdfhttp://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/foa_exchange_establishment.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/foa_exchange_establishment.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/exchange_planning_grant_foa.pdfhttp://www.cms.gov/CCIIO/Resources/Funding-Opportunities/Downloads/exchange_planning_grant_foa.pdfhttp://www.nashp.org/sites/default/files/WVreport.pdfhttp://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=62http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=62http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=84http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=84


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3 and to minimize federal duplication of stateactivities.

State partnership exchange. In proposedregulations issued in July 2011, HHS an-nounced a variant of the federally facilitatedexchange known as the state partnership ex-change. As later guidance detailed, in a state

partnership exchange, the state can elect toconduct certain plan management functions,consumer assistance functions, or both. Planmanagement functions include recommend-ing health plans for certification to the fed-erally facilitated exchange and conductinghealth plan oversight and monitoring. Con-sumer assistance functions include conduct-ing outreach and education and running anin-person assistance program, while the fed-eral government runs a navigator program,call center, and exchange website.

States interested in pursuing a state part-nership exchange were asked to submit a dec-

laration letter and Blueprint application byFebruary 15, 2013two months after applications were due for state-based exchanges. Inproviding states with the option to enter intoa state partnership exchange, HHS was clearin its intent that states could use this model asa stepping stone to a state-based exchangein the future. For 2014, 7 of the 33 states with

federally facilitated exchanges opted to pursue a state partnership exchange to conductplan management or consumer assistancefunctions, or both.

Marketplace plan management ex

change. Following the deadlines for states tosubmit applications to operate a state-basedor state partnership exchange, HHS releasedguidance allowing states to pursue a secondvariant of the federally facilitated exchangereferred to as the marketplace plan management. Under this option, states can conduct

the same plan management functions as astate partnership exchange, while the federal government operates remaining core exchange functions.

HHS required states wishing to pursue thisoption to submit a letter indicating their interest in doing so and attesting to their capabilityto perform the same plan management functions as are required for the state partnershipexchange, but HHS did not require states tosubmit a Blueprint application. Althoughno deadline was given, the Government Ac

countability Office (GAO) reported that Apri1, 2013, was a natural deadline for states tochoose the marketplace plan managemenoption because insurers interested in participating in exchanges had to submit certainhealth plan data to either the state or the federal government by that date. For 2014 sevenstates chose to pursue the marketplace planmanagement variant of the federal exchange

Bifurcated exchange. In response to a request from Utah, HHS published a regulationon June 19, 2013, allowing states to pursue abifurcated approach in which the state runsthe small-business exchange, while the federal government runs the individual exchangenoting that there could be several types ofexchanges operating in a state.

In recognition of the limited amount oftime before open enrollment begins, onlystates that have been conditionally approvedto operate state-based exchanges can pursuethis option for 2014. Any state can submit anapplication to operate a small businessonlyexchange for 2015 or later. Utahthe only Authors analysis.

Overview of Exchange Models, June 2013

Excha ng e mo del Excha ng e activityNumber ofstates States

State-basedexchange

State operates all core exchangefunctions; may use federal servicesfor certain exchange functions

states andWashington,DC

CA, CO, CT,DC, HI, KY,MD, MA, MN,NV, NY, OR,RI, VT, WA

Supportedstate-based

exchange

State operates most core exchangefunctions; uses federal information

technology infrastructure

states ID, NM

Federallyfacilitatedexchange

Federal government operates allcore exchange functions

states AL, AK, AZ,FL, GA, IN, LA,MS, MO, NJ,NC, ND, OK,PA, SC, TN,TX, WI, WY

Variant : statepartnershipexchange

State conducts plan managementand/or consumer assistance,outreach, and education functionson behalf of federal government;federal government operatesremaining core exchange functions

states AR, DE, IL, IA,MI, NH, WV

Variant :marketplaceplanmanagement

State conducts plan managementon behalf of federal government;federal government operatesremaining core exchange functions

states KS, ME, MT,NE, OH, SD, VA

Bifurcatedexchange

State operates all core exchangefunctions for small-businessexchanges and conducts planmanagement on behalf of federalgovernment for individualexchange; federal governmentoperates remaining core exchangefunctions for individual exchange

state UT


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4 state pursuing this option to datewill alsoconduct plan management for the individualexchange.

