Who Is Operating Your State’s Mandated Health Insurance Exchange?

Let’s step back and talk some basics this time.  We’ve all heard in one form or another that the Patient Protection and Affordable Care Act (ACA) is now law and that there is a deadline looming on the horizon that will affect all legal Americans. The deadline that is fast approaching is for the ACA’s required Health Insurance Exchanges (also referred to as Marketplaces) to come on line.  As of October 1, 2013, all states and the District of Columbia are required to have some form of the new Health Insurance Exchange open for patient enrollment for plan year beginning January 1, 2014.  An Exchange is an online health insurance marketplace where consumers will be able to buy individual insurance policies and apply for government subsidies to help pay for their premiums. The choice was left to the states to decide how they were going to participate within the mandated Exchange rules.  

By February 15, 2013, each state, and the District of Columbia, was required to make a decision on how their state would participate within the Exchange.  There were three options to choose from:   1. Operate their own state-run health insurance exchange, 2. Partner with the federally- operated health insurance exchange with a division of duties, and 3. Default to the federally-operated health insurance exchange.

The federal exchange may make some minor adjustments (window-dressing) for each state participating within the federally-operated Exchange but it’s expected to basically function as a national program.  For those states opting to develop their own Health Insurance Exchange, they will have flexibility in determining how they will contract with health insurance carriers.  All Exchanges are required to contract only with health plans that meet minimum federal requirements for qualified health plans.  States can choose to have their Exchange contract with all qualified health plans within their state (known as a clearinghouse), or they can choose to have the Exchange contract with selected health plans and/or negotiate premium prices with health plans within their state (known as a active purchaser).

As of the decision deadline, 18 states, including the District of Columbia, had declared that they would operate their own state-run exchange.  Seven states are participating in the State-Federal Partnership Exchange, and 26 states defaulted to the federally-operated Exchange.  So how is it going to be run in your state?

State-based Exchange

California     Colorado     Connecticut     District of Columbia     Hawaii

 Idaho           Kentucky     Maryland         Massachusetts            Minnesota

 Nevada       New Mexico     New York    Oregon     Rhode Island

Utah            Vermont        Washington


States- Federal Partnership Exchange

Arkansas      Delaware     Illinois     Iowa      

Michigan      New Hampshire    West Virginia

States Defaulting to Federal Exchange

Alabama      Alaska        Arizona        Florida            Georgia    

Indiana       Kansas        Louisiana        Maine          Mississippi 

Missouri     Montana     Nebraska     New Jersey     North Carolina

North Dakota     Ohio     Oklahoma    Pennsylvania     South Carolina

South Dakota     Tennessee      Texas      Virginia       Wisconsin     Wyoming 

Whether or not the bugs and issues get worked out within the system, consumers will be able to start signing up October 1, 2013 for coverage that takes effect January 1, 2014.  This is also when two other major provisions of the law are set to kick in:  the mandate that almost all American carry health insurance, and the rule that says insurers can no longer turn away anyone with a pre-existing condition.  We talked about this previously in the blog “Highlights of the Patient Protection and Affordable Care Act” posted February 15.

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