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Monday, October 15, 2012

A State’s Exchange Choice

Under the Affordable Care Act, states have been given an unprecedented opportunity. Using federal grant dollars, every state has the option to build its own health insurance exchange-a transparent marketplace for coverage where individuals and small businesses can easily compare high-quality insurance plans, apply for financial assistance with the cost of coverage, and then easily enroll in health insurance. The many states that are building state-based exchanges will benefit from the flexibility to make key exchange decisions based on their residents' unique needs.

The deadline for states to submit their blueprints of how they will build a state-based exchange is November 16, just a month away. However, many states opted not to work on state exchange planning before the July Supreme Court decision on the Affordable Care Act, which ultimately upheld the law's constitutionality. Some states have even said they won't make a decision on which exchange model to pursue until after the November 6 election-just 10 days before the blueprint deadline! Unfortunately, these states are losing the opportunity to plan a thoughtful, carefully tailored state-based exchange. Other states that took full advantage of their planning time concluded through thoughtful analysis that running a state-based exchange may not make sense for them, at least for 2014 (the first year of exchange operations).

So, what are the options for states that aren't likely to build their own exchanges for 2014?

Those states have two options:

•A federally facilitated exchange (FFE): The US Department of Health and Human Services (HHS) will operate an exchange for consumers and small businesses on behalf of the state. HHS will create an exchange website for the state, certify insurance plans to sell coverage in the exchange, determine if residents are eligible for tax credits to make coverage more affordable, and perform all other critical exchange duties.

•A partnership exchange: A federally facilitated exchange will serve residents and small businesses, but the state will perform one or both of the following functions within the exchange:

ο Plan management: The state will certify insurance plans for sale in the exchange and monitor their compliance with exchange rules.

ο In-person consumer assistance: The state will ensure that there are entities to provide direct help to residents as they seek and enroll in coverage.

These functions are described in Families USA's new brief, State Responsibilities in a Partnership Exchange. States that seek to establish a partnership exchange must also submit a blueprint to the Department of Health and Human Services by November 16.

The choice that a state makes for 2014 doesn't have to be permanent. If states want to opt for a different exchange model in future years, they have that flexibility.

Do you know what path your state plans to take? If you want to find out, visit the Center on Budget and Policy Priorities' exchange tracker.

If your state is listed as "undecided," you may want to weigh in on what option would be best for consumers and small businesses in your state. Families USA's new brief, Exchange Implementation: To Partner or Not to Partner?, can help you think through that process. Your voice can help ensure that your state's exchange is the best that it can be!