Supported state-based exchange. As ofthis writing, two state-based exchangesIdaho and New Mexicohave announced that

they will initially use the federal informationtechnology infrastructure to support their in-dividual or small-business exchanges, or both,while they develop their own technology plat-forms. GAO has also reported that the federalgovernment would provide extra assistance tostate-based and state partnership exchangesas needed to carry out required activities, butthat such states would retain their status asstate-based or state partnership exchanges.Although no formal guidance outlining thisoption has been issued, the two states haveused the term supported state-based exchangeto describe this option.

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-: The respective roles of the statesand federal government in establishing ex-changes were a central point of debate duringthe drafting of the Affordable Care Act. TheHouse health reform bill called for a singlefederal exchange with a provision allowingstates to opt out and run their own exchange,while the Senate billwhich ultimately be-came lawcreated an opt-in model, defer-

ring states to choose whether to establish anexchange.

As a result, following enactment of the Af-fordable Care Act, the exchange establishmentdebate shifted to the states. Despite holdingdifferent viewpoints on the merits of the Af-fordable Care Act itself, every state took oneor more steps to analyze options for exchangeestablishment, including applying for federalexchange planning funding; convening work-ing groups to evaluate options; soliciting pub-lic input through surveys, forums, or other

mechanisms; or relying on private or publicconsultants to help them decide on a course ofaction. The inherently political environmentin which states made their decisions, alongwith compressed time frames for implementa-tion, led some states to change course duringthe process. Some states initially planned for astate-based exchange but ultimately defaultedto a federally facilitated exchange, or opted forone of its variants.

? States considered a range of practicaissues when deciding on their level of involvement in creating and running exchanges, including the anticipated level of flexibility theywould be given in designing their exchangestheir ability to maintain control over theirinsurance markets and tailor consumer out

reach and assistance to their populations; theability of the exchange to coordinate with other state agencies and the federal governmentand funding and resource constraints.

Regulatory f lexibility and guidance. Although proponents of state-based exchangesfelt that this option afforded them the greateslevel of flexibility to design an exchange tailored to the needs of their consumers, criticsargued that the Affordable Care Act includedso many constraints that states would not truly have control over their exchanges. In addi-

tion, states had to contend with the fact thatregulatory guidance was not always availablein time to answer critical design questionsSome states felt frustrated that they couldnot move forward without timely answersalthough others felt that this dynamic gavethem additional flexibility to design their ownsolutions.

Control over insurance markets. Depending on the model they have chosenstates, which have traditionally regulatedinsurance, will have varying levels of contro

over the health plans offered through the exchange in their state. State-based exchangehave full control over plan management within the exchange, including final responsibilityfor certifying plans in the exchange.

The federal government will remain responsible for certifying health plans for federallyfacilitated exchanges, although states conducting plan management activities throughthe state partnership and marketplace planmanagement models will recommend healthplans for certification. States with a greaterdegree of involvement in plan management fortheir exchange may find it easier to conductconsistent oversight of health plans offeredinside and outside the exchanges, which canhelp prevent adverse selection and ensure thaconsumer protections are evenly applied.

Consumer outreach and enrollment

States operating their own exchanges havefull responsibility for running the consumerassistance functions of their exchanges, including establishing a web portal, call centerand navigator program to help people find and

millionExchange enrolleesAccording to the CongressionalBudget Office, an estimated29 million people will enroll incoverage through individual andsmall-business exchanges by2022.


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5 enroll in public or private coverage. In feder-ally facilitated exchanges, the federal govern-ment will be responsible for conducting thesefunctions. However, states with state-basedexchanges and state partnership exchangesalso may choose to use federal funds to estab-lish in-person assistance programs to supple-ment their navigator programs, which cannot

be fully funded by exchange establishmentgrantsthus helping to ensure that there willbe enough assisters to help people enroll incoverage.

