A quick Explanation of Healthcare Exchanges
State-based health insurance exchanges, or marketplaces, are a key component of the Affordable Care Act (ACA), and are the places where individuals and small businesses will be able to shop for coverage. States can build a fully state-based exchange, enter into a state-federal partnership exchange, or default to a federally-facilitated exchange.
All exchanges, regardless of how they are administered, must be ready to begin enrolling consumers into coverage on October 1, 2013, and must be fully operational on January 1, 2014. Given these fast approaching deadlines, states face serious challenges to making the necessary policy and implementation decisions. Seventeen states plus the District of Columbia have declared that they intend to establish a state-based exchange and have received conditional approval from HHS.
Only Mississippi’s application for a state-based exchange was rejected by HHS due to a dispute between the Governor and the Insurance Commissioner.
States not ready to run their own exchanges in 2014 may transition from a partnership exchange to a fully state-based exchange at a later date. For a state unable or unwilling to establish a state-based or a state-federal partnership exchange, HHS will assume primary responsibility for operating an exchange in that state.
The federal government will seek to coordinate with state agencies on multiple fronts including plan certification and oversight functions, consumer assistance and outreach, and on streamlining eligibility determinations for the exchange and Medicaid. States’ involvement with the federal exchange, while not mandatory, will be important for ensuring effective and seamless operation. Over time, this involvement may allow states in a federal exchange to transition into a partnership or state-based model. Currently, 26 states have indicated they will not create a state-based exchange and will likely default to a federally-facilitated exchange. Indiana is among those 26.
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