Consumer assistance will be more limitedin states with federally facilitated exchanges,as these states must rely on a limited federalfunding stream for grants to navigators andwill not have in-person assistance programsto supplement the work. Many states felt thatoperating a state-based exchange providedthe best opportunity to tailor consumer as-

sistance functions to their populations, withstate partnership exchanges offering the next-

highest degree of control over these programs.

Coordination. The Affordable Care Actrequires an unprecedented degree of coordi-nation and integration between state depart-ments of insurance, exchanges, state Medicaidagencies, and the federal government. Forexample, significant coordination, includingthe integration of Medicaid and exchange in-formation technology systems, will be neces-sary to ensure that consumers can seamlessly

enroll in either public or private coveragethrough the exchange. At the same time,consistent oversight of health plans offeringcoverage inside and outside the exchange willrequire collaboration between exchanges andstate departments of insurance.

States operating their own exchanges mayfind such collaboration easier to manage with-in the state, although states with federally fa-cilitated exchanges may experience greaterdifficulty establishing the necessary integra-tion between state departments of insurance

and Medicaid agencies and the federally fa-cilitated exchange, as illustrated in a recentUrban Institute case studyof state roles in fed-erally facilitated exchanges. Ultimately, poorcoordination between these entities could leadto consumers falling through the cracks andnot being enrolled into coverage or to incon-sistent regulation of insurers inside and out-side the exchange, potentially increasing therisk of adverse selection.

Funding and resources. According to theKaiser Family Foundation and GAO, statesto date have been awarded over $3.6 billionin federal funds to plan for and establish ex-changes. Although the Affordable Care Actincluded an open-ended funding stream forexchange establishment grants to the statesuntil December 31, 2014, this funding proved

to be a necessary but not sufficient incentivefor states to establish state-based or state partnership exchanges.

Some officials raised concerns that exchange operation might become a financiaburden on states once federal funding is nolonger available, and some states have runinto barriers drawing down federal exchangeestablishment funds because of political opposition. Although according to GAO, 13states that defaulted to a federally facilitatedexchange ultimately turned down or returned

all or part of their grant awards.

States that are not running their own ex-change in 2014 may still use federal funds forcertain exchange activities or to prepare totake on more exchange responsibilities in thefuture. Meanwhile, the Affordable Care Actprovided only limited funding to the federagovernment for implementation of the federally facilitated exchange and the laws otherprovisions.

GAO estimates that approximately $2 bil

lion is needed to establish and operate thefederally facilitated exchanges in 2014, withonly an estimated $450 million providedthrough exchange user fees. However, whether or not Congress will appropriate addition-al implementation funds to HHS and otherimplementing agencies remains a questionLimited federal implementation funding hasled to concerns that resources for certain critical activities, such as the navigator programremain inadequate.

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Consumers can get coverage effective assoon as January 1, 2014, with the first openenrollment period slated to run from October1, 2013, to March 31, 2014. A recent Commonwealth Fund studydemonstrates that stateshave made substantial progress in designing their exchanges to date; however, certainpolicy and operational decisions remain to bemade.

Although GAO and others have questionedexchanges ability to be fully operational in

By January 1,2014, all statesmust have anoperationalindividual andsmall-businessexchange.

billionGAO estimates approximately $2

billion is needed to establish andoperate the federally facilitatedexchanges in 2014.
http://www.rwjf.org/en/research-publications/find-rwjf-research/2013/06/state-level-progress-in-implementation-of-federally-facilitated-.html?cid=XEM_FFE6-14-13A&cid=http://www.gao.gov/products/GAO-13-543http://www.commonwealthfund.org/Publications/Fund-Reports/2013/Jul/Design-Decisions-for-Exchanges.aspxhttp://www.commonwealthfund.org/Publications/Fund-Reports/2013/Jul/Design-Decisions-for-Exchanges.aspxhttp://www.gao.gov/products/GAO-13-543http://www.rwjf.org/en/research-publications/find-rwjf-research/2013/06/state-level-progress-in-implementation-of-federally-facilitated-.html?cid=XEM_FFE6-14-13A&cid=


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Arons A, Miller C, Moone y K, Gaut hier A, StateSharing of Insura nce Exchanges: Options, Priori-ties, and Next Steps from the West Virginia RegionalExchange Study. National Academy for State HealthPolicy, June 2013.

Blumberg L, Rifkin S, State-Level Progress in Imple-mentation of Federally Facilitated Exchanges: Find-ings from Alabama, Michigan, and Virginia, UrbanInstitute, June 14, 2013.

Congressional Budget Office, Effects on Health In-surance and the Federal Budget for the InsuranceCoverage Provisions in the Affordable Care ActMay2013 Baseline, Congressional Budget Office, May 14,2013.

Dash S, Lucia C, Keith K, Monahan C, Implement-ing the Affordable Care Act: Key Design Decisionsfor State-Based Exchanges, Commonwealth Fund,July 2013.

Dash S, Monahan C, Lucia K, Implementing theAffordable Care Act : St ate Decisions about Healt hInsurance E xchange Establishment, GeorgetownUniversity Health Policy Institute, April 2013.

Government Accountability Office, HHSs Processfor Awarding and Overseeing Exchange and RateReview Grants to States, GAO 13-543, May 31, 2013.

Government Accountability Office, Seven StatesAct ions to Establish Exchanges under the Pat ienProtection and Affordable Care Act, GAO-13-486

April 30, 2013.

Government Accountability Office, Status of CMSEfforts to Establish Federally Facilitated Health Insurance E xchanges, GAO-13-601, June 19, 2013.

Government Accountability Office, Status of Federal and State Efforts to Establish Health InsuranceExchanges for Small Businesses, GAO-13-614, June19, 2013.

Jost T,Health Insurance Exchanges and the Affordable Care Act: Key Policy Issues, CommonwealthFund, July 2010.

Kaiser Family Foundation, Health Insurance Exchange Establishment Grants,cited July 3, 2013.

Kingsdale J, Aurori J (Wakely Consulti ng Group)Impact of National Health Reform and State-BasedExchanges on the Level of Competition in the Nongroup Market, State Health Reform Assistance Network, June 17, 2013.

About Health Policy Briefs

Wrien bySarah Dash, Christine Monahan, andKevin W. LuciaCenter on Health Insurance ReformsGeorgetown University Health PolicyInstitute

Editorial review byTim JostWashington and Lee University Schoolof Law

Jennifer TolbertDirectorState Health ReformKaiser Family Foundation

Sarah LueckSenior Policy AnalystCenter on Budget and Policy Priorities

Rob LottDeputy EditorHealth Affairs

Health Policy Briefs are produced undera partnership of Health Affairs and theRobert Wood Johnson Foundation. TheCommonwealth Fund supported theinitial research on which this brief isbased.

Cite as:Health Polic y Brief: Health Ins uranceExchanges and State Decisions,Health

Affa irs , July 18, 2013.

Sign up for free policy briefs at:www.healthaffairs.org/healthpolicybriefs

time for open enrollment, particularly giventhe compressed time frame in which exchang-es and supporting infrastructure are beingdeveloped, HHS maintains that exchangeswill be ready on time. Key milestones to becompleted in the months before open enroll-ment include testing state and federal infor-mation technology systems, certifying plans,

and training and certifying navigators andin-person assisters.

A number of factors will affect the initialand long-term success of exchanges, includingthe extent to which consumers are aware ofthe exchange, receive help determining theireligibility for and enrolling in appropriatehealth coverage, and find exchange coverageaffordable. Other key factors will be SHOP ex-changes ability to add value for small employ-ers, the extent of insurer participation, andthe success of state and federal efforts to limit

adverse selection.

The substantial flexibility afforded tostates throughout the implementationprocess, along with state-specific factors,such as rates of uninsurance and marketdynamics, is likely to lead to variabilityamong states in both exchange design andoutcomes, even among states with thesame model. It will be critical to watch

how differences in state decisions impactinsurance markets and, ultimately, con-sumers access to adequate, affordablehealth care.

This Health Policy Brief is based on the

authors previously published paper, sup-

ported by the Commonwealth Fund. Dash

S, Monahan C, Lucia K, Implementing theAffordable Care Act: State Decisions about

Health Insurance Exchange Establishment,Georgetown University Health Policy Insti-

tute, April 2013.